China-Australia relations: chance for ‘thaw’, but can Beijing, Canberra mend fractured trade ties?

A leadership change in Australia presents an opportunity for at least a ‘thawing’ of trade ties and diplomatic exchanges with China after a tumultuous two years

China’s ambassador to Australia last week said that it was ‘important how we can maintain the momentum and put our relationship back on the right track’

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China’s ambassador to Australia, Xiao Qian (seated right), said at a forum last week that ministerial talks between the two sides were “very significant” after a long and difficult period in relations. Photo: AP

Published: 4:30am, 29 Jun 2022

As the adage goes, it is a marathon, not a sprint. And insofar as that applies to China-Australia relations over the past 26 months, rather than miles, the finish line still appears a long way off.

But even with fractured trade ties marred by missed opportunities for reconciliation, the goal line in this case – a return to normalcy between the major trading partners – is perhaps still within reach, according to analysts.

Canberra and Beijing have been at odds since April 2020, when the former called for an inquiry into the origin of the coronavirus without diplomatic consultations beforehand. What followed has been a tit-for-tat battle, with trade taking the brunt of the blows.

Australia’s wine industry has been one of the biggest losers in that respect, taking an A$844 million (US$585 million) hit in the year that ended in March, after China applied duties on Australian wine in March 2021 following anti-dumping investigations.

Canberra’s exclusion of Huawei Technologies Co. from its 5G network also drew the ire of Beijing and led to bans and restrictions on Australian coal, beef, lobsters, log timber and barley.

The change in government represents an opportunity for a thawing of relations between China and Australia

Bryan Mercurio

But after Anthony Albanese’s Labor Party defeated Scott Morrison’s conservative government last month, defence minister Richard Marles met his Chinese counterpart, Wei Fenghe, on the sidelines of the Shangri-La security summit earlier this month.