Why Canberra must reset its relationship with China

When Gough Whitlam’s delegation arrived in Beijing just before midnight on July 3, 1971, it was the high point in a journey of “political adventure,” says Stephen FitzGerald.

He was one of seven members of the opposition delegation and would be appointed Australia’s first ambassador to China after diplomatic relations were re-established on December 21, 1972.

Few people understand China better than FitzGerald, who has worked as a diplomat, academic and business adviser. Ahead of the next federal election, he despairs that neither the Coalition nor Labor has articulated a detailed, reasoned and creative policy for managing relations with China, especially given our economy largely depends on it.

“I think we are quite grossly neglectful of the relationship,” he says in an interview for this column. “You can look at the surface and say there is trade, tourism and renewed ministerial contact. But for years I have argued that you have to put much more into the relationship than we have been doing. China is a huge power which exerts extraordinary influence on us and our part of the world simply by its size and economic weight, and we have to respond to that by putting a lot more time and resources into building a closer relationship at all levels — political, diplomatic, economic and cultural.”

While acknowledging the Australia-China relationship “is in much better shape than it was” a year or so ago when ministers could not even get meetings with their counterparts in China, it has not fully recovered.

FitzGerald says Australia-China relations need to be given a higher priority at a time of economic and political disruption in the Asia-Pacific region.

FitzGerald has called for a reorientation of Australia’s foreign policy and the specific focus given to China, the US and the Asia-Pacific. He says Australia, not the US, is “living in a Chinese world” and we must engage on our terms and broader interests.

While Australia does not share the values of the ruling political order under Xi Jinping, we must deepen engagement with China and the region.

This is a challenging time for policymakers. China is undergoing its most significant transformation in the post-Maoist era.

It has become more authoritarian at home and more ambitious abroad. Xi has cracked down on dissent and the “reform and opening up” agenda has somewhat stalled. Externally, China’s economic, political and military influence grows exponentially. This makes engagement with China, while mindful of the risks, only more and not less important.

Australia’s intelligence chiefs have warned about Chinese interference in Australia’s political process. There have been claims of subversive activity by agents of the Chinese Communist Party in Australia. When Parliament House was recently hacked, suspicion immediately fell on China. It is not surprising that Chinese telco Huawei has been prohibited from involvement in the 5G network rollout, a move which may prompt retaliation against Australian companies.

While FitzGerald says Australia must guard against foreign cyber terrorism, excessive influence peddling and possible corruption of politicians and officials, he also says there has been a degree of alarmism and paranoia about China, and a misunderstanding of how governments ­legitimately seek to influence the political process.

“You have to be vigilant when lines are crossed,” he says.

“Frankly, most governments do it within their capacity. It is just that the Chinese have a lot of capacity. You just have to be very careful about what is a legitimate attempt to influence the way parliaments, individual MPs and parties think about issues, and what is not legitimate.

“Australia has its own spies overseas and to expect that China or other countries do not have spies is unrealistic. The paranoia has subsided a bit but at its height it was very damaging for our relationship with China and many Chinese Australians felt extremely uncomfortable during that period at the indiscriminate suggestion they could not be trusted.”

But FitzGerald also sounds a warning about Australia’s security and intelligence agencies, which he says still operate too much in the shadows and need greater ­accountability, transparency and oversight.

“We really do need to be very strong on our freedoms as democratic society,” he says. “The security agencies have grown in size and influence within the bureaucracy but the oversight has not grown accordingly with this. The US, for example, has more provisions and mechanisms for the Congress to keep agencies accountable than we have in Australia.”

British historian Niall Ferguson last week said that in any conflict between the US and China, Australia will choose its security over its economy. This is a view shared by former treasurer Peter Costello.

This could be costly. China’s demand for Australia’s resource exports is offsetting the slowdown in the economy even though China’s new import controls could result in a decline in trade.

The Australia-China relationship is at a watershed and its future form is uncertain. Later this month, the China Matters think tank will launch the next-to-final draft of Australia’s New China Narrative, which could be a useful starting point for developing a more comprehensive, coherent and constructive policy towards China. FitzGerald, who is on the board of China Matters, hopes so.

“When assessing the Australia-China relationship today, we must accept that whatever narrative we have does not really serve our interests,” FitzGerald says. “We have to accept the reality that we cannot change China’s foreign policy. We have to think independently about the relationship, be less reactive, and approach it with more initiative and imagination.”