At the beginning of 2023, Australia’s relationship with the People’s Republic of China appeared to be one of hostility across the board, in both military and economic terms.
In March, the Nine newspapers ran a series titled ‘Red Alert’, premised on the claim that China and Australia could be at war within three years. The allusion to communism was presumably intentional, even though it is now almost impossible to detect any trace of revolutionary fervour amid the old-fashioned nationalist rhetoric emerging from Beijing.
On the military front, the Albanese government had embraced the AUKUS agreement even more fervently than its predecessors. China perceives itself in the crosshairs of the trilateral arrangement, which it describes as ‘extremely irresponsible’.
In economic terms, China maintained its restrictions on Australian exports of coal, copper, sugar, cotton, wine and barley. These restrictions — widely seen as an exercise in ‘wolf warrior’ diplomacy — were imposed in 2020 in retaliation for then-prime minister Scott Morrison’s quixotic decision to press China on its supposed responsibility for the outbreak of the COVID-19 virus. Canberra followed up by banning Belt and Road Initiative projects, a central element of Xi Jinping’s geopolitical strategy. In sum, the relationship between the Australian government and the PRC hit its lowest ebb in many years, arguably since the opening of diplomatic relationships in the 1970s. Hopes for a constructive relationship based on ‘doux commerce’ seemed to have vanished.
But as the end of 2023 approaches, the economic picture looks radically different, even if the military sketch has stayed familiar. Most of the trade barriers have been removed and the rhetoric has been toned down. The two sides have also resumed annual leader-level meetings. While the Albanese government has avoided explicit use of the term ‘reset’, other commentators have been happy to adopt this description.This change reflects a return to more pragmatic thinking. Like most newly powerful countries, China initially over-estimated its strength and believed its economic power enabled it to bully other countries into acquiescence on a range of issues.
John Quiggin is Australian Laureate Fellow at the School of Economics at the University of Queensland.
Source: East Asia Forum
