The influence of domestic politics on Australia’s China policy

25 June 2021

For the past five years, the international community has looked to Australia for guidance on how to respond to a rising China. Australia was the first to ban Huawei, has spoken out about human rights abuses in Xinjiang and criticised the rollback of freedoms in Hong Kong. Dependant on the US for security and China for economic prosperity, Australia has been facing the same challenges as many middle powers — how to juggle economic and security interests when your two most important partners are competing against each other.

Australia had been balancing its strategic and economic interests relatively well until 2020. However, last year Australia-China relations reached their lowest point in history. COVID-19, tariffs, ‘fourteen grievances’, and a chaotic Trump presidency put new pressures on the Australian government. These events have left Australia unsure of its China policy, opting for strong statements but few policy changes. While Australia-China relations are unlikely to worsen this year, they are also unlikely to improve.

Australian domestic politics and China

One of the lasting effects of Donald Trump's presidency on politics globally is the normalisation of populist-style reactionary policymaking, as evident in the Australia-China relationship. Since the 2019 election, Scott Morrison has increasingly shifted his China policy to be more reactionary, using relations with China to score points domestically and to be seen as strong globally. In 2018, the Morrison government began the Pacific ‘step up’ which proposed increased Australian aid and engagement in the Pacific in response to growing Chinese influence in the region. The Pacific region is seen by the US as Australia’s area of influence and is key to US influence in the Indo-Pacific. While this initiative is beneficial for both parties, its ultimate goal is to maintain regional hegemony. The Pacific step-up is more about Australia’s interests than that of the Pacifics.

One of the unexpected side effects of the tariffs is that by diversifying its trade, Australia now has less at stake in maintaining good relations with China.

In April 2020, in reaction to the pandemic, Scott Morrison called for an independent investigation by the World Health Organisation (WHO) into the origins of COVID-19, suggesting weapons inspector like powers. In retaliation, China initiated a series of trade tariffs on Australian products. Starting with Barley, Australia's coal, wine, beef, seafood, timber and cotton industries have all been hit. Australia has since referred China to the WTO for the tariffs placed on barley and wine.

After months of worsening relations, in November last year, China leaked a list of fourteen grievances, accusing Australia of 'poisoning bilateral relations'. The list included banning Huawei, the WHO investigation into COVID-19, and speaking out against human rights abuses. It also includes foreign interference legislation, statements on the South China Sea, accusations of cyberattacks, and "unfriendly or antagonistic” reports on China by the media. Much of what was on the list could be attributed to the US, the UK and many other states. However, the deliberately leaked list aimed to call out Australia specifically, hoping that Australia might kowtow to Communist Party interests.

At the centre of Australia-China relations in recent years, the list of grievances also mentioned Victoria's Memorandum of Understanding (MoU) with China on the Belt and Road Initiative (BRI), signed by the state’s Labor Premier Daniel Andrews in 2018. This was a shock to the Department of Foreign Affairs and Liberal Party PM Morrison; while the federal government was aware of a draft MoU, it was ultimately blindsided by Victoria signing the agreement, only finding out when the agreement was publicly announced. As a result, in 2020 the federal government passed a new Foreign Agreement Scheme, giving the federal government the power to veto any deals between states and foreign entities. In April, it used this new power to revoke four international agreements Victoria had with states overseas, including with China. Further increasing tensions between the Liberal federal government and Labor state government, who had been at odds over the handling of the pandemic.

BRI collaboration between Victoria and China had seen little progress, with infrastructure discussions underway but no agreements formalised. As the only state targeted under the new legislation, Australia’s China policy has become the sparing tool for domestic politics. Without a clear China policy, Australia has been unable to present a consistent approach to China. This has seen the bilateral relationship play out in domestic policy issues. As Australia heads towards a federal election, both the Liberal and the Labor Party are likely to solidify their China policies for voters. The Australian Labor Party is increasingly critical of China and the federal government’s China policy, compared to its Victorian state counterpart. Foreign Affairs Labor spokeswoman Penny Wong has called upon the Morrison Liberal government to introduce an Australian Magnitsky Act targeting businesses that conduct human rights abuses.

The Morison government is yet to enact a Magnitsky-like act in Australia which would see Australia sanction foreign individuals who commit human rights abuses abroad including forced labour in Xinjiang. Despite criticising China’s human rights abuses at the UN last year and welcoming sanctions by the UK, EU, US and Canada over human rights abuses in Xinjiang, Canberra is also yet to sanction China.

There is a clear mismatch between Australia’s public statements on China and its policy decisions. While publically outspoken about human rights abuses the Australian government is yet to implement sanctions against those implicit in the abuse. Domestic issues between federal and state governments have seen the Australia-China relationship used as an ideological sparring tool. For China, the leaked ‘fourteen grievances' have seen diplomatic issues handled via the media which has culminated in a diplomatic drift on all sides.

Moving forward

Last year’s trade tariffs saw two positive outcomes for Australia — putting it in a better strategic position. First, they have been a wake-up call after years of discussion about the importance of trade diversification and over-reliance on China. Australia has since expanded trade with its allies across the Indo-Pacific, including a new trade agreement with the UK. Second, one of the unexpected side effects of the tariffs is that by diversifying its trade, Australia now has less at stake in maintaining good relations with China. This should see Australia becoming more confident in its China policy.

The election of Joe Biden has reinvigorated the international rules-based order, multilateralism, and the global commitment to human rights. This year Australia and the US celebrate the 70th anniversary of the ANZUS Treaty. The mood in Canberra is shifting, with support for the US-Australia alliance restored. No longer at the whim of a chaotic Trump presidency, Australia is now more secure in its position against China. Moving forward, public statements need to match policy decisions.

The next step for Australia is to implement a consistent, bipartisan China foreign policy that is not susceptible to disagreements between state and federal governments nor party politics. With the US once again a stable security guarantor and enhanced trade diversification, Australia is in a strong position to solidify its China policy. However, as an election approaches, it is unlikely that any clarity in Sino-Australian relations will come until 2022.

DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.

Author biography

Kate Clayton is a Research Officer at La Trobe Asia and an international relations graduate research student. Her research focuses on Australia, China, the Pacific Islands, and security. She tweets at @kateclaytn. Image credit: Flickr/Michael Coghlan.