Handling China ties with care

Australia’s bonds with Beijing are too important to fail the stress test.

Gough and Margaret Whitlam with Deng Xiaoping in 1973.

Australia and China have come a long way together during our 45 years of diplomatic relations — not always in harmony but, when necessary, acknowledging differences and building on the past.

Today, voices are being raised on both sides that we are moving towards some form of irretrievable breakdown as a result of the debate about Chinese influence.

That can’t happen. Too much is at stake. But the relationship is changing irrevocably.

China has become the biggest buyer of many of Australia’s most important products. And Australia is the largest supplier of crucial drivers of China’s economy, including iron ore and liquefied natural gas. Trade has soared 1372 times in those 45 years.

Many links at the personal level are now inextricable.

But the state-to-state relationship is something else. That’s unlikely to remain the same — in part because the intensity of the engagement has brought new pressures to bear. Both sides are changing and expectations are consequently being adjusted.

This probably was always going to happen at some stage given the gulf in political cultures between a liberal democracy leaning hopefully towards Asia and a centralising but globally ambitious communist state.

Malcolm Turnbull and Xi Jinping at the G20 summit this year. Picture: Lyndon Mechielsen

The US withdrawal under President Donald Trump — not only from the Trans-Pacific Partnership, a crucial pillar of economic liberalism, but also from a coherent overall vision for this region — has ratcheted up anxieties on the Australian side and a commensurate sense of opportunity on China’s side.

The areas of institutional difference between Australia and China have come under rapid pressure in the face of such change and such debate — pressure highlighted in the Turnbull government’s new foreign affairs white paper.

This underlines that China’s most-sought shift in Australian foreign policy — away from the US — is a non-starter, although some optimists in Beijing hold out hopes that a Labor government may start taking such steps.

It stresses that Australia will find its security and prosperity in the region — not from the region, which critics of coalition governments used to claim was the real intent — and that it believes the US will remain committed here.

The paper acknowledges that “China is challenging America’s position” and that the power balance is changing. It also states that Australia’s values comprise “a critical component” of international engagement — values that, Beijing well understands, it shares only partially.

As the regional and global order is being tested, the paper says, Australia is committed to pursuing issues of “governance” — the English word also used by President Xi Jinping as the title of his series of books outlining his drive to lead Chinese and global governance in a new direction.

Kevin Rudd with former premier Wen Jiabao in Beijing.

At the same time, though, the white paper pledges that “Australia will strengthen relations with China”, supporting a greater role for the country in global organisations and stressing that “our societies are increasingly connected”.

Even when the smiles seem frozen at the governmental level, the formalities are being observed — and those business and personal links persist.

Last Thursday, a month after a parallel event in Australia — in Melbourne, involving former prime minister John Howard, Foreign Affairs Minister Julie Bishop, and former Labor counterpart Gareth Evans — a formal celebration of the 45th anniversary was held in high diplomatic style at Diaoyutai, the august State Guest House in Beijing.

The most senior figures on the Chinese side last week were Qiangba Puncog, one of a dozen vice-chairmen of the National People’s Congress, and Cong Peiwu, director-general of the department of North American and Oceanian affairs at the Foreign Ministry.

The corporate rollcall was especially impressive at the Beijing event, including the chairmen of some of China’s biggest businesses including Citic, New Hope, Yankuang (owner of Yancoal), Shenhua and Sinosteel, and the vice-president of Minmetals.

Jan Adams, Australia’s ambassador to China, had led the challenging negotiations that concluded the comprehensive free trade agreement between the countries that came into effect two years ago tomorrow.

Bob Hawke with Deng Xiaoping in 1986.

She was called into the Chinese Foreign Ministry a few days before the 45th celebration to be told of its distaste for the Turnbull government’s China-specific rhetoric surrounding the measures introduced to tackle undue foreign political influence in general.

She pointed out in her speech at Diaoyutai that trade in 1972, when diplomatic relations began, was worth $113 million. Last year it was worth $155 billion. Now, 157,000 young Chinese are studying in Australia, with 1400 exchange arrangements between universities from the two countries.

Under the comprehensive strategic partnership agreed under Julia Gillard, there are more than 40 high-level annual meetings between leaders, many including ministers.

At the end of her remarks Adams made a point of quoting Malcolm Turnbull, who recently said on television: “There are a million Australians of Chinese ancestry — a million. You could not imagine modern Australia, the most successful multicultural society in the world, without them.”

The connections between China and South Korea are no less important to both. The South Korea case is an instructive example, showing how Beijing can decide to turn the economic screws for political or strategic goals, and swiftly and dexterously readjust its tactics when such measures don’t work as hoped.

Beijing confronted Seoul in a much tougher way this year than it has done Canberra so far. It launched a series of unofficial sanctions cutting connections with South Korean cosmetics, K-pop singers, Korean soap operas and other immensely popular cultural exports; dried up Chinese tour groups; and forced Lotte, one of the biggest chaebols — giant conglomerates — to announce at one stage it was selling its investments in China, worth billions of dollars. This was done to pressure South Korea against deploying the US-managed Terminal High Altitude Area Defence anti-ballistic missile system. While introduced to defend South Korea against the North, Beijing feared it could also be used to scan China’s own missile platforms.

Late last week, however, South Korea’s highly popular President Moon Jae-in was accorded a full-on state visit to China.

The rift is being healed. China — finding its own ally, North Korea, almost impossible to deal with — moved to resolve the stand-off, pragmatically accepting the installation of the first THAAD battery, while Seoul has agreed not to introduce more.

The economic sanctions failed to work anyway, with South Korea’s growth accelerating faster than forecast — by 3.6 per cent in the last quarter, up almost a percentage point on a year ago, as it found fresh markets when needed, thanks in part to its 52 free trade agreements.

The China-Australia FTA will serve to tether the central economic relations between the countries, although there may be some fraying around the edges in the immediate future, as happened between China and South Korea.

Malcolm and Tamie Fraser on a visit to the Great Wall of China in 1976.

Senior Australian corporate figures in Beijing are reporting that so far, it has remained business as usual. But the sense of frustration and disappointment is palpable among those most involved in diplomatic and academic China-Australia ties.

These are perceived as a potential pilot by some, as a new, positive form of relationship between China and the West — but others see it more negatively, as a surreptitious attempt to bring Australia closer into China’s orbit.

Chen Hong, director of the Australian Studies Centre at East China Normal University in Shanghai, tells The Australian: “I think the China-Australia relationship is facing an unprecedented challenge. The scare and smear campaign against China and the Chinese community has been going on for almost a year, and damage has already been done to China’s trust and confidence in Australia.

“I am always an optimist, as I am a strong advocate of China-Australia friendship. There has to be a way for us to reach mutual understanding and eradicate misunderstandings. But China did not start all this. Australia needs to take concrete and effective steps.”

He suggests the governments arrange higher-level meetings “to eliminate mutual distrust and reach understanding”.

Senior figures in Beijing have suggested that Canberra might involve in such meetings past Liberal luminaries such as John Howard, Alexander Downer or Peter Costello.

Chen says: “It saddens me to see the year of celebration for the 45th anniversary of our relationship is ending up in this manner. The next year for us should be a year of ­reflection.”

Mark Harrison, senior lecturer in Chinese studies at Tasmania University, reflects in a recent article for the Lowy Institute that China, “a party-state that institutionalises Leninist authoritarianism, a communist vision for modernisation, and a hard nationalism, should have, on the face of it, long presented a challenge to the liberal democratic values that Australia espouses”.

 

Until recently, however, it has not: “Australian political, business and education leaders have produced endless verbiage on the future for Australia in partnership with China over the last 20 years in distinctly anodyne and platitudinous speeches and statements about bridging cultures and promoting diversity, creating partnerships of global competitive advantage, accessing the opportunities of the burgeoning Chinese middle class, and so on.”

But, Harrison, says, such language “excises meaningful and critical engagement with both the immeasurable gifts of Chinese civilisation, and also the nature of the PRC party-state”.

The policy rhetoric has not been about China as a real place, he says, but about how Australia should understand itself and its own national future, with engaging with China as a metaphor, central to the idea of Australia “as a cosmopolitan society casting off the legacy of racism and imperialism, both British and American, to be comfortable in the Chinese world”.

Senator Sam Dastyari’s resignation over links to Chinese donors to Labor’s coffers is a symbolic moment in the breakdown of this complacent and inward-looking approach to China, Harrison says, “showing the People’s Republic party-state as a real and unavoidable part of everything China is, rather than simply a metaphor for Australian economic policy or aspirational cosmopolitanism. The unsayable is now sayable, which is that this is not about us.”

The result, he hopes, may be a previously postponed “full and meaningful engagement with China and the Chinese world”.

Richard Rigby, executive director of the Australia-China Institute at the Australian National University and a former senior diplomat, tells The Australian: “I do think people need to watch their language, but on the Chinese as well as the Australian side. None of the strong positive elements in the relationship are any less cogent than they have been, but there are new issues, including the changing nature of some elements in the Chinese community, that have to be addressed.”

Australia’s tricky domestic political situation is making calm, measured approaches more difficult, he says. “Some media reporting and commentary — not just the press — doesn’t help, and public interventions from official Chinese sources have also added to the shrillness” of the debate.

As happened a decade ago during the Kevin Rudd government, Rigby says, “we are going through another stress test, from which we should emerge in reasonable shape. But it would be nice to feel that the tillers of our twin vessels were in reliable hands.”

When ambassadors made history

It was 45 years ago on Thursday when Alan Renouf and Huang Chen, the ambassadors to France of Australia and the People’s Republic of China, met in the music room of the Australian embassy in Paris.

There they signed a joint communique on behalf of their countries, agreeing to establish formal diplomatic relations — just over midway through China’s cruel Cultural Revolution.

Before that, Australia recognised as its Chinese diplomatic partner the Republic of China, whose government had retreated to Taiwan in 1949 after losing the civil war with the communists.

Earlier, the ambassadors had taken nine hours to finalise the text of the communique. The signing ceremony took 25 minutes.

Eighteen months before, Gough Whitlam as opposition leader had visited China. He made recognising the PRC his top foreign affairs priority. He announced just three days after his election on December 2, 1972, that he had instructed Renouf — whom he soon promoted to head the foreign affairs department — to open negotiations with his Chinese counterpart.

Huang Chen and Alan Renouf sign the agreement in Paris establishing diplomatic relations with China.

Renouf said about the signing: “There was a large amount of good humour, and the atmosphere was good. Both governments were determined to resolve the question as quickly as possible, and decided to match each other’s speed … It was almost like negotiating with the Americans — frank, tough and hard.”

A business delegation was rapidly assembled to follow up the move, led by BHP chairman Ian McLennan and trade minister Jim Cairns. They crossed into the PRC from Hong Kong on May 13, 1973, and were met in Beijing by the first ambassador, Stephen Fitzgerald, who had established the embassy in Room 464 of the starchy, state-run Beijing Hotel. The highlight of the mission, according to most delegates, was meeting Premier Zhou Enlai, Mao Zedong’s loyal lieutenant.