The official visit of Australian Minister of Foreign Affairs Marise Payne to Beijing earlier this month and her meeting with Chinese Minister of Foreign Affairs Wang Yi (王毅) brought palpable relief to Canberra. Why was this trip so important?
Beijing had placed Australia in a diplomatic freeze for more than two years, particularly due to Canberra criticizing China for interfering in its affairs.
Australian legislation to curb foreign interference offended Beijing, even though it did not specifically mention China. Local media reports, some apparently based on leaked intelligence, revealed Canberra’s concern about interference.
As a result, China placed a diplomatic freeze on ministerial visits and Canberra was concerned that Beijing might follow up with trade restrictions.
Nothing of the sort happened, although there was enough of a slowdown in selective exports, such as wine, to create disquiet in Australia.
What might have prompted China to lift the freeze? Beijing apparently decided that isolating Australia took away needed flexibility. Diplomatic flexibility, as in China’s relations with Japan, might be the better approach.
Beijing has some serious issues with Tokyo — for example, sovereignty over the Diaoyutai Islands (釣魚台), known as the Senkaku Islands in Japan and the Diaoyu Islands (釣魚島) in China [and which Taiwan also claims] — and the tension had brought China and Japan to the point of, what might have been, a serious naval engagement.
However, while still claiming sovereignty over the group of islands, China is not making it a make-or-break issue. Its political and economic relationship with Japan is continuing apace.
Adding US President Donald Trump to international diplomacy has made room for selective cooperation between China and US allies such as Japan and Australia — for instance, over trade relations in industries where the US is putting up tariffs and creating a restrictive global trade regime.
China is the US’ target on trade, but Washington allies such as Germany and Canada are also affected. Australia has escaped so far, but China and Australia, as nations dependent on global free trade, have a common interest in keeping trade relatively open.
Australian Minister of Trade, Tourism and Investment Simon Birmingham, while attending the China International Import Expo in Shanghai last month, made statements to the Chinese media in support of Chinese economic growth and against trade protectionism. A free-trade agreement between China and Australia has lowered or eliminated many tariffs.
Voicing the hope that good communication could iron out any cultural and political differences, Birmingham was quoted as saying that “there are from time to time going to be issues that rub in relationships, but ... effective and strong communication between ourselves, between our governments — from a premise of mutual respect — is a very good place to start.”
The two will have challenges along the way. Australia’s security alliance with the US is an impediment, as strategic competition between the US and China is sharpening, abetted by their trade dispute. Australia generally favors open trade, with the WTO mechanism resolving trade disagreements, and China would like to have Australia on its side.
However, the strategic relationship between Australia and the US is long-standing, with Canberra hoping that the relationship would balance its ties with China, its largest trading partner. Also, Canberra is concerned about China’s growing role in the region — such as in the South China Sea — which it considers destabilizing.
By the same token, Canberra is cautious about some Chinese companies — such as Internet giant Huawei Technologies — which seek to pour substantial investment into Australia. Chinese companies are also seeking to invest in critical infrastructure projects such as electricity grids and gas pipelines.
Using national security considerations as a litmus test, Canberra has decided against allowing Chinese companies to invest in sectors regarded as sensitive.
Overlaying all this is China’s growing role in small South Pacific nations, such as Papua New Guinea, which received Chinese President Xi Jinping (習近平) amid much fanfare before hosting this month’s APEC leaders’ summit.
However, the frosty relations between China and the US kept the APEC summit from agreeing on a joint communique, the first time in the group’s history.
Xi’s visit to Papua New Guinea was the first by a Chinese president and there was a great display of friendship between the host and the Chinese delegation, with Xi cutting the ribbon for a multimillion-dollar Chinese-aided highway project. China has completed a number of prominent infrastructure projects in the South Pacific.
Papua New Guinea was an Australian colony, but was granted independence in 1975. Australia is the largest aid donor in the region, but suddenly finds China on its doorstep, bringing the perceived Chinese threat much closer.
Australia has responded with a US$3 billion infrastructure fund for the region. Also, Australia is to partner with the US to develop the Lombrum Naval Base on Manus Island in Papua New Guinea.
Activity in the region might develop into a Pacific version of the Great Game, the fabled race for power and influence between Great Britain and Russia in 19th-century Central Asia. In that case, the thaw between Australia and China might just be a blip in the larger geopolitics of the region.
Sushil Seth is a commentator based in Australia.
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