Australia should adhere to independent China policy to bolster trade

Foreign Minister Wang Yi's visit to New Zealand and Australia from Sunday to Thursday indicates an improvement in political mutual trust between China and the two countries, especially between China and Australia.

Sino-Australian relations have undergone several recalibrations in recent years since former Australian prime minister Scott Morrison took office in 2018. Due to the Morrison government's anti-China policy, Sino-Australian relations hit rock bottom, with bilateral economic and trade ties suffering a major setback. Bilateral relations took a turn for the better only after Anthony Albanese became Australian prime minister in 2022, particularly after the new government expressed its willingness to improve Sino-Australian relations and vowed to settle the trade issues through talks.

Over the past year, Australian officials, including the prime minister and the foreign minister, have engaged in pragmatic diplomacy, sticking to the principles of mutual respect and win-win cooperation, and respecting China's core interests. Such efforts eased the tensions and guided bilateral ties toward normalization, facilitating the resumption of economic and trade cooperation.

While bilateral trade is returning to normal, and Chinese investment in Australia has been gradually recovering, some trade issues remain to be resolved, including the issue of extra tariffs on Australian wine. But given the risks faced by the global supply chains and the world economy, the sooner the two sides resolve their disputes, the sooner people on the two sides will benefit.

Nevertheless, whether all the trade issues can be resolved depends mainly on Australia's attitude and actions. First, Canberra should treat Chinese enterprises' investment in Australia fairly. This is very important, because the United States has been using national security to view economic issues and has been strictly scrutinizing the activities of Chinese companies. And to counter China, the US has roped in the rest of the Western countries, including Australia, in its anti-China campaigns.

As a result, the normal business activities of Chinese enterprises in Australia, such as mergers and acquisitions, have faced excessive scrutiny in the name of national security, which has dampened the Chinese enterprises' enthusiasm to invest in Australia and impeded the development of Sino-Australian trade. As such, whether Australia can create a fair, transparent and predictable business environment and whether the legitimate interests of Chinese companies in Australia can be protected have become major concerns for the Chinese government.

Second, Australia needs to base its China policy on its own national interests, without allowing the US to hold Sino-Australian trade relations hostage, in order to fulfill its narrow political goals. Since China is Australia's largest trading partner, and the two countries have a highly complementary economic structure, deeper bilateral trade can bring more tangible benefits to the people on both sides. So despite being an ally of the US, Australia needs to distinguish between its own interests and those of the US. By confusing US-Australia alliance interests as its own national interests, Canberra stands to lose the chance of benefitting from growing China-Australia trade and people-to-people exchanges.

And third, Australia should follow an independent foreign policy. The Russia-Ukraine and Israel-Palestine conflicts have widened the rifts in the international community, giving rise to confrontations and triggering an arms race.

Only by deepening cooperation and avoiding confrontation can differences be resolved and misunderstandings cleared. The development of China-Australia relations over the past 50 years show countries benefit from win-win cooperation, not confrontation. In this regard, the negative effects of the Morrison government's anti-China policy should serve as a reminder to Australia that sticking to a stable China policy and strengthening trade relations are beneficial to Canberra.

Also, China-Australia economic and trade cooperation lags far behind that between China and New Zealand. For example, in 2016, China and New Zealand started talks on upgrading their free trade agreement and signed the Upgrade Protocol in 2021. The upgraded FTA not only promoted the liberalization of bilateral trade and investment but also bolstered the China-New Zealand comprehensive strategic partnership. And during Wang's visit to New Zealand, the two sides pledged to further deepen economic and trade cooperation.

On the other hand, Beijing and Canberra agreed to hold talks to upgrade their FTA in 2017, but the process was stalled due to the Morrison government's anti-China policy. With the emergence of new technologies and new industries, and the rapid growth of the digital economy, China and Australia need to take measures to unleash the full potential of their cooperation.

The two sides, for instance, can deepen cooperation in the fight against climate change, and secure new energy industry chains. Australia can also play a role in China joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, whose membership China has applied for.

Moreover, this year marks the 10th anniversary of the China-Australia comprehensive strategic partnership, thus this is the right time for the two sides to write a new chapter in bilateral relations. With geopolitical competitions, regional conflicts and lack of trust among countries intensifying, Wang's visit to Australia sends a message that Beijing and Canberra are willing to resolve their differences through talks and seek common ground to jointly contribute to regional peace and development.

The author is a research fellow at the Center for Australia, New Zealand and South Pacific Studies, Chinese Academy of Social Sciences.

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