IAS Gyan

Daily News Analysis

Explained: Why Australia-China ties have gone down under

10th October, 2020 International Relations

Changes in Aus-Sino relations:

  • Australia and China’s cordial economic ties, established over the last three decades, have been soured this year over several points of friction.
  • China has been unhappy with Australian becoming more vocal about its handling of Uighur Muslims and the protests in Hong Kong.
  • But it was Canberra’s appeal for an independent global inquiry into the origins and initial response of Covid-19, that really riled up Beijing.
  • Australia’s exposes a latent fear of China’s growing influence in the country’s domestic space, ranging from politics to educational institutions to real estate.
  • China’s rising presence in the Indo-Pacific region despite the pandemic has only added to this distrust.
  • But despite the economic cost, Australia has made one thing clear: it will stand for its “values” and not be “intimidated.”

Economic relations

  • China is Australia’s largest trading partner in terms of both exports and imports.
  • China’s share in Australia’s exports reached a record A$117 billion, or 38 per cent, in 2019, more than any other country.
  • Australian sectors like mining, tourism, education benefit from trade with China.
  • China even imports products such as milk, cheese, wine and meat.
  • The Asian superpower’s investment in the mining and agriculture sector also plays a big part in this.
  • Over the years, it has been increasing its investment in Australian infrastructure and real estate products too.
  • The maximum number of foreign students in Australian universities and tourists also originate from China.
  • So far the Chinese economic aggression over tariffs has been limited to agriculture and food production.
  • The spat has not touched the one industry that contributes heavily to their economic relationship: heavy metals.

Points of friction

Two issues have dominated the deteriorating relationship between the two countries.

  • Australia’s Covid-19 inquiry: In April 2020, Australia’s suggested the start of an inquiry into the origins and the initial handling of the coronavirus. To this, China’s response was that Australia was teaming up with the US to spread “anti-China propaganda”.

In May, Chinese authorities announced imposing an 80 per cent tariff on barley imports coming from Australia.

  • Tension over journalists: The second diplomatic spat began with the detention of Cheng Lei, an Australian news anchor based in Beijing by the Chinese authorities after she was suspected of “criminal activities” that endangered China’s national security.
  • Ideological issues: To the reports of China keeping Uighur Muslims in state-run detention camps surfaced, Australia expressed “deep concern” over the “human rights situation.”
  • “Internal matters”: China imposed the National Security Law in Hong Kong, Australia suspended its extradition treaty with Hong Kong and said the law undermines Hong Kong’s autonomy and suppresses opposition to Mainland China. Australia also decided to extend visas for Hong Kong residents.

A search for ‘like minded’ allies

  • Canberra has started looking for way to wean itself away from this excessive Chinese dependence and is keen to strengthen its ties with more ideologically compatible allies like India, Japan and the United States.
  • It expressed the need to connect with more “like-minded democracies” to counter the Chinese aggression and expansion.

Quadrilateral Initiative

  • At the “Quad” with counterparts from India, United States and Japan, Australian highlighted the need for an “open, resilient and inclusive Indo-Pacific region, that is governed by rules and not power.”
  • Australia also focused on vital sectors of its economy like minerals, for which it is heavily depends on its trade with China.
  • Since its inception in 2007, the Quad has been labelled by analysts as an attempt to counter China’s growing footprint in the Indo-pacific region.
  • India has been involved in a border standoff with China that has now lasted for over five months.
  • Despite several rounds of “disengagement” between the two sides, the conflict has not died out.
  • Similarly, under the Trump administration, US-China ties have been at their worst in decades.