China return to business as usual must include caution

A resumption of high-level ministerial contact with China after years of frosty relations is to be welcomed. But the Albanese government must be careful not to overstate the extent of our changed relations or to put the quest for commercial success ahead of our bigger national or security interests.

Writing in The Australian on Friday, Jim Chalmers was quick to note he was the first Australian treasurer in seven years to meet with Chinese counterparts in China. He said the Albanese government had made substantial progress in re-establishing dialogue with our largest trading partner.

Under the Albanese government, trade impediments imposed by China have been reduced from more than $20bn worth of Australian exports to less than $1bn, and the Chinese market is again open to Australian coal, cotton, copper ores and concentrates, timber logs, oaten hay, barley and wine.

Total two-way trade reached a record $327bn in 2023, more than double what it was when the China-Australia Free Trade Agreement commenced in 2015.

At the same time, China has shown itself to be capable of acting against Australia’s broader national interest in its conduct towards neighbours and our own defence forces operating in the South China Sea.

Dr Chalmers’ visit comes a week after an Australian Air Force plane was described as an “enemy” in a documentary aired on China’s national broadcaster, CCTV. At last week’s Quad leaders’ dialogue summit, Joe Biden was caught on a hot mic warning that China “continued to behave aggressively, testing all of us across the region”.

As Israel has demonstrated by its successful attack on Hezbollah via exploding pagers, there is a need for even greater caution in global supply lines. This includes the purchase of home battery systems and electric vehicles, an area in which China has a global dominance. As foreign editor Greg Sheridan has said, the Israeli strike on Hezbollah was potentially a revolutionary and pivotal moment because it showed how connectivity also produces vulnerability.

It is instructive that concern about the sale of Chinese electric vehicles, which have been banned in the United States, was the main concern of China’s ambassador, Xiao Qian, when he spoke in Sydney on Thursday to mark the 75th anniversary of the People’s Republic of China.

Dr Chalmers acknowledged it would be naive to pretend all was smooth sailing in the Australia-China relationship. But he said constructive engagement does not mean there is no disagreement. Instead, it means finding common ground while maintaining the integrity of who we are as a nation and preserving our national interest.

Reflecting on the CCP anniversary milestone, party mouthpiece the Global Times said over this period China had transformed from “a poor and backward country into a moderately prosperous society in all respects”. The headline said “75 years on, China, a staunch force for peace and progress, defies the discourse of ‘a strong nation must be hegemonic’ ”.

China’s words do not always reflect its deeds. Speaking at the Yomiuri International Economic Security Symposium in Tokyo on Thursday, former prime minister Scott Morrison defended his government’s “strident position” towards Xi Jinping’s People’s Republic of China.

He said he believed it was necessary to counter the PRC’s deliberate strategy to test Australia’s will and to split us off from our allies and partners. He said it was necessary to push back against a country that was pretending to share values and interests while seeking to bully and coerce us, while it undermined the very rules and norms that afforded us our freedom, and got us where we are today.

Mr Morrison says we can peacefully coexist, but only with the right safeguards in place. We must do so with our eyes wide open and with the good sense to put a sufficient deterrent in place to counterbalance the growing power and influence of autocracies.

Mr Morrison was among the first global leaders to stand up to China. The lifting of punitive sanctions and restored relations is a sign that China has realised its mistake. And, as Dr Chalmers said in Beijing, the economic situation in China today is deteriorating and this has significant economic consequences for Australia as well. It could also make China’s leadership more unpredictable.

We must welcome the fact that China has restarted high-level talks but be prepared for whatever actions its communist leaders may unilaterally seek to take in the future.

Our national interests must always take precedence over our commercial ambitions.