Views from across the aisle: in the latest editions of China Matters Explores, two Members of Parliament, one from each side of the aisle, pen their views on what Australia should do about its relationship with the People’s Republic of China.

What should Australia do about…

its relationship with the PRC?

by Dave Sharma

Australia’s relationship with the People’s Republic of China (PRC) has become harder to manage in the past decade.

Part of this is due to the PRC’s increased strategic weight, and the growing assertiveness and ambition that has accompanied this. Part is due to the more fractured geopolitical world we live in: the era of the United States as the sole superpower is ending, while the new order is yet to crystallise. Another part is down to growing recognition in Australia that freedom from foreign interference cannot be taken for granted but must be actively safeguarded.

Australia must seek a constructive relationship with the PRC. We cannot afford for our relationship to be dysfunctional, but it needs to be built, step-by-step, on the basis of these new realities.

Recognise the PRC is more assertive

In the last 20 years, the PRC’s economy has grown from roughly 4 per cent of global GDP to around 18 per cent. With growing economic weight has come growing strategic clout. The PRC is investing in capabilities to wield more power on the world stage, from a blue-water navy to a space program, and from cultural institutes to the Belt and Road Initiative.

The PRC’s strategic doctrine and level of assertiveness is changing alongside. Its strategy has shifted from one that stressed the need to avoid confrontation – the “hide your strength, bide your time” maxim of Deng Xiaoping – via one that prioritised the PRC’s peaceful integration into Hu Jintao’s “harmonious world”, to the more nationalist goal of Xi Jinping’s “Chinese dream”.

Beijing is now seeking to accelerate what the Central Committee of the Communist Party of China described in October as a “profound adjustment in the international balance of power”.¹ This has been given a sharper edge by internal political changes in the PRC – Xi’s actions to concentrate power into his own hands, to centralise decision-making and to weaken potential rivals.

The PRC of 2020 is more powerful, more assertive, more nationalistic and more ambitious than the PRC of 2000. It should come as no surprise that Australia finds this a more difficult relationship to manage. We are not alone in this.

Resist calls for wholesale decoupling

The PRC is deeply integrated into the global economy, accounting for the largest share of world trade and playing a pivotal role in global supply chains. In some key sectors there is a case for lessening reliance on the PRC, diversifying suppliers and re-building national capability. But wholesale decoupling cannot be a serious proposition, especially for a country such as Australia, which has been a massive beneficiary of the PRC’s economic growth and industrialisation.

Similarly, we should resist language or policy that smacks of containment. The PRC has a role to play in a more multipolar world, as one of the great powers. That role needs to be defined, not denied. While Beijing will never sign up fully to the liberal world order, we must find ways for it to contribute to global public goods.

Understand Australia’s pivotal role

Among Western nations, Australia has the highest level of integration and exposure to the PRC: It is our largest trading partner, our largest source of tourists and foreign students and one of our largest sources of migrants. We reside in the same strategic neighbourhood.

Other Western nations look to us for policy guidance on the PRC. In turn, Beijing sees Australia’s behaviour as having a demonstration effect on other Western nations: If the PRC is successful in brow-beating our political class and constraining our policy choices, it will serve as a lesson to others. But if Australia maintains its course in the face of pressure, it will strengthen resolve among other nations to do likewise.

This is why Australia is currently a target for Beijing’s statecraft, and why we should expect a more challenging and turbulent relationship with the PRC over the next two decades. We should remain alert to opportunities to improve the tone of the relationship and avoid unnecessary antagonism. But there is no simple “reset” on offer with the PRC.

Be frank with the Australian public

We need public support for the difficult road ahead. This requires greater frankness from our political leaders. We should be more open and truthful with the public about the challenges of the relationship, rather than seeking to shield them from it. This includes being more willing to disclose attempts by the PRC to interfere in Australia, from large-scale cyberattacks to attempts to intimidate Chinese Australian communities.

More transparency and open debate will nurture supportive public opinion. Domestic actors – from business leaders to politicians – need to eschew the temptation for cheap point-scoring with empty accusations of mismanaging the relationship. Similarly, we must avoid a descent into McCarthyism. The public discussion has to be sophisticated enough to allow an exchange of views without people’s patriotism being called into question. That is exactly the sort of internal division that the PRC seeks to exploit.

Articulate our redlines clearly

Along with a cool head, we need a clinical approach to articulating our non-negotiable sovereign interests. Beijing frequently communicates its redlines to us: from its system of government to its territorial integrity and ultimate sovereignty over restive provinces. By and large, we respect these redlines.

In return, Australia must clearly define our redlines. We must make it clear that certain elements underpinning our sovereignty and national character are non-negotiable and off-limits to foreign actors. We are entitled to seek the same level of respect for these redlines from the PRC as the PRC demands from us.

Beijing does not control all the leverage in this relationship. We should find ways to remind Beijing that the respect we pay to the PRC’s redlines requires reciprocity. The PRC’s many sensitivities include Taiwan’s engagement with the outside world, the status of ethnic minorities, including in Xinjiang and Tibet, the legitimacy of its system of government, and internal corruption.

View our Chinese communities as assets

We must see Australia’s Chinese communities as assets. This means defending them when needed from attacks questioning their loyalty or patriotism. Not only are such attacks deeply offensive to our national character, they do us immense strategic harm.

Our security agencies need to better engage Australia’s Chinese communities. These communities need to be aware of vulnerabilities and alert to attempts to recruit them, and the agencies need their assistance and cooperation in mapping such activities.

Australia’s Islamic community has been a great resource in fighting attempts by the Islamic State group to radicalise our citizens and turn them against Australia. We need to have the same level of cooperation with Australia’s Chinese communities.

To do this well, our security agencies need to actively recruit more Chinese Australians and more Mandarin speakers. This will require a new approach to security clearances. Many candidates are being turned away and others are leaving government service because of this issue.

Build new coalitions abroad

The US no longer has the capability or the will to single-handedly manage the PRC’s rise. We need to build broader coalitions to manage and balance Beijing’s behaviour.

The PRC has successfully used its size to pick off nations one-by-one in bilateral contests. It has also exploited US neglect of the multilateral system under the Trump administration to massively increase its influence over multilateral bodies.

To resist being picked off, and to maintain our influence in the multilateral system, nations committed to the liberal order need to collaborate and stand united in defence of shared principles. The task of our diplomacy, which will require a step-change in its level of activity and assertiveness, is to build channels for such coalitions to form and respond.

It will be essential to build stronger and closer ties with India and Japan – two major Indo-Pacific powers – through vehicles such as the Quadrilateral Security Dialogue. In addition to regular meetings of Quad foreign ministers, we should propose regular meetings of Quad defence ministers. We must also build closer ties with other Asian powers that share our commitment to the liberal order, including Indonesia, South Korea, Singapore and Vietnam.

Europe can be a critically supportive actor of these efforts, especially in the defence of global norms and in multilateral settings. Older groupings, such as the Five Eyes, the Commonwealth and the Organisation for Economic Co-operation and Development (OECD), need to be repurposed for the challenge at hand. New groups, such as a new version of a G10 grouping – the G7 plus Australia, South Korea and India – could also play an important role in managing the PRC’s rise. Australia should seek to institutionalise such a body.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) should be harnessed to speak out as a group against weaponising trade to secure strategic objectives. Such actions by the PRC are in clear violation of global trade norms and amount to trade bullying and economic coercion. We should use the dispute settlement mechanisms of the World Trade Organization (WTO) to push back. With Joe Biden in the White House, the US should be encouraged back into the CPTPP. Taiwan, in its capacity as an Asia-Pacific economy, should also be invited to join the CPTPP, regardless of Beijing’s opposition.

Our alliance with the US will remain fundamental. We should encourage the Biden administration to take a regional, allied-centric approach toward managing the PRC, rather than the bilateralism that characterised the Trump and Obama administrations.

Beijing likes to portray us as a US proxy. While we should not shy away from our alliance with the US, we should state clearly that we reach our own national decisions, based on our own national interests.

Finally, show patience and resolve

Recent PRC actions, from “wolf warrior” diplomacy to trade disruption, are an attempt to coerce us into reversing policy decisions taken in our national interest. No self-respecting nation should give in to such pressure, and such tactics will not work with Australia.

Rather than dividing public sentiment and driving calls for capitulation, such tactics have only united public opinion and encouraged greater resolve.

We should persist with efforts to explain our own approach to Beijing: that we seek a constructive relationship, that we accept the PRC’s legitimacy as a great power, but that certain core interests are not negotiable. This might take a few years, but ultimately the strong structural basis of our relationship and the PRC’s pragmatism should reassert themselves. At that point we should reach a new equilibrium in the relationship: one that sees us trade and cooperate productively in some areas, but is respectful of core interests and accepts the persistence of fundamental differences.

Recommendations

• Australia should remain resolved and patient: We should avoid overreaction or panic. We must recognise that Beijing is testing us and should expect continued turbulence.
• We should strengthen our resilience and capacity to resist pressure. This must include more investment in defence and diplomacy and greater trade diversification.
• Our diplomacy must build new coalitions to defend the liberal world order. This might include institutionalising a new version of the G10 and regular meetings of Quad defence ministers.
• We must be open and honest with the Australian public about the objectionable elements of Beijing’s behaviour and the challenges of this relationship.
• Australia should articulate its redlines clearly to Beijing and seek reciprocal respect for them.
• Australia’s Chinese communities should be protected and harnessed as assets. The issue with security clearances for Chinese Australians should be addressed.
• We should use multilateral forums, including the WTO, to hold the PRC accountable for its use of trade as a political weapon and to defend the rules-based trading system.
• Australia should encourage the US to join the CPTPP and support efforts to include Taiwan.

Author

Dave Sharma was elected the Federal Liberal Member for Wentworth in 2019. Prior to becoming a politician he served as a peacekeeper in Papua New Guinea, worked as an adviser to Foreign Minister Alexander Downer, headed the International Division of the Department of Prime Minister and Cabinet, and served as a diplomat. He was Australia’s Ambassador to Israel 2013–2017.

Notes

1. Jude Blanchette and Scott Kennedy, “China’s Fifth Plenum: Reading the Initial Tea Leaves”, Center for Strategic & International Studies, 30 October 2020, https://www.csis.org/analysis/chinas-fifth-plenum-reading-initial-tea-leaves

What should Australia do about…

its relationship with the PRC?

by Tim Watts

The COVID-19 pandemic has put a spotlight on a difficult new phase of the relationship between Australia and the People’s Republic of China (PRC).

The PRC’s relationship with the United States – Australia’s enduring security partner – has become increasingly confrontational. Under the leadership of President Xi Jinping, the PRC has become more assertive in pursuing its clearly stated interests, both in its diplomatic relations around the world and strategically in the Indo-Pacific. At the same time, under President Donald Trump, the US has become less consistent in its engagement with the world in general, and the PRC in particular. Between the PRC’s “wolf warrior” diplomats and @realDonaldTrump, PRC–US power competition makes Australia’s relationship with the PRC even more difficult to navigate.

Simultaneously, Australia and the PRC have had a series of substantive disagreements. Issues like the detention of Australian citizens Yang Hengjun and Cheng Lei, the repression of Uighurs and other minorities, Hong Kong, cybersecurity, and reports of interference in our democracy by the Communist Party of China show fundamental differences in values and interests between Australia and the PRC. This is not going to change anytime soon and we can expect further substantive disagreements.

Nevertheless, decoupling from the PRC would be an unprecedented act of national self-sabotage. The scale of Australia’s economic engagement with the PRC over the past two decades has profoundly benefited both nations. Driven by Beijing’s post-COVID-19 stimulus measures, the PRC accounted for 48.8 per cent of Australian merchandise exports in the June quarter, more than double the size of our next largest export market, Japan. In 2019, the PRC also overtook the US to become Australia’s leading international partner in producing scientific publications.

This has created widespread anxiety about the extent of Australia’s economic reliance on trade with the PRC. Three-quarters of respondents in the 2020 Lowy Institute Poll agreed that Australia was too economically reliant on the PRC. Recent disputes over wheat, lobster, wine, barley, beef, tourists and students have significantly – and reasonably – exacerbated these fears.

What can we do?

Managing the difficult dynamics of the Australia–PRC relationship is, in the words of Labor’s Shadow Foreign Affairs Minister, Penny Wong, a “consequential and complex” challenge. No silver bullet will deliver a quick fix.

Regardless, it is in the interests of both Australia and the PRC to have a productive relationship. There are international issues where Australia and the PRC share similar interests and should constructively work together, like climate change and disaster response.

Consistent, persistent diplomacy and political leadership over the long-term is needed to ensure that Australia is able to cooperate with the PRC where we can, clearly stand up for our values and interests where they conflict with those of the PRC, and understand how to manage these differences where they arise. Given the differing values and interests in the Australia–PRC relationship, understanding, rather than agreement, may be the most sensible objective here.

This will require maintaining long-term consistency of message in our engagement with the PRC. This will demand a lot of Australia’s political leaders. Conflict has come to define the relationship in the public discourse. But being clear in defining our national interests – particularly in safeguarding our sovereignty and upholding the rules-based international system – which are above the domestic political fray, should not preclude considered engagement.

Australia’s leaders will need to work hard to ensure the relationship is not subsumed by short-term domestic politics and that Government leaders speak with one voice while engaging the PRC. To do this, the Prime Minister and the Foreign Minister need to lead the conversation, setting out a long-term plan for the relationship and explaining this to the Australian people – including the private sector. Politicians should avoid gratuitous and inflammatory actions that seek to sow division or set tests of patriotism for partisan ends.

A good start for the Australian Government would be regular background briefings on the context for the relationship from DFAT, Home Affairs, Treasury, Defence and the intelligence agencies for key stakeholders: parliamentarians, the media, and state and territory governments. While the Opposition has been calling for this since August 2019, these requests have so far been rejected by the Foreign Minister. As media coverage continues to focus on specific disagreements between Australia and the PRC, these briefings would provide perspective on where those differences fit into the broader Australia–PRC relationship.

A priority for these briefings should be to bring context to Australia’s relationship with the PRC. Viewed in isolation, the structural challenges facing the Australia–PRC relationship are significant. But we are far from alone. At least 78 countries, like Australia, have some version of an official strategic partnership with the PRC. Nor are we the only country to experience a period of frosty diplomatic relations – as South Korea, Canada, France, the UK, the Czech Republic and India can attest. Crucially, the briefings would help stakeholders understand we are not the only country that wants an international order governed by institutions and the rule of law rather than by great power rivalry and the arbitrary exercise of power.

Build an independent foreign policy identity in Southeast Asia

This sense of perspective – the realisation that we are not alone in confronting these challenges – should ground the most important step that Australia could take for its relationship with the PRC post-COVID-19: build an independent foreign policy identity defined by the shared interests of significant and emerging powers in Southeast Asia.

While our strategic interests will continue to unfold in the broader Indo-Pacific, there are reasons for Australia to focus our attention on our immediate neighbourhood. Our geography means that we will always share interests with Southeast Asian nations on issues such as trade and economic integration, maritime cooperation, climate change, human trafficking, transnational crime and terrorism and, saliently, public health. More broadly though, Southeast Asia is home to countries that share our interests: significant and emerging powers like Indonesia, Malaysia, Thailand, the Philippines, Vietnam and Singapore that want to see a rules-based international system and are disconcerted by great power geopolitics.

Investing in an Australian foreign policy identity grounded in our interests as a significant power in Southeast Asia would not avoid the difficult dynamics of the Australia–PRC relationship. We would still confront substantive disagreements and the pressures of geostrategic positioning. But it would provide an intellectual frame for Australia’s efforts to shape a rules-based international system anchored in our region.

The wake of COVID-19 is a unique opportunity for Australia to deepen our relationships here. Countries like Indonesia and the Philippines are suffering acutely from the health crisis, while countries like Malaysia and Thailand face great challenges in the accompanying economic crisis. We should make it clear to our neighbours that we want to face these challenges together and aim for a seat at the table in the regional response. If, as is likely, the PRC is engaged in similar endeavours that are welcomed by regional partners, then we should not rule out engagement with it too.

The special ASEAN Plus Three (the PRC, Japan and South Korea) Summit that convened in mid-April is exactly the kind of forum that we should aim for inclusion in. The Summit agreed on a regional response to COVID-19 and canvassed action on a medical supplies reserve, on using technology for outbreak tracking and information sharing, and on the creation of a COVID-19 response fund. It also canvassed regional cooperation on the economic recovery – a key factor for Australia’s own recovery given that ASEAN states collectively are our second largest trading partner. There was much that Australia could have offered had we been at the table, not only through the Summit itself, but bilaterally through discussions with ASEAN member states around the meeting.

The Government’s decision to belatedly come to the table in November to offer some direct support for Southeast Asia’s recovery and resilience was welcome. Increasing development assistance in this year’s budget and providing $500 million for Southeast Asia specifically was useful, but it follows an overall cut of nearly 30 per cent ($385 million) to Australia’s Overseas Development Assistance to Southeast Asia since 2014. This included a 50 per cent cut in aid to Indonesia, encompassing an 85 per cent ($53 million) cut to health program assistance there.

Upgrading our institutions and our ambition

One-off announcements are not good enough. We need sustained engagement and the funds to back it up – not just for this pandemic but also for the next crisis: climate change. We should be careful not to cast this support in zero-sum terms. ASEAN states have made it clear they do not want to be caught in the middle of the deteriorating PRC–US relationship. Australia should also be making this clear to the incoming Biden administration.

These tactical opportunities for engagement in the wake of COVID-19 are important, but to truly embed ourselves in the region we need a comprehensive Indo-Pacific strategy that commits to sustained engagement with Southeast Asia. This requires a significant, long-term upgrade in our institutions of engagement at home; in our study abroad programs; in the study of Asian languages at our schools and universities; in the regional expertise within our universities; in our broader Asian studies resources including the Asian collections at the National Library; and in youth dialogues in the region. Part of this involves sticking with existing models that
have proven their success over the long-term. The fact that the Australian Consortium for In-Country Indonesian Studies (ACICIS) was forced to make 60 per cent of its staff redundant after the Government initially ignored its request for emergency funding during the COVID-19 travel shutdown is a great example of what not to do here.

But we also need to upgrade our ambition. Take the flagship of the Australian Government’s people-to-people engagement with our region, the New Colombo Plan. Since its inception, around 40 000 students have spent time in Asia under the plan and the 2017 Foreign Policy White Paper aimed for 10 000 students to participate each year. In comparison, more than 6 million students have participated in the European Union’s Erasmus+ study abroad program to promote European engagement over a similar period. Around 853 000 students participated in 2018 alone. Even adjusted for our smaller student population, Erasmus represents a vastly larger commitment to regional engagement.

There are no easy answers to improving the Australia–PRC bilateral relationship. However, the current moment provides an opportunity for shaping the context of the relationship. The Australian Government can do a much better job at leading the debate and explaining the dynamics of the relationship – rather than leaving a void for others to fill.

Recommendations

• DFAT, Home Affairs, Treasury, Defence and the intelligence agencies should provide regular background briefings on the Australia–PRC relationship and Australia’s foreign policy strategy to key actors in the relationship: parliamentarians, the media, and state and territory governments.
• Australia should continue to engage with the PRC. We should cooperate where we can, stand up for our values and interests where they conflict, and manage differences where they arise.
• Australia should build an independent foreign policy identity in Southeast Asia. We should frame our foreign policy actions as those of a significant power in Southeast Asia whose priority is the promotion of a rules-based international system and multipolar regional order.
• Australia should make it clear to ASEAN members that we are keen to participate in and contribute to regional responses to COVID-19 through both government-to-government cooperation and development assistance.
• Australia should develop a comprehensive Indo-Pacific strategy with a plan for deepening partnerships in Southeast Asia across economics, culture, people and security for the long-term. We should reverse cuts to the National Library’s Asia collections, Asian languages courses at our universities and groups like ACICIS. We should invest in institutions to promote people-to-people ties via youth dialogues and the New Colombo Plan.
• Australia should invest more in Southeast Asia. At the very least we should reverse the nearly 30 per cent cut to Australia’s Overseas Development Assistance to Southeast Asia since 2014.

Author

Tim Watts is the Federal Labor Member for Gellibrand and the Shadow Assistant Minister for Communications and Cyber Security. Tim worked in the IT and telecommunications sector for the better part of a decade, as a Senior Manager at Telstra and a Solicitor at Mallesons Stephen Jaques. He has a Bachelor of Laws (Hons) from Bond University, a Master of Public Policy from Monash University and a Master of Politics and Communication from the London School of Economics.

China Matters does not have an institutional view; the views expressed here are the authors’.

Elected officials in charge of their party’s foreign policy positions regularly provide their perspectives on the Australia-PRC relationship. In the interests of broadening the public discussion about ways to manage the challenges in our ties with the PRC, we invited two Members of Parliament, Mr Dave Sharma MP and Mr Tim Watts MP, to pen their views on what Australia should do about its relations with the PRC. We are publishing the two briefs together under the heading, ‘Views from across the aisle’, on the same day (8 December 2020).

China Matters is grateful to four anonymous reviewers who commented on a draft of each text which did not identify the author. We welcome alternative views and recommendations, and will publish them on our website. Please send them to [email protected].