The transformation of Australian policy towards China was a decisive event under the Turnbull government — it constitutes a personal journey by Malcolm Turnbull in response to an assertive and hostile China that saw a permanent reset in relations, as Scott Morrison is demonstrating.
Turnbull arrived as prime minister imbued with a businessman’s optimism on China; witness his 2011 London speech inspired by China’s economic opportunities. He rebuffed conservatives talking up a new Cold War, said China’s economic boom would not translate into a military threat, and argued China “had even more to lose from the economic woes a major conflict would bring”.
This was Turnbull as rationalist and optimist. Referring to the US and China, he said: “We have every reason, and indeed every prospect, of remaining close and becoming closer friends of those giants.”
Like many, he got China wrong and initially missed the game plan of President Xi Jinping.
Turnbull jokes that being shocked by China’s spying is akin to the movie Casablanca, when Captain Renault declares he is “shocked — shocked” to discover gambling in Rick’s cafe. But Turnbull was shocked by China. He was shocked as prime minister to find “the industrial scale, scope and effectiveness of Chinese intelligence gathering and in particular cyber espionage”. He was shocked to find “they do more of it than anyone else, by far, and apply more resources to it than anyone else”. And he found “they’re not embarrassed by being caught”.
Turnbull said his early meetings with Xi and Premier Li Keqiang went well — indeed, he calls every such meeting a success. In his memoir he describes them as “thoughtful technocrats, professional and pragmatic managers”. It was Xi who raised the South China Sea issue, delivering a message that Turnbull summarises as: “It’s a long way from Australia, stay out of it.” Xi spoke to Turnbull about the need to avoid the “Thucydides trap” (war between an established power like the US and rising power like China).
In 2015 and 2016 Turnbull, still the rationalist, said: “The point I made repeatedly to Chinese leaders — and Obama said he made the same point — was that their whole South China Sea strategy seemed quite counter-productive. Was the tenuous advantage given by establishing these forward operating bases worth the tensions that it was creating?”
For Xi, the answer was yes. Turnbull (and Barack Obama) were talking to a China that no longer existed. Xi must have found their toothless declarations quaint. But Xi got things wrong as well. He told Turnbull he believed he would be able to conduct business with Donald Trump and Trump’s bellicose rhetoric “wouldn’t be followed through in office”. Turnbull said: “We were all wrong there.”
Dining at his home with Li in 2017 Turnbull raised the opportunity that Trump offered China, given he was dumping the Trans-Pacific Partnership trade deal and dumping on America’s Asian allies. Turnbull asked: “Surely China should want to be seen as more of a cuddly panda than a scary dragon? Surely the goal should be to win the trust and confidence of your neighbours?”
Li dodged the issue. “Aha, the Thucydides trap again,” he laughed. The reality is that China had no truck with Turnbull’s logic. And Turnbull understood; the wheel was turning. Turnbull told Li that Australia would not sign up to Xi’s grand project — the Belt and Road Initiative. “We would not sign up to a slogan when we had no control over its content or substance,” Turnbull said.
He was shaken by Xi’s construction of islands as military bases, used for Chinese intimidation and Xi’s flouting of a binding international tribunal decision. Turnbull sent Australian planes and ships through the South China Sea in international waters only to find “those transits were regularly challenged by Chinese aircraft or ships”. But Turnbull declined to follow the US and send ships to transit within 12 nautical miles of the islands.
“My judgment was that we could easily play into China’s hands if we did,” he said. “If one of our ships were to be rammed and disabled within the 12-mile limit by a Chinese vessel, we don’t have the capacity to retaliate. If the Americans backed us in, then the Chinese would back off. But if Washington hesitated or, for whatever reasons, decided not to or was unable immediately to intervene, then China would have achieved an enormous propaganda win.” He decided “it wasn’t a risk worth taking” — a statement that reveals so much.
His earlier views of China were in ruins. But Turnbull had been equally shaken by briefings he got from ASIO chief Duncan Lewis, whom he found to be “very level-headed” on China’s spying. Turnbull said: “It was mostly cyber-espionage, their appetite for information seemed limitless, ranging from businesses, to universities, to government departments. It was on an industrial scale. Their agenda included co-opting Australian politicians and opinion leaders.”
Turnbull was convinced that previous “Australian governments had simply not been paying attention” to China’s penetration and that “our espionage laws were out of date”. Turnbull didn’t just accept what ASIO told him — he probed and tested. The government devised new foreign interference laws for a threat (from China) it branded as unprecedented.
Turnbull saw the strategic reality. “We recognised that China’s goal was to supplant the US as the leading power in the region and that was plainly not in our interests,” he said.
Turnbull said China ran an “integrated” policy. If another nation offended China “it could expect both criticism and economic consequences”; for example, “ministerial visits would be stopped, trade deals would be frozen or not followed through, Chinese tourism would drop off, foreign businesses in China would be boycotted” — the precise threats being lodged today against the Morrison government.
He concluded that what had changed with China was its “intent”. It resorted to “bullying tactics” and would “demand compliance”. In 2017 Turnbull and Li agreed not to engage in commercial cyber-espionage but Turnbull was unconvinced China would honour this. He dismissed leading Australian business figures saying “they’ll always blame their own government if problems arise” with China while the universities were the same, explicitly criticising University of Sydney vice-chancellor Michael Spence. Turnbull complained “there was little in the way of Australian solidarity” without realising this also reflected on his own leadership.
The crunch decision, however, came after a 2018 process when the government banned Huawei from the 5G network. As a tech-head, Turnbull was all over this. The key figure was chief of the Australian Signals Directorate, Mike Burgess, an expert in cyber security.
Turnbull pressed Burgess “to find a solution that would enable Huawei” to participate. Turnbull’s preference was for Huawei to be in, not out. They canvassed many technical solutions but Burgess kept coming back to his bottom line. Turnbull said: “The unequivocal advice was that the risks couldn’t be mitigated.” That settled the issue; Turnbull had to impose the ban.
Burgess’s written advice from the ASD said: “If a state-sponsored adversary has enduring access to staff, software or hardware deployed into a target telecommunications network, then they only require the intent to act in order to conduct operations within the network.”
Turnbull announced the decision in his last week as prime minister. Australia’s formal ban on China’s companies in 5G networks was the first in the world. And China noticed. It was the subject of Turnbull’s last phone call to Trump, “who was both impressed and a little surprised”.
Yet Turnbull was deeply sensitive to suggestions his own behaviour created problems with Beijing. After China’s fury over his Bennelong by-election remark, “the Australian people stand up” – referring to Mao Zedong’s famous comment about the Chinese people standing up — Turnbull wrote a letter of explanation to Xi personally. It was delivered by Julie Bishop to the Chinese Foreign Minister. This was serious. Turnbull quotes from the letter at length stressing his deep interest in Chinese history and culture.
In summary, Turnbull’s conclusion is he changed his mind on China because China changed. That is essentially correct. He stood up for Australian sovereignty yet he regretted what had happened to ruin the earlier age of optimism. Morrison was a full participant as the Turnbull government was mugged by reality — now Morrison operates from where Turnbull finished.
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