New Australian PM must seize the chance to rebuild China relations

Scott Morrison has a mixed record on dealings with Beijing, having both backed closer engagement and blocked investment on national security and protectionist grounds

PUBLISHED : Wednesday, 29 August, 2018, 10:04pm
UPDATED : Wednesday, 29 August, 2018, 11:39pm

Australia has enjoyed nearly 30 years of economic growth, a recipe for political stability. But in the past 11 years it has had seven prime ministers, with only two of the changes having resulted from a popular vote. The remainder came from internal party coups.

Scott Morrison’s emergence as Liberal Party leader and Australia’s 30th prime minister is one of the latter, in the latest example of instability driven by differences over climate change and energy policy for a decade. It is not clear how Morrison will try to defuse this issue.

Of more immediate importance to the region is whether a change at the top will lead to a reset of Sino-Australian relations, amid strained ties over claims of political meddling, legislation against foreign interference seen as targeting China, and barriers to investment.

Indeed, the political drama distracted attention from what would normally have been the biggest news last week – an announcement by Morrison as the then treasurer of a decision by cabinet’s national security committee on 5G security, effectively barring Chinese giants Huawei and ZTE from building the fifth-generation telecoms network.

The system will connect utilities, technologies, systems in homes, factories and farms and so on, enabling the internet of things. The key sentence in the decision bans “vendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law”.

Canberra expected Beijing’s displeasure, with China’s foreign ministry expressing “grave concern” at “discriminatory measures”, and its commerce ministry warning of “a negative impact on the business interests of China and Australian companies”.

Australia, however, is not alone in its concerns, with the United States having banned Huawei from procurement contracts, and Canadian officials expected in Canberra to study the Huawei ban ahead of their own decision. And China, after all, does not allow foreign firms into its telecoms market.

Australia’s new PM Scott Morrison: bad news for China?

That said, Morrison has a mixed record on China, having both backed closer engagement and blocked investment on national security and protectionist grounds. He has warned in the past of the “danger” in demands to restrict foreign investment and said fears over Chinese ownership of agricultural land were exaggerated.

Last month, he refused to blame China alone for the trade war with the US, saying both sides could show “common sense” and back off.

The consensus among observers is that Morrison’s election is unlikely to lead to a major shift in Canberra’s relationship with Beijing in the short term. Canberra still has to balance a US security relationship with a dominant Chinese trade relationship. Morrison should seize the chance to rebuild constructive relations based on goodwill and mutual trust and frank dialogue.