China-Australia relations

China and Australia show how to deal with differences

The two sides have some disagreements but as Premier Li Keqiang’s charm offensive Down Under shows, a pragmatic approach to ties benefits all

PUBLISHED : Wednesday, 29 March, 2017, 2:52am
UPDATED : Wednesday, 29 March, 2017, 2:52am

Amid global uncertainties following the election of Donald Trump as US president, the fact that Premier Li Keqiang (李克強) has just spent five days cementing ties with a trading partner that is only China’s eighth largest is testament to the importance it attaches to Australia – one of America’s staunchest allies. The signs ahead of Li’s talks with Prime Minister Malcolm Turnbull were problematic. First, Foreign Minister Julie Bishop had given a speech urging Beijing to adopt a more liberal and democratic system at home and abroad, prompting a Chinese foreign ministry spokesman to urge Australia to “discard ideological prejudice and take the right approach to China”.

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Just before Li’s visit, Australia signed a letter with 10 other nations asking China to stop torturing human-rights lawyers. And the Turnbull government had also rebuffed an overture to bring its northern development plans under Beijing’s “One Belt, One Road” initiative.

However, contrary to the foreign ministry’s rhetoric, Beijing turned on a charm offensive to ensure Li’s high-profile visit was a success. It included shelving tough new regulations on some e-commerce imports such as dairy, vitamin supplements and infant milk formula, extra access for Australian beef exports worth about A$400 million (HK$2.4 billion) a year, and bringing forward a review of access to highly lucrative services markets under the China-Australia free trade agreement, such as education, health, finance and care for the elderly.

Beijing has ramped up its engagement with Australia when regional governments are unsure whether Trump will maintain America’s regional security role. In that regard, Li repeated a message China has spread in Southeast Asia – Australia did not have to take sides between China and the US, though Bishop reaffirmed the pro-US stance last week. The charm offensive shows China senses a possible opening for a realignment of Australia’s ties. Unsurprisingly, local foreign affairs commentary has cautioned that while Australia should embrace China, it should also diversify its economic and security relations to balance China’s growing hard economic power.

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Despite protectionism, the complementary alignment of the Chinese and Australian economies is cited as an example of how free trade can be mutually beneficial without the friction of tit-for-tat trade rivalries. However, Li’s visit has also defined the boundaries of harmony in the two countries’ interests. Clearly they exclude China’s disputed claims in the South China Sea. That said, development of economic ties can only be positive for wider understanding, because regional insecurities risk economic consequences. Balancing core security and commercial interests may remain a work in progress, but each side has a better measure of the other’s top-level thinking.