The Abbott Government and Australia-China Relations

Prior to their September 2013 election victory, China did not form a significant part of Coalition foreign policy. Then opposition leader Tony Abbott’s major statement on the Australia-China relationship was a speech in Beijing in July 2012 expressing hope for Chinese political liberalisation and reaffirming opposition towards foreign investment [topic link page] in Australia by Chinese State-Owned Enterprises (SOEs). During the election campaign there was virtually no mention of China by Abbott, apart from assuring voters that Australia was ‘open for business’ from any country, including China, as long as the investment was in the ‘national interest’.

Following the Coalition’s election victory, the Australia-China relationship experienced a period of turbulence. The Coalition foreign affairs policy released in early September expressed a desire to upgrade relations with Taiwan [topic link page: Australia and Australians in Greater China] by restoring annual ministerial-level visits, with Abbott expressing enthusiasm for commencing Australia–Taiwan Free Trade Agreement negotiations.

On 4 October 2013, an Australia–Japan–USA trilateral strategic dialogue produced a joint statement opposing ‘coercive or unilateral actions’ altering the status quo in the East China Sea, eliciting a warning from China that alliances should not be used as an ‘excuse to interfere in territorial disputes’. Japan and China dispute the sovereignty of the Senkaku/Diaoyu Islands in this sea but Japan exercises de facto control.

Following his first meeting with Chinese President Xi Jinping at the Bali APEC summit on 7 October 2013, Abbott proclaimed a desire to finalise the long-delayed China–Australia Free Trade Agreement [topic link page] (CHAFTA) within twelve months. However, one week later Abbott reaffirmed a pre-election promise to reduce the Foreign Investment Review Board (FIRB) threshold from A$244 million to A$15 million for agricultural land and A$53 million for agribusiness — a move often interpreted as being contrary to the interests of Chinese investors.

On 9 October, Abbott met with Japanese Prime Minister Shinzō Abe at the East Asia Summit in Brunei. He invited Abe to address a joint sitting of the Australian parliament and, departing from standard diplomatic language, called Japan Australia’s ‘closest friend in Asia’. In Tokyo on 15 October, Foreign Minister Julie Bishop reiterated that Japan was Australia’s ‘best friend in Asia’ and endorsed Japan’s military modernisation program — which China vigorously opposes — by welcoming ‘the direction that the Abe government has taken in terms of having a more normal defence posture and being able to take a constructive role in regional and global security’.

On 29 October, despite talk by the minister in charge of the portfolio about a possible review of Huawei’s [topic link page] previous ban from participating in the National Broadband Network, Abbott upheld the ban on national security grounds after receiving advice from the Australian Security Intelligence Organisation. The decision was criticised by the Chinese Ministry of Foreign Affairs (MFA) and raised by China during FTA negotiations.

In late October, classified US documents leaked by Edward Snowdon implicated the Australian Embassy in Beijing in US surveillance and intelligence operations. On 1 November, the MFA requested clarification from Australia regarding the claims and urged diplomatic missions in China to ‘strictly abide by international treaties’. The Abbott government made no public response, maintaining its policy of not commenting on intelligence matters.

On 23 November, China declared an Air Defence Identification Zone (ADIZ) in the East China Sea covering disputed territories including the Diaoyu/Senkaku Islands. On 25 November, the Department of Foreign Affairs and Trade (DFAT) officially summoned the Chinese ambassador in Australia to demand an explanation. Australia was the only country to take such a measure. On 26 November, Foreign Minister Bishop released a statement opposing the ADIZ, arguing that the ADIZ was a ‘coercive [and] unilateral [action] designed to change the status quo in the East China Sea’.

China rebuked Australia’s response to the ADIZ as ‘irresponsible’ and ‘completely wrong’. The MFA stated that Australia should ‘correct its mistakes so as to avoid hurting the co-operative relationship between China and Australia’. But Abbott refused to back down, stressing strategic ties with Japan and the USA and dismissing any impact upon the Australia–China relationship, insisting that ‘China trades with us because it is in China’s interest to trade with us’ and Australia will ‘stand up for its values’.

During the annual foreign minister’s bilateral strategic dialogue in Beijing on 6 December, Chinese Foreign Minister Wang Yi 王毅 broke with diplomatic protocol and used his opening remarks to publicly criticise Bishop for Australia’s reaction to the ADIZ while the media were still present. The incident was covered widely and positively in the Chinese state media, complete with a photograph of an ashen-faced Wang shaking hands with a beaming Bishop. Chinese netizens expressed admiration for Wang’s hard-line approach and questioned ‘what does the ADIZ have to do with Australia?’

In late December, Abbott was criticised by China watchers for not speaking out against Abe’s visit to the controversial Yasukuni Shrine, which honours Japanese military figures, including some convicted of war crimes against Chinese during Japan’s occupation of large parts of China from 1931 to 1945.

In April 2014, Abbott embarked on a major overseas trip encompassing Japan, South Korea and China. Both leading up to and during the visit, Abbott sought to avoid political controversy by focusing on ‘economic diplomacy’ and stressing the importance of ‘peace and understanding based on international law and mutual respect’ by reasserting that Australia was ‘open for business’ and by moving towards concluding bilateral FTAs with all three countries. He also said it was ‘hard to overstate the importance and strength of Australia’s relationship with China’. Abbott brought with him to China 600 leaders of Australian politics, business and the bureaucracy, calling it ‘Team Australia’ and ‘one of the most important delegations ever to leave Australia’.

Given the political furore over the Abbott administration’s handling of China–Japan relations, some academics and journalists were pessimistic about the prospects of the delegation. They predicted that the trade mission would ‘get buried by politics’ due to Chinese displeasure at Australia ‘siding with Japan’. However, after the event, most observers judged Abbott’s ‘first big test’ on the international scene to be a resounding success, calling Abbott ‘pitch-perfect on Asia’ and showing ‘skills beyond his years’ in ‘the strongest political week of his prime ministership’.

In China, Abbott articulated Australia’s wish to ‘be a true friend’ and ‘help build the Asian Century’. He reversed his previous opinion on Chinese FDI by announcing significant potential loosening of controls on both Chinese state and private investment in Australia as part of accelerated FTA negotiations. Positive stories highlighting Australia’s role in the search for the missing MH370 Malaysian Airlines plane were front-page news in China. President Xi accepted an invitation extended by Abbott to address both houses of the Australian parliament during his visit to Australia for the G20 leaders summit in November 2014, also when Abbott planned to sign CHAFTA.

In July 2014, Japanese Prime Minister Abe made a state visit to Australia and delivered a speech to the Australian parliament that was widely interpreted as urging bilateral security cooperation to keep regional seas and skies ‘open and free’ against threats from China. Thanking Abe, Abbott remarked that Australia ‘admired the skill and the sense of honour’ of Japanese troops who fought against Australia and other Allied powers in World War Two. China’s state news agency Xinhua slammed Abbott’s remarks as ‘appalling’ in light of the atrocities perpetrated by Japanese wartime authorities occupying China. Advanced political and security ties between the Abbott and Abe governments have been described as a ‘quasi-alliance’ by Japanese officials and caused concern in China, especially because they are facilitating consistent US-Japan-Australia trilateral pronouncements against China changing the territorial status quo in regional maritime disputes. But Abbott has not called Japan Australia’s ‘best friend’ in the region since December 2013.

In October 2014, the Abbott government baulked at China’s invitation for Australia to become a founding member of its Asian Infrastructure Investment Bank [topic link page] (AIIB) after Abbott was personally urged not to join the bank for ‘strategic reasons’ by US President Barack Obama and Secretary of State John Kerry. This elicited loud disapproval from the Australian business and policy communities. Australia eventually announced it would join the AIIB as a prospective founding member in March 2015.

November 2014 was a busy month in the Australia-China relationship. Abbott travelled to Beijing for the APEC leaders summit and Xi was in Australia for six days for the G20 summit and a three-day state visit. Xi delivered an ‘important speech’ to the Australian parliament in which he reassured Australia that while China was ‘like the big guy in the crowd [the region]’, it ultimately wanted peace and urged Australia to participate in new Chinese regional economic initiatives, including the AIIB and the ‘One Belt, One Road’ framework to improve infrastructure interconnectivity between China and Central Asia, Europe and South-East Asia. During Xi’s visit, Australia and China upgraded bilateral relations to a ‘comprehensive strategic partnership’ and concluded CHAFTA. The Australian media and polity lauded Xi’s visit as a great success and a landmark development in Australia-China relations, especially in contrast with the perceived negativity of President Obama’s simultaneous visit, with specific approval directed at Xi’s affable demeanour and visit to Tasmania — Xi has now visited each of Australia’s states and territories.

In May 2015, a senior Pentagon official told a congressional hearing that the US would be ‘placing’ heavy B-1 bombers in Australia in response to rising Chinese assertiveness in progressing its territorial claims in the South China Sea, and in the context of continually deepening US-Australia military cooperation under a reinvigorated US ‘Pivot to Asia’ [topic link page]. Abbott and the Pentagon insisted that the official ‘misspoke’ but media reports claim that Australian defence planning documents prove that basing US B-1 bombers in Australia is ‘all but inevitable’. The MFA criticised the plan obliquely by saying that ‘cooperation between countries should not harm the interest of the third country’ and the state-affiliated Chinese newspaper Global Times said that hosting B-1 bombers crossed a ‘red line’ and Australia would ‘pay a dear price’. Many Australian analysts worry about the effect of intensifying US-China rivalry on Australia’s security.

Abbott, like Kevin Rudd [topic link page] and Julia Gillard [topic link page] before him, is adamant that Australia ‘does not have to choose’ between its security alliance with the US and its economic relationship with China. The Australian government’s approach to China — across the Rudd, Gillard and Abbott governments — has been described as being that of ‘engage and hedge’. In other words, Australia should engage China economically and encourage its embedment in the international system, but also hedge against China’s military rise by deepening security ties with the US and robustly opposing Chinese challenges to the US-led regional order. In April 2015, the Australian media revealed that in November 2014 Abbott had privately told German leader Angela Merkel that Australia’s policy towards China is driven by ‘fear and greed’ — sentiments that tally well with the unofficial strategy of ‘engage and hedge’.

Regardless, the Australian government has no official foreign policy framework, let alone one focused on China, and some observers see ‘engage and hedge’ as pushing contradictory outlooks of the Asia-Pacific future that will someday require resolution.


July 2012

December 2012

August 2013

September 2013

October 2013

November 2013

December 2013

January 2014

February 2014

March 2014

April 2014

June 2014

July 2014

August 2014

September 2014

October 2014

November 2014

December 2014

January 2015

February 2015

March 2015

April 2015

May 2015

June 2015

July 2015