Dr. Muhammad Akram Zaheer
Australian relationship with China has evolved considerably since the 1990s, moving from a focus on economic cooperation to a more complex, multifaceted relationship characterized by both interdependence and strategic rivalry. Initially, Australian approach to China was dominated by a desire to strengthen economic ties and expand institutional cooperation. However, by 2017, tensions between the two nations began to escalate, marking a sharp shift from a prosperous economic partnership to a strategic and political contestation. This essay examines the trajectory of Australia-China relations, highlighting the key factors that have shaped the bilateral dynamic, from the initial economic cooperation in the 1990s to the geopolitical tensions of the present. In the 1990s, Australia sought to position itself as an active economic partner in Asia, capitalizing on the region’s growing economic power. China, undergoing significant reforms and opening its market to the global economy, became an increasingly important trading partner for Australia. By 2007, China overtook Japan as Australian largest trading partner, driven largely by Chinese demand for raw materials such as iron ore, coal and natural gas. In 2009, China emerged as a key market for Australian exports, solidifying economic ties and fostering a sense of mutual benefit. The economic interdependence between the two nations reached a peak with the signing of the China-Australia Free Trade Agreement (ChAFTA) in 2015. This agreement, which sought to lower trade barriers and enhance economic cooperation, was a pivotal moment in bilateral relations. It exemplified Australian commitment to strengthening its economic ties with China, while also positioning Australia as an essential partner in Chinese Belt and Road Initiative (BRI). Despite some initial concerns within Australia about the implications of Chinese growing economic influence, the trade relationship flourished in the years following the agreement, with China becoming Australian largest trading partner in terms of goods and services.
The dramatic shift in Australia-China relations began in 2017, marking the end of a period of economic optimism and the beginning of heightened political tensions. The catalyst for this change was a combination of internal and external factors, including growing concerns within Australia about Chinese political influence, security risks and the broader regional security environment. The deterioration of relations was triggered by Australian politicians’ increasing criticism of the Chinese political system, particularly concerning issues such as human rights and governance. However, the most significant moment came when then-Prime Minister Malcolm Turnbull publicly accused China of interfering in Australian domestic politics. This statement was followed by the implementation of new legislation aimed at countering foreign interference, which was widely perceived as targeting Chinese influence. The new laws were intended to curb espionage, cyber-attacks and attempts to influence Australian politics and they were seen as a direct response to growing concerns over Chinese activities in the region. The relationship further deteriorated in 2018 when Australia made the controversial decision to exclude Chinese telecommunications giant Huawei from its 5G network development. This move was motivated by security concerns, as the Australian government feared that Huawei’s involvement could lead to Chinese surveillance and data breaches. This decision was met with a strong response from China, which saw it as an act of hostility and an example of Australia aligning with the United States against Chinese interests. The situation worsened in 2020, when Australia called for an independent inquiry into the origins of the COVID-19 pandemic, a move that was viewed by Beijing as provocative. In retaliation, China imposed a series of sanctions on Australian exports, including barley, beef, wine and other agricultural products. The sanctions were a direct response to Australian stance on the pandemic and its growing alignment with the United States in opposing Chinese actions on the global stage. Amid the growing tensions with China, Australia sought to strengthen its strategic alliances, particularly with the United States. The increasing uncertainty in the Indo-Pacific region, driven in part by Chinese assertive actions in the South China Sea and its growing military presence, prompted Australia to reconsider its defense posture. The signing of the AUKUS agreement in 2021 marked a significant step in this direction. The agreement, which involves the United States, the United Kingdom and Australia, allows Australia to acquire nuclear-powered submarines, enhancing its military deterrence capabilities in the face of Chinese growing influence. The AUKUS agreement was seen by Beijing as a direct challenge to its ambitions in the Indo-Pacific region. China criticized the deal, accusing the three countries of adopting a “cold war mentality” and destabilizing the region. The move was also perceived as a demonstration of the United States’ commitment to containing Chinese rise and reinforcing its strategic dominance in the Indo-Pacific. Despite the strategic alignment with the U.S., Australian leadership under Prime Minister Scott Morrison did not entirely abandon efforts to maintain economic ties with China. However, the government continued to take measures to secure Australian national interests, including a greater focus on strengthening security relationships and increasing military spending.
In 2022, Australia saw a change in leadership with the election of Prime Minister Anthony Albanese and the return of the Australian Labor Party to power. Albanese’s administration made it clear that it sought to de-escalate tensions with China, signaling a shift toward a more diplomatic approach. One of the first signs of a thaw in relations came in 2022, when Australian Defence Minister Richard Marles held talks with Chinese Defence Minister Wei Fenghe at the Shangri-La Dialogue in Singapore. In the same year, Albanese met with Chinese President Xi Jinping at the G20 summit in Bali, marking the first meeting between leaders of both nations in six years. This was followed by the visit of Australian Foreign Minister Penny Wong to Beijing, signaling a return to diplomatic engagement. The series of meetings and reciprocal visits in 2023 and 2024 further demonstrated the willingness of both nations to restore ties. Australian trade ministers visited Beijing and Prime Minister Albanese made his first visit to China since 2016. In 2024, Chinese Foreign Minister Wang Yi visited Canberra and Chinese Premier Li Qiang visited Australia, marking the first visit by a Chinese Premier since 2017. These developments indicated that both countries were committed to rebuilding diplomatic relations, though challenges remained. Despite the positive signs of normalization, Australia continues to view China through a lens of strategic competition. Official documents, such as the 2023 Defence Strategic Review and the 2024 National Defence Strategy, highlight Australian concerns over Chinese growing regional influence and military modernization. The need to strengthen security ties with the U.S. and enhance Australian military capabilities reflects the ongoing apprehension about Chinese rise and its potential to disrupt the existing regional order. At the same time, Australian economic dependence on China remains undeniable. In 2023, China accounted for 26% of Australian goods and services trade and the bilateral trade volume continues to grow. This economic interdependence presents a significant challenge for Australian foreign policy, as it must balance the need for economic cooperation with the reality of Chinese growing assertiveness on the global stage. Public opinion in Australia has also shifted in response to Chinese growing influence. According to a 2024 survey by the Lowy Institute, there has been a noticeable increase in the perception of China as a security threat. While a segment of the Australian public remains optimistic about the economic benefits of the relationship, a growing number of Australians view China with suspicion and concern.
Australian relationship with China is characterized by a delicate balancing act between economic cooperation and strategic rivalry. While the bilateral relationship has experienced significant growth in terms of trade and institutional cooperation, the rise of China as a regional power has created tensions that threaten to undermine this partnership. The Australian government must navigate this complex dynamic by continuing to strengthen its strategic ties with the United States while seeking to maintain economic engagement with China. The path forward for Australia will require deft diplomacy, as it seeks to reconcile these competing interests and ensure its security in an increasingly uncertain Indo-Pacific region. As Chinese influence continues to grow, Australia will need to carefully calibrate its foreign and security policies to safeguard its national interests in a rapidly changing geopolitical landscape.
