Turnbull resets China ties in positive UNSW speech

Donald Trump has helped the PM achieve a promising reset for our relationship with Beijing. But keep a lid on the celebrations.

Malcolm Turnbull with China's President Xi Jinping at the Hangzhou G20 summit in 2016. Picture: AP

Donald Trump has helped Malcolm Turnbull achieve a promising reset for Canberra in its relationship with Beijing. But keep a lid on the celebrations, for in the next month or two the Turnbull government will rule on the future of the next-generation 5G mobile phone network and there is every chance Chinese giant Huawei will be excluded from participation on national security grounds.

That could well be the occasion for a new round of troubles with Beijing. In a publicly low key but acutely important week for Australia’s complex geostrategic positioning, the Turnbull government also missed a real opportunity to make a statement about the importance of India.

The Prime Minister achieved what looks like at least a modest but important turnaround in the recently choppy diplomatic relationship with Beijing through a speech at the University of NSW mainly concerned with Chinese students at our universities.

It was a good and important speech. Oddly enough, this is not really because its message or the quality of its prose was particularly remarkable. Rather, it was a deliberate act of Australian public and international diplomacy with a specific diplomatic goal in sight.

Beijing has been unhappy with Canberra lately. It doesn’t like the foreign interference legislation, which was justified by reference to Chinese cases; it doesn’t like Canberra’s criticisms of its actions in the South China Sea; it doesn’t like the public debate around the security challenges that Beijing’s new assertiveness in the region brings about; it doesn’t like the fact Canberra has not formally signed on to its Belt and Road Initiative while we have signed up to a regional infrastructure initiative with the US and Japan; and it generally doesn’t like the tone in which it and its allies and agents are talked about in the Australian public debate.

All of this has led to several very public signals of Beijing’s displeasure. Foreign Minister Julie Bishop hasn’t been to China for two years. Some Australian ­exports, especially wine, encountered sudden regulatory difficulties getting into the Chinese market; there were frequent fairly furious denunciations of Australia in the jingoistic end of the Chinese press; Trade Minister Steven Ciobo was denied an appointment with a Chinese cabinet minister during a brief visit there.

Bishop also has seemed imprisoned in a certain Groundhog Day ritual with her Chinese counterpart, Wang Yi. The two foreign ministers would meet on the sidelines of various regional organisations. Bishop would emerge to describe a warm and productive meeting. Wang would emerge to say Australia had to take concrete actions to improve relations with China.

Most worrying of all for our university sector, Chinese authorities had issued completely spurious warnings to their students that Australia might not be a safe place for them to study.

Turnbull’s speech was attended by Beijing’s Canberra ambassador and Sydney consul-general. The Chinese Foreign Ministry reacted positively.

What exactly did Turnbull say to produce such uncharacteristic warmth? He praised the presence of Chinese students in Australia and research collaboration between universities in both countries. He put the overall relationship in a positive light: “We continue to welcome students, tourists, researchers and investors from China.”

He said China and Australia prospered most when they were open to the world. It would be wrong, he said, to think “that the United States or its allies would or should seek to contain China”.

He quoted Xi Jinping on the rights of small nations and the international rule of law. And, he said, “We look forward to working with China on Belt and Road Initiative projects where, assessing them on their merits, we conclude they’re consistent with our objectives, standards and priorities.”

This sentence itself is immensely interesting. Quite deliberately, Turnbull did not change Australian policy, which is that Canberra looks at any proposed investment from China, or anywhere else, on a case-by-case basis, generally welcoming foreign investment but subjecting each proposal to rigorous evaluation. But Canberra will not sign up in principle to the BRI as an institution. Doing so is unnecessary and involves some measure of endorsement of Beijing’s strategic objectives, which are often crudely advanced in the BRI.

Therefore Turnbull restated a position that the Chinese don’t like, but put it in an entirely positive way and got good marks from Beijing for it. This speech was as significant for the things it did not say. It did not back away one millimetre from any of the tough national security positions Beijing doesn’t like. So why did official Beijing respond so positively?

First, Turnbull is absolutely right to make a positive speech, a series of positive speeches, about the Australia-China relationship. He is responsible for the whole relationship, not just its security dimension. The government and the opposition both want a co-operative, productive relationship with China, but not at the expense of our core national interests.

It is a pattern from Beijing that it periodically puts Australia, or some other nation, in the doghouse as punishment for some disagreement, then at some point decides the punishment period is over. But there are a couple of other factors at work. The first is that Beijing is having a pretty big trade brawl with the Trump administration. Therefore, this is probably not the time for needless disputes with other nations, especially well-regarded middle powers such as Australia.

When he attended the G20 meeting in Argentina recently, Treasurer Scott Morrison made some important statements to the effect that Trump had a case in ­arguing the World Trade Organisation was not answering Washington’s legitimate complaints.

All around the world, policymakers routinely but privately acknowledge that Beijing does not play by the spirit of the WTO rules. It restricts foreign goods from coming through non-tariff barrier. It massively restricts the nature of foreign investment. And it wantonly steals vast amounts of intellectual property.

It was more or less inevitable that a US president one day would tackle this problem, which presidents have been ineffectively complaining about for decades. Those who think Trump is the devil should understand that if Hillary Clinton had become president, she too, on both trade and strategic matters, was planning to be far more assertive with Beijing than the Obama administration.

The fact Trump has the Chinese leadership off balance and on the defensive tends to limit Beijing’s adventurism in the region, including in its relations with Australia. Trump is a mixed grill, with many crazy tweets and statements and counter-productive actions mixed in with good actions, even courageous ones, that benefit Australia. Serious strategic thinkers are coming to this conclusion. Alexander Downer, one of our most successful foreign ministers, this week published an opinion piece: “Trump is better for Australia than Obama ever was”.

The Australian Strategic Policy Institute’s acute and consequential strategic analyst Peter Jennings, in a piece published last month, commented: “Trump has strengthened America’s Asian alliances … (He has) given China pause in its headlong opportunistic assault on that frail and quaking creature, the international rule of law.”

It is fair to note that Trump’s performance in Singapore with North Korea’s Kim Jong-un, then at the NATO summit and in Helsinki with Russia’s Vladimir Putin, caused Jennings a lot of heartache and led him to ask, in The Australian, whether Canberra needed much greater resources for defence in case the US reduced its commitment to Asia, an eventuality he thinks is low probability but potentially of big consequence.

This does not imply inconsistency in Jennings’s analysis, just that he is working to integrate the paradox of Trump — that he does good and necessary things that no one else would have done, but also does and says foolish things and often lacks follow-through.

There has been criticism of Turnbull in some foreign policy circles and on the Left for not distancing us more from Trump. This is mistaken. The Turnbull government has negotiated the Trump era so far very effectively, with no loss of any Australian interest and a continued focus on what matters to us most.

There is a reasonable criticism of some members of the government that their rhetoric has been ragged on China at times, but that is unlikely to be the real cause of our difficulties with Beijing. These arise because of real disagreements between Canberra and Beijing, and that will continue.

The Australian National University’s Rory Medcalf, another key participant in the strategic debate, argues that Turnbull’s speech this week marks a kind of new normal for Australia. With all the foreign interference legislation, all the new arrangements for scrutinising proposed foreign investment in critical infrastructure, with actions to prevent Chinese firms from effectively controlling critical South Pacific communications networks, and with our commitment to expand our defence capabilities, Canberra is working pretty hard to create a new level of national resilience.

Medcalf is too polite to say it explicitly, but each of these moves has been overwhelmingly in response to concerns about China. The government has no desire to gratuitously provoke Beijing but it is necessary in a democracy such as Australia that these issues be publicly debated. The government saw a series of real problems and addressed them, but it needed democratic consent, it had to consult the community and bring the electorate along.

Beijing in effect objected to Australia holding this debate. It is a tribute to Australian democracy and statecraft that we held the debate, took the necessary measures yet did everything reasonable to keep relations with Beijing on an even keel, recognising the huge economic relationship and the vastly beneficial people-to-people relationship we have with China.

Because these debates are now settled and Beijing was unsuccessful in derailing them, Canberra and Beijing can move on more easily on the basis of a new status quo. But alas, serenity and calm are not the natural state of this relationship. In the next month or two the government will decide on the nature of the 5G mobile phone network. This is a critically important piece of national infrastructure. The Australian Signals Directorate and ASIO have both effectively concluded their deliberations. The matter will need to go through a full national security committee of cabinet process.

It may be decided at one NSC meeting or ministers may have questions that require a couple of sessions. Of course, the decision involves commercial and diplomatic considerations, but security will be the key. No decision has yet been made but it is very likely that Chinese telco giant Huawei will be prevented from participating in critical aspects of 5G.

Part of the complexity of the decision is a desire by Canberra not to compromise Huawei’s other activities in Australia.

Assuming that is the way the decision goes, it may be that Beijing’s reaction, though hostile, will be brief. Unlike foreign interference legislation, it won’t drag on for months and with a lengthy public debate. Labor will surely support the government in following the advice of the security agencies. This is pretty much what happened when the former Labor government decided to keep ­Huawei out of the NBN.

On the other hand, depending on other external factors, Beijing may make a fuss.

This week, the government missed an obvious trick in our Asian diplomacy. Most strategic analysts think that apart from keeping the US involved and managing Beijing, Canberra needs to do two other things: make a bigger effort on defence and enhance strategic co-operation with other key Asian nations such as Japan, India, Indonesia, and old friends of Australia like Singapore and Malaysia.

This week, Australia’s most formidable diplomatic intellect, Peter Varghese, presented his report to the Turnbull government on a future economic strategy for Australia regarding India. The potential for Australia with India is absolutely enormous, much greater than it seemed to be with China in the mid-1980s when we were making a massive diplomatic effort there.

But our approach to India is always a dollar short and a day late. Given some of our obvious mistakes with India in the past — refusing to export uranium, pulling out of the Quadrilateral Security Dialogue (which we have now re-entered) to appease China — there is considerable scepticism in New Delhi about our seriousness.

The Varghese report is now open for public consultation and the government will take its time to respond to it in detail. But the public release was carried out with almost funereal silence.

Without responding in substance to Varghese’s many and fascinating recommendations, the government could have demonstrated its seriousness about India, and led some public debate, by making the report’s publication a big deal.

Overall, this was a pretty good, pretty deft week for Australian strategic positioning — but the Indian dimension, as ever, could have been considerably better.