China-Australia relations warm up again, but will it last?

The recent release of Chinese Australian news anchor Cheng Lei and the lifting of tariffs on key Australian exports into China are signalling a detente in China-Australia relations. But given the impact of external geopolitical issues and China-US relations on China-Australia bilateral relations, will the warming relations and resumption of exchanges and trade stay the course? Lianhe Zaobao’s China Desk looks into the issue.
This handout photograph taken on 11 October 2023 and released by Australia's Department of Foreign Affairs and Trade shows Australian Foreign Minister Penny Wong (left) and Australian journalist Cheng Lei upon her arrival at the airport in Melbourne, Australia. (Sarah Hodges/Australia's Department of Foreign Affairs and Trade (DFAT)/AFP)
This handout photograph taken on 11 October 2023 and released by Australia's Department of Foreign Affairs and Trade shows Australian Foreign Minister Penny Wong (left) and Australian journalist Cheng Lei upon her arrival at the airport in Melbourne, Australia. (Sarah Hodges/Australia's Department of Foreign Affairs and Trade (DFAT)/AFP)

Chinese-born Australian news anchor Cheng Lei has finally been released after three years of detention in China on national security charges. Australian Prime Minister Anthony Albanese confirmed that Cheng has returned home and has been reunited with her family in Australia on 11 October. Australian Foreign Minister Penny Wong had personally welcomed Cheng at the airport.

In response to queries, Chinese foreign ministry spokesperson Wang Wenbin said that Cheng had been sentenced to two years and 11 months of imprisonment and deportation for illegally providing state secrets to an overseas party. After serving her sentence, Cheng was deported out of the country by the Beijing Municipal State Security Bureau.

Cheng had disappeared on 13 August 2020, and later that month was placed under “residential surveillance at a designated location” by China on national security grounds. In February 2021, China arrested her on suspicion of illegally supplying state secrets overseas. Cheng was then a news anchor on Chinese state media’s English-language channel CGTN.

At that time, China-Australia relations were at a low point — then Australian Prime Minister Scott Morrison called for an international inquiry into the origins of the Covid-19 pandemic, much to the anger of China. In retaliation, Beijing imposed trade restrictions on Australian exports of wine, barley and coal. The Australian Broadcasting Corporation commented then that Cheng’s case was part of the Australia-China dispute.  

Relations thawing

Australian Labor Party leader Albanese has taken a pragmatic approach to improving Australia-China relations since taking office in May last year. High-level bilateral dialogues have resumed, the Australian foreign and trade ministers have each visited China, and Albanese even met Chinese President Xi Jinping on the sidelines of the G20 summit in Indonesia last November.

Beijing has also lifted tariffs on Australian coal and timber, and reached an agreement with Australia to resolve their dispute over barley imports into China. Beijing also announced that it will review its tariffs on Australian wine.  

China-Australia relations are at a pivotal point for a new start, and there is a need to maintain the steady and good momentum of these ties as well as to encourage their continued development. — Xiao Qian, Chinese ambassador to Australia

Australian Prime Minister Anthony Albanese and Australian Foreign Minister Penny Wong during the 43rd ASEAN Summit in Jakarta, Indonesia, 6 September 2023. (Willy Kurniawan/Pool/Reuters)
Australian Prime Minister Anthony Albanese and Australian Foreign Minister Penny Wong during the 43rd ASEAN Summit in Jakarta, Indonesia, 6 September 2023. (Willy Kurniawan/Pool/Reuters)

The improvement in China-Australian relations is symbolised by Cheng's release, and on 11 October, the Chinese foreign ministry made some encouraging comments. During a Chinese foreign ministry regular press conference, a reporter asked, “Is it China’s hope that with this [Cheng Lei] case now resolved, there’s an opportunity for better relations between Australia and China going forward?”

Wang replied that China’s position on the growth of China-Australia relations has always been “consistent and clear”, and that a “sound and stable” China-Australia relationship is in the interest of both sides and also conducive to the peace and stability of the region and beyond. He added, “China stands ready to work with Australia to continue to improve and grow the bilateral relationship and bring more benefits to the two peoples.”

During the Asia Briefing LIVE 2023 organised by Asia Society Australia in Melbourne on 11 October, Chinese ambassador to Australia Xiao Qian noted in his speech that China-Australia relations are at a pivotal point for a new start, and there is a need to maintain the steady and good momentum of these ties as well as to encourage their continued development.

Xiao added that China and Australia have more in common than differences, and that Albanese’s visit to China this year will promote better China-Australia relations. Albanese's visit has since been announced to be taking place on 4-7 November, and it will be the first by an Australian leader since 2016.

China’s release of Cheng will not only help Albanese deal with the pressure at home but also create a friendly atmosphere for his China trip before the end of this year.

This handout photograph taken on 11 October 2023 and released by Australia's Department of Foreign Affairs and Trade shows Australian Foreign Minister Penny Wong (right) hugging Australian journalist Cheng Lei upon her arrival at the airport in Melbourne, Australia. (Sarah Hodges/Australia's Department of Foreign Affairs and Trade (DFAT)/AFP)
This handout photograph taken on 11 October 2023 and released by Australia's Department of Foreign Affairs and Trade shows Australian Foreign Minister Penny Wong (right) hugging Australian journalist Cheng Lei upon her arrival at the airport in Melbourne, Australia. (Sarah Hodges/Australia's Department of Foreign Affairs and Trade (DFAT)/AFP)

Although Albanese once claimed that Cheng’s release would not be a condition for him to visit Beijing as visits “should not be transactional”, Australian public opinion had been pressuring officials and calling on the Australian government to secure Cheng’s release before the prime minister visits China. 

China’s release of Cheng will not only help Albanese deal with the pressure at home but also create a friendly atmosphere for his China trip before the end of this year.

Born in Hunan’s Yueyang in 1975, Cheng migrated to Australia with her parents at ten years old and graduated from The University of Queensland. She had worked at CCTV, CNBC and CGTN.

This August, she said in an open letter conveyed through Australian diplomats that she missed the sun, adding, “I haven’t seen a tree in three years.”

More to be done

Based on a Reuters report, analysts said that while Cheng’s release signalled a breakthrough in China-Australia relations, differences remained between them. Furthermore, blogger Yang Hengjun, another Australian detained in China, has yet to be released, and there was no further information on the matter either.

Adam Ni, an independent commentator on China affairs, said that while Cheng’s release is a “big step” in stabilising Australia-China relations, both sides must work harder to stabilise bilateral relations, as it is “up to Beijing and Canberra to figure out the new normal in bilateral relations”. 

... “it [Cheng's release] doesn’t completely change the overall structural difficulties that have been present”. — Ryan Neelam, Director, Public Opinion and Foreign Policy Program, Lowy Institute

People on the harbour opposite the Sydney Opera House in Sydney, Australia on 1 October 2023. (David Gray/AFP)
People on the harbour opposite the Sydney Opera House in Sydney, Australia on 1 October 2023. (David Gray/AFP)

Ryan Neelam, director of the Public Opinion and Foreign Policy Program at the Lowy Institute, also said that Cheng’s release is one of the more concrete signs that “Australia is no longer being punished by China for comments and policy measures that Beijing had objected to”. However, he also pointed out that “it doesn’t completely change the overall structural difficulties that have been present”.

Difficult to decouple from China

While Australia moves closer to the US in terms of security, it is dependent on China for trade and economic benefits. Although China-Australia relations have experienced ups and downs over the past few years, China remains Australia’s largest trading partner, with two-way trade in goods amounting to AU$287 billion (US$195 billion) in 2022, accounting for 28% of Australia’s overseas trade.

Australia has tried to reduce its reliance on China through the signing of free trade agreements with India and the UK, as well as strengthening its investments and economic and trade ties with Southeast Asia. But this does not mean that Australia can decouple from China entirely. 

In an article dated 5 October, the South China Morning Post reported that Australian authorities conducted three separate internal studies in the past eight years, concluding that it was an impossible task to completely break away from trade relations with China.

The report cited anonymous sources as stating that the conclusions were unanimous and non-partisan, and ultimately helped to justify Australia’s renewed trade engagement with Beijing late last year. The source also claimed that studies have made it clear that “Australia cannot successfully diversify trade away from China… diversification to Southeast Asia is really China plus.”

... for three key Australian products — lithium, iron ore and lobsters — exports to China account for around 84%, 69% and 80% of total exports respectively.

People visit the Temple of Heaven in Beijing on 10 October 2023. (Pedro Pardo/AFP)
People visit the Temple of Heaven in Beijing on 10 October 2023. (Pedro Pardo/AFP)

When it was under China’s punitive trade restrictions, Australia was indeed able to find alternate markets for some of its products, such as exporting coal to India, Japan and South Korea. According to a report by Radio Free Asia, Australia’s Treasury estimates that exports to new markets increased by US$3.3 billion, which basically offsets the US$4 billion decrease in exports to China.  

However, for three key Australian products — lithium, iron ore and lobsters — exports to China account for around 84%, 69% and 80% of total exports respectively. Professor James Laurenceson, director of the Australia-China Relations Institute at the University of Technology Sydney, stated, “Telling these Australian exporters to ‘diversify’ is both silly and insulting.” 

Australia’s fundamental China policy

Compared with the previous Morrison government, cabinet ministers of the Albanese administration were more cautious in publicly speaking about the China issue, to break the discord with China.

Australian policy research institution the Lowy Institute stated in a commentary that key Australian ministers have continuously reiterated the same mantra: “We will cooperate with China where we can, disagree where we must, but we will engage in our national interest.” 

During her visit to Beijing last December, Penny Wong expressed to Chinese Foreign Minister Wang Yi that if both countries could “navigate our differences wisely” both Australia and China can grow their bilateral relationship and uphold both sides’ national interests. She stated, “We are different political systems. We are countries with different interests. And part of the job of government is managing those interests wisely.”

... security issues remain the crux of the discontent in China-Australia relations. 

Australia's Foreign Minister Penny Wong addresses the 78th Session of the UN General Assembly in New York City, 22 September 2023. (Eduardo Munoz/Reuters)
Australia's Foreign Minister Penny Wong addresses the 78th Session of the UN General Assembly in New York City, 22 September 2023. (Eduardo Munoz/Reuters)

US-based Chinese academic He Qinglian opined that Wong’s notion of navigating differences wisely should mean that Australia would no longer openly criticise China’s political system, and both sides would seek to co-exist in spite of their differences. 

Indeed, the fundamentals of the Albanese government’s policy towards China have taken the form of committing to practical efforts to promote economic and trade relations and spur exports and economic growth, while adopting a political viewpoint and standing firm on their stance on issues such as human rights, but refraining from interfering.

Aligned with the US on military and security

However, security issues remain the crux of the discontent in China-Australia relations. Australia, as a US ally in the region, has tied its security policy even closer with that of the US and the UK through the AUKUS trilateral security partnership. AUKUS has been seen as a counterforce against China’s influence in the Indo-Pacific region.    

According to a report on BBC’s Chinese website, in accordance with agreements, from 2027, the US and UK will deploy a small number of nuclear submarines in naval bases in Perth, Western Australia, and Australia will buy three US Virginia-class submarines in the early 2030s, with options to purchase two more.

Australia is also a member of the Quadrilateral Security Dialogue (Quad) along with the US, Japan and India. Led by the US, Quad is likewise seen as a mechanism to contain China. 

After Wong’s visit to China, Chinese state media The Global Times published an editorial piece that called on Australia to take a rational view of China’s peaceful development, and put a stop to arbitrarily securitising political relations, “and even forming confrontational and exclusive coteries in the region against China”. It further claimed that these are all included in the meanings of “stable relations with China”.

The Albanese administration is adopting a pragmatic approach with regard to its China policy; it sees China as a strategic challenge while also valuing its economic and trade relations with China. 

Laser beams illuminate the sails of Opera House Sydney on 20 October 2023, during celebrations to mark its 50th anniversary. (Saeed Khan/AFP)
Laser beams illuminate the sails of Opera House Sydney on 20 October 2023, during celebrations to mark its 50th anniversary. (Saeed Khan/AFP)

Although the editorial did not explicitly name them, the “confrontational and exclusive coteries” clearly refer to mechanisms such as AUKUS and Quad. 

Indeed, there is a need to balance both economy and security. The Albanese administration is adopting a pragmatic approach with regard to its China policy; it sees China as a strategic challenge while also valuing its economic and trade relations with China.  

This sentiment is also reflected in the 2023 Lowy Institute Poll. The poll showed that 56% of respondents see the resumption of contact between Australian and Chinese ministers as positive, but 52% of respondents see China as more of a security threat than an economic partner.

It is not just bilateral issues that affect China-Australia relations; the China-US conflict is a key external factor. Australia is a regional ally that the US can tap on to contain China, and Australia would never back out of the US-led security mechanisms. 

How Australia balances the three-way relations with the US and China, and whether China and Australia would be able to navigate through differences wisely, shall determine how long the warming of China-Australia relations would last. 

This article was first published in Lianhe Zaobao as “成蕾获释,中澳关系稳了?”.

Related: Australia far more wary of China than SEA nations despite thawing relations | Don’t expect a reset in Australia-China relations anytime soon | AUKUS: Aggravating tensions and dividing the world