The visit of the Australian Foreign Minister, Penny Wong, to China could pave the way for reducing tensions between both countries, though it would be unrealistic to expect substantial progress in the short run. Any thaw between both countries will require a significant course correction in Xi Jinping’s foreign policy, which so far has been fundamentally different from that of his predecessors.
In recent years, ties between Australia and China have witnessed a deterioration due to several reasons. The downward slope in ties had begun before the outbreak of the COVID-19 pandemic, with allegations of Chinese interference in Australia’s domestic politics. There have also been concerns over Chinese students, with the support of the government, attempting to curb free speech on Australian university campuses. The most crucial factor for the deterioration of the bilateral relationship between Canberra and Beijing was the Australian demand for an inquiry into the origins of the Covid-19 pandemic in 2020.
The deterioration in ties between both countries has taken its toll on bilateral economic relations. After Australia sought an inquiry into the origins of COVID-19, China imposed sanctions on several Australian commodities including coal, barley and Australian wines. After the deterioration of bilateral ties, China also threatened Australia, that there would be repercussions in other areas such as higher education and tourism. Then PM, Scott Morrison had described China’s imposition of sanctions and other threats as ‘economic coercion’. Morrison had said that Australia would not compromise its ‘values’ under any circumstances.
Australia has been heavily dependent upon Chinese students and tourists. In the aftermath of tensions between both countries, Beijing has been discouraging Chinese nationals from visiting Australia and Chinese students from studying at Australian universities.
If one were to look at the higher education sector, for instance, Chinese students accounted for well over 1/3rd of the total international student community in Australia (in 2019, the country’s education sector contributed well over AUD 37.6 billion to the country’s economy). While Australia has been trying to diversify its international student community, it will be tough to do so in the short run.
If one were to look at the tourism sector, Australia received 1.43 million tourists from China in 2019 – these tourists contributed a whopping 12 billion dollars to Australia’s economy. As a result of the dramatic drop in the number of Chinese tourists, although Australia’s tourism sector has recovered somewhat, it is nowhere near 2019 levels. One of the major reasons is the shortfall in Chinese tourists.
The Anthony Albanese-led Labour Administration, which is currently in power in Australia, has broadly adopted a similar approach vis-à-vis China, as the previous dispensation. Australia has continued to play a pro-active role in the US-led QUAD (which also includes India and Japan) under the Albanese administration. Australia has also tried to reduce its dependence upon China and has been looking at alternate markets for its exports. Last month, Australian Parliament gave its approval to a Free Trade Agreement (FTA) with India and is also looking to attract students from other countries.
Yet, there is a growing realization in Australia that a sudden shift is not possible and manageable relations with China are essential.
Like leaders from many other countries – including US President Joe Biden – Australian Prime Minister Anthony Albanese met with Chinese President Xi Jinping on the sidelines of the G20 meeting at Bali, last month, and put forward his concerns with regard to trade issues as well as the detention of an Australian journalist and writer. The Chinese President on his part acknowledged that the relationship had run into difficulties, but it was in the interest of both countries to address issues.
In an important development, Australian Foreign Minister Penny Wong landed in Beijing on Tuesday, December 20, 2022 – for a two-day visit. Her visit coincided with the fiftieth anniversary of Australia-China relations. This is the first visit by an Australian Foreign Minister to China ever since 2018. Wong while being cautiously optimistic remarked: “The mark of success is the dialogue itself; we obviously have a lot of issues to work through and dialogue is the prerequisite for working through them”.
The Australian Foreign Minister was realistic with regard to the future trajectory of the relationship. Said Wong before her talks with Wang Yi, “The ice thaws but slowly”. Wang Yi, on his part, acknowledged the strains between both countries in recent years but also said that there was immense scope for economic relations between both countries given the complementarities. Wang Yi also said that Australia and China had “no historical grievance or fundamental conflict of interests”. The Australian Foreign Minister also called for ‘guardrails’ to ensure that tensions between the United States and China do not escalate.
Like the US, Canada, the UK and many other countries, Australia has had close economic ties with China also attracting a large number of international students. As discussed earlier, the relationship has deteriorated significantly in recent times. The meeting between Albanese and Xi and the visit of the Australian Foreign Minister to China could pave the way for reducing tensions, though it would be unrealistic to expect a sudden improvement in relations. A lot of analysts would argue that economic challenges posed by the COVID-19 pandemic could force some sort of course correction in China’s foreign policy, which had witnessed a significant shift under Xi Jinping – becoming far more assertive.
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