- 2022 marks 50 years since formal relations
began between Australia and China.
But it's an anniversary neither side seem to be celebrating.
- We start with the significant
worsening of relations between China and Australia.
- Beijing is raging a politically-charged
trade war down under.
- One of China's government-sponsored scholars
describe Australian foreign policy as being
bizarre, immature, belligerent, juvenile, and mindless.
- Every time now there is a headline
with Australia and China relations,
we almost know immediately it's going to be bad news.
- A series of disputes between the two nations
has led China to introduce crippling trade bans
on some of Australia's biggest exports.
- Almost a dozen Australian commodities
are still subject to official, and in many cases,
unofficial sanctions by the Chinese government,
depriving Australian exporters
access to billions of dollars worth of a market.
- Because Australia is so closely
tied to China economically,
it means that China has a lot of trade
leverage over Australia,
that it can use,
if Australia does things that it doesn't approve of.
- You can use the word sanction
or you can use the word trade friction for that,
but both of those things refer to the same point,
a process of coercion,
to try and change Australia's political settings.
- This isn't any old diplomatic row,
it's about how the West handles the Chinese government,
that not only wants to be a major player
in this political game,
but wants to decide the rules as well.
- Australia is really the Canary in the coal mine.
Why happens in Australia in relation to China
over the next decade will be a blueprint
for how the rest of the world
will handle China in coming years.
- Much of China's economic miracle since the 1980s
has been driven by industrialization,
building roads, buildings, machinery, and factories,
all of which require steel.
And to make steel, you need two ingredients,
iron ore for the iron content,
and metallurgical coal to provide
the energy in the blast furnace.
Australia is the world's preeminent
export supplier of both of those commodities.
This was initially the basis
for the relationship starting in the 1980s,
but really gathered steam during the mid 2000s,
as China's heaviest stage of industrialization took off.
- Australia began to experience
what was known as the mining boom,
and the mining boom
was a time of enormous wealth in Australia.
So billions, and billions, and billions of dollars of income
flowed into the country,
and Australia became enormously rich and comfortable.
And that mining boom was thanks entirely to China.
- Mineral resources became
the foundation of the relationship.
But as China's wealth grew,
so did its demand for luxury goods.
Wine and rock lobster became popular
among China's burgeoning middle and upper classes,
which provided Australian exporters
even more opportunities, and cemented trade ties.
- Two-way trade grew from
86 million US dollars
in the early years of our diplomatic relations,
to 136.4 billion US dollars in 2013,
and China has been Australia's
biggest trading partner for five consecutive years.
- Australia also developed
a number of other export industries,
which China was in need of as its development level rose.
Up probably the most famous is international education,
where tens, and in some cases,
hundreds of thousands of Chinese students
came to Australian universities to study degrees.
- In 2019, the income raised
from Chinese students studying in Australia was valued
at around 12 billion Australian dollars.
That same year,
1.4 million Chinese tourists spent over $12 billion,
contributing to more than one quarter of Australia's
entire international tourism spend.
But while trade relations have thrived,
politically the two nations have kept their distance.
- For most of the last 30 years,
the way that that circle has been squared
is attempt to keep the two things in separate discussions.
We'll have a discussion about the political,
where we'll be able to disagree and have disputes at times,
whereas on the economic, we can have a discussion
solely about the economic,
and where those mutual benefits lie.
The challenge we've had over the last five years
is that kind of firewall between the two sides
has become harder and harder to sustain,
as many of those political difficulties
have become stronger and stronger.
- Is he on the side of the agencies that keep us safe,
or is he on the side of a foreign government?
- In 2017, Australian Labor senator,
Sam Dastyari, resigned from parliament after allegations,
that he'd received money from Chinese donors
affiliated with the Chinese Communist Party.
Shortly after, former prime minister Malcolm Turnbull
passed foreign interference laws
that targeted cases of espionage,
and required people acting
in the interest of overseas powers
to register and disclose their ties.
- Malcolm Turnbull at the time, while professing
that the legislation was not targeted at China,
said that the Australian people have now stood up
in his introduction for it,
which echoed what Mao Zedong said,
when he started the Chinese People's Republic.
- Modern China was founded in 1949
with these words...
The Chinese people have stood up.
- That was considered very insulting,
and pretty much laid out exactly
who this legislation was designed to target.
- A lot of Chinese Australians in the community,
who had connections with China, whether it be through trade,
whether it would be personal network connections,
they felt they were targets of that
foreign interference law.
10 years ago, or more,
those connections were really prized.
And these people,
those who had connections with the mainland,
whether through business, personal, or political,
were really valuable for Australia-China relations.
You know, at the end of 2016,
people with those kind of connections were really
seen as vectors of Chinese Communist Party influence.
- The Foreign Interference Act
came amid mounting concern
about China's influence over Australian politics.
What followed were a number of political disputes
that eroded bilateral relations even further.
- China's ambassador on the attack,
renewing criticism of Australia's ban on Huawei,
preventing the Chinese telco
from participating in Australia's 5G roll-out.
- As I see it, it's basically political motivated.
- China says Australia's decision
to offer safe haven to Hong Kong residents
is a serious violation of international law.
- Today, the PM hit back at China's escalating rhetoric,
after Beijing said Hong Kong protestors
were showing signs of terrorism.
- China has rejected suggestions
it's behind a large-scale cyber attack on Australia.
- No one was ever arguing,
that there shouldn't be an independent investigation
into the origins of the virus.
But it's curious,
why did Canberra have to take the lead on this?
- There's been a number of key points
along the bilateral timeline where we can
sort of pinpoint that spiraling downward of relationship.
And then when Australia called
for international investigation
into the origins of the coronavirus,
that really put China on attention.
- We will need an independent inquiry,
that looks at what has occurred here,
so we can learn the lessons.
- Many, I guess on the China side,
felt like issues which are difficult to navigate
shouldn't be broadcasted by megaphone,
they should be addressed quietly behind doors.
- Now, that inquiry was ultimately supported
and conducted by the World Health Assembly in that year.
But the Chinese government was extremely upset
about Australia's going forward and going first
in terms of that international call.
And the result was a series of trade sanctions
applied to nearly a dozen Australian commodities
over the latter part of 2020.
- In May 2020, an 80% tariff
was put on imports of barley,
and restrictions were placed on imports of beef,
which had brought in nearly $3 billion
for Australian farmers the year before.
- China announced an investigation
into Australian wine imports,
claiming that Australia was dumping
excess wine on the market.
Eventually that led to tariffs in excess of 200%
being put on Australian wine,
effectively killing the trade almost entirely.
- Some of these Chinese sanctions
have been put on in official manner,
particularly for barley, and wine, and coal.
But in some other agricultural products,
they've used gray zone tactics.
So these aren't official bans,
but unofficially these products
don't get passed through Chinese customs,
and therefore can't be sold in the country.
And it's very hard to be able to get
traction on them using international trade law,
because you would first have to prove
that it's even occurring.
- Before these recent tariffs
were placed on Australia,
China purchased around a third of all exports,
worth more than 150 billion Australian dollars.
Now, with restrictions in place,
some industries have fared better than others.
- Coal provides an illustrative example,
as the effect of that sanction
was just a musical chairs arrangement.
Different people were selling to different people,
but not really any overall loss
for any players in the market.
An alternative example would be for some of the exporters
who don't have alternate viable markets available to them.
In most years, China would buy
over 90% of Australia's rock lobster exports.
And having that market shut down overnight,
there was not really any other deep markets in Asia,
where you could place that many rock lobsters.
Wine suffered a similar fate,
as did Australian timber products.
So the effects ranged from mild to negligible,
to very catastrophic for other small industries as well.
- While China is economically
critical for Australia, the reverse is less true.
Some 70% of Australia's exports are resources
for which there are alternative suppliers.
However, there's one Australian export,
which can equate to up to 10% of the country's GDP,
and it remains critical to China.
- China keeps buying Australian iron ore.
Any sign that could change?
- Well, no, quite frankly, China needs it.
- China is the world's largest buyer of iron ore,
not just in Asia, but in the world.
And Australia for its part
is the world's largest exporter of iron ore,
about 80% of which goes to China.
So when you have the world's largest buyer
and the world's largest seller in the same region,
for both sides, there's not really any other alternative.
- At the height of the trade dispute
between Australia and China,
there were all these questions about, why doesn't China
just get its iron ore from somewhere else?
And certainly, they've tried.
They've tried to get iron ore from Brazil.
They've tried to get iron ore from Africa,
but the deposits in Africa aren't developed enough,
and the ones in Brazil are famously unreliable.
China couldn't cut off the iron ore trade with Australia.
And because of that, China's coercive trade measures
could not be as effective as they would otherwise be.
For all the diplomatic bluster and the trade coercion,
Australia and China were still held together
deep beneath all the noise and the fury
by this tight link of iron ore.
- While the iron ore sector
kept some form of trade ties intact,
the diplomatic side of the relationship broke down.
For two years, there were no high level
discussions between the countries.
- Australia said it tried to reach out
to its ministerial counterparts in China,
and it just wouldn't get a response,
which at some levels is frustrating,
for instance on trade relations, on foreign relations.
And in some cases it's dangerous,
when it comes to things like defense and military,
especially as Australia was still
running operations in the South China Sea,
and in waters not too far away from China itself.
So effectively for two years, Australia and China
didn't have diplomatic relations at a high level.
And that coincided with
the rise of wolf warrior diplomacy in China,
which meant that instead of talking,
there was a lot of yelling
from Beijing directed at Australia.
On the other side, however,
you then had the Morrison government,
who were very much hyping up the threat from China.
They were talking a lot about
the drums of war beating in Asia,
and comparing the current times
to the late 1930s before World War II.
- That kind of strident rhetoric
under the previous government really didn't sit well
with their Chinese counterparts in Beijing.
It didn't give them any sense of space into navigating
those delicate and complex international issues.
But again, I think, you know, China has some
blame to bear in the state of bilateral relations.
Its issuing of those 14 grievances
really puts Australia in a difficult spot.
- One piece of paper, 14 points,
a diplomatic shot from Beijing at Canberra,
that's been heard around the world.
- In November 2020,
a list was leaked to the Australian media,
allegedly from the Chinese government,
containing 14 grievances that would need to be addressed
before a trading relationship could resume.
The list included restricting free media
and preventing parliamentarians
from speaking out against China.
- The problem with the 14 grievances is that
they put Australia and China in a very difficult position.
Because Australia couldn't do any of them,
because if it did them,
it would be seen as giving up a lot of its democracy
and its free speech to appease China.
And China couldn't give up on them,
because they presented them to Australia in the first place.
It ends up being a bit of a hole,
which neither side could dig themselves out of.
- The Chinese ambassador to Australia
has since said the 14 points were misinterpreted.
- Eventually, the concerns have been
reported in a twisted way,
as the so-called preconditions, as demands.
This is uh, not true,
that's not true.
- Heightened political rhetoric
was amplified on both sides.
The result was a polarization of public opinion
and communities caught in the crossfire.
- The consequence of that not being specific,
and not being targeted in talking about,
you know, what aspects of China are we talking?
Are we talking about the government?
Are we talking about the Communist Party?
Chinese Australians got caught
in that middle of that change and that reassessment.
What happens in that sort of looking top down
is you miss the granular and the more complex issues,
that arise from community and social side of things.
And that is discrimination and racism being perpetrated,
because of the state of bilateral relations.
And I think the first and second year
of the Being Chinese in Australia survey
really showed one of that consequences.
And that was high rates of discrimination
and threats to Chinese Australians' physical safety.
- Since Anthony Albanese's Labor Party
won a national election in May 2022,
leaders from both countries have signaled
that they want to ease the tensions of recent years.
- Since Albanese actually came to power,
we've seen a far more subtle shift
in how his government is handling
the relationship with China.
They seem to be doing two things at once.
So on one hand, they are maintaining that line.
They are speaking up on human rights.
On the other hand,
they are very carefully exploring
how they can improve relations with the Chinese government.
We've seen the first high level diplomatic contact
between Australia and China in years.
- But mending relations
has not been without its challenges.
A new security deal signed
between the Solomon Islands and China in April 2022
has officials worried that it could pave
the way for a Chinese naval base in the Pacific.
It also raised concerns beyond just the APAC region.
- It was a shock wave to the US and Australia,
and it meant that they then rushed back out to the Pacific,
to try and repair relations
that they I guess, hadn't really known
were broken in the first place.
And so now the Pacific has become
an incredibly important part of the global
strategic contest between the US and China.
- The regional dynamics have shifted.
China has indicated its strategic ambitions
in the Indo-Pacific.
And that really complicates
a lot of things for the Australia-China relations.
I would suspect that you can have cordial trade relations
but disagree on a lot of other international issues,
whether it be security in the Indo-Pacific.
But I guess it all comes back to, you know,
where can the two countries find
common points of agreement and work on those?
And can the two countries
agree to disagree on various issues?
- What we've seen recently is the greatest power shift
in modern history across the Pacific, from the US to China.
We no longer have the comfort of the world
that's dominated by the US,
with whose values and political system we largely share.
- Australia's often described as being
on the front lines of the international debate
over how to handle the rise of China.
The question is whether or not Australia
can have a trade relationship with China again,
but a strategic relationship,
that's far more focused on the US.
Can Australia want different things for the region,
that maybe go against what China wants,
and still live peacefully and co-exist with China?
These are the questions that are gonna be asked
for years to come.