Australia-China relations have stabilised, thanks to efforts from both sides

Australian Prime Minister Anthony Albanese's visit to China this weekend is a major, albeit more symbolic, sign of how far bilateral relations have wound back from their nadir barely 18 months ago.

The Australian Labor Party (ALP)'s return to power at the May 2022 federal elections provided a window of opportunity for both Beijing and Canberra to put a floor under their rapidly deteriorating relationship at the time. Seize the moment they both did, and the gradual process of "stabilisation" since then has delivered concrete results.

Bilateral official contacts have resumed, with numerous ministerial meetings having taken place. Foreign Minister Penny Wong went to China at the end of last year to mark the 50th anniversary of the establishment of diplomatic relations. She has already met with her counterparts numerous times. Australian Trade Minister Don Farrell has also visited China to both lobby for the lifting of bans on Australian exports and promote bilateral trade which, despite diplomatic tensions during the Morrison government, has continued to grow, reaching nearly A$300 billion (US$190.71 billion) in 2022.

Meetings between Australian and Chinese leaders have also taken place, mostly on the sidelines of multilateral meetings such as the G20 summit in Bali, Indonesia in November 2022, where Albanese met with Chinese President Xi Jinping, and the East Asia Summit in Jakarta in September 2023, where he met with the newly appointed Chinese Premier Li Qiang.

The resumption of official contacts has been made possible and also facilitated by the resolution of China-imposed sanctions on Australian exports, from barley and hay to beef and timber, as well as the recent release of detained journalist Cheng Lei. Beijing has also indicated that it will review the tariffs it imposed on Australian wine, a sign that the ban may also be lifted in the coming months.

Not exactly a quid pro quo, the Albanese government's review of the lease of the Port of Darwin to Landbridge, a Chinese company, has concluded that it poses no significant security risks and can be managed, a decision that has already incurred criticism.

What has brought about these changes in bilateral relations? To some extent, quiet and persistent diplomacy has worked as it is supposed to do. The Albanese government has refrained from engaging in megaphone diplomacy and public criticisms of Beijing on human rights issues, Taiwan and the South China Sea while conveying to the Chinese government Australian stance on these matters.

At the same time, Canberra has sought to engage Beijing where it hopes their shared interests, such as climate change and green energy, could lead to cooperation. A mantra that government officials from Albanese to Wong have adopted and advocated is: "We'll cooperate where we can, we will disagree where we must, and we'll engage in our national interests."

Beijing, for its part, has been more than happy to reciprocate, having realised that its hard-edged pressure tactics on Australia have not delivered the outcomes it had hoped for. The Australian elections and change in ruling govenment provided an opportunity for it to change its approach. These diplomatic moves have been accompanied by the gradual resumption of exchanges in bilateral ties, from the return of Chinese students to Australian campuses, to Australian business travels to China. Bilateral high-level dialogue has also resumed.

Albanese's upcoming visit to China will take place at a time of both symbolic significance - 50 years since former Labor Prime Minister Gough Whitlam's historic 1973 visit to China, which was the first by an Australian prime minister - and the largely positive developments since Labor returned to power.

But significant barriers remain to further developing the "comprehensive strategic partnership" due to differences over a number of core issues that defy solutions without either side making significant compromises. What can realistically be achieved, first and foremost, is a recognition of and working in the context of these differences. At least three stand out.

The first is Canberra's current legislation on foreign interference, its investment review process, and the continued ban on Huawei from participating in Australia's 5G network, and the exclusion of Chinese investment in its critical minerals sector. While Australia continues to welcome foreign investment, including from China, Beijing should be realistic and accept that areas and sectors considered crucial to Australian national security will remain off-limits. This will obviously remain a sticking point in bilateral relations.

Second, Australia and China will remain poles apart on important regional issues, from the South China Sea to the Taiwan Strait. While the Labor government has refrained from making provocative comments about the Taiwan issue, it is clear that Canberra would prefer that cross-strait relations remain stable while Beijing's goal is to achieve reunification. Beijing also rejects the notion of the so-called "rules-based order", viewing this as simply an excuse to extend US dominance when, after more than seven decades, the region's geoeconomic as well as geopolitical compositions and balances of power have undergone significant transformation.

Australia, in turn, will be concerned over the continuous and growing expansion of Chinese military power, including its nuclear arsenals, and its increasing assertiveness in the region, which can lead to conflicts with other regional countries and with the US. Any disruption of the major sea lanes of communication will threaten Australian national interests, as its economy depends on maritime routes remaining free and open.

Finally, the Australia-US alliance, and Australia's networks of security partnerships with regional powers such as Japan and India, and its participation in the Quadrilateral Security Dialogue (Quad) and AUKUS, a trilateral security and defence pact between Australia, the UK and the US, together with the five-eyes intelligence cooperation, seen from Beijing's perspective, are clearly driven by the US-led traditional alliance systems and re-alignments after the Cold War aimed at containing China.

More specifically, China is becoming increasingly watchful and wary of the growing US military access to and use of Australia's defence bases and intelligence-gathering facilities. These will become important when and if the US is involved in future military operations against China in the South China Sea or over Taiwan.

These factors will remain major barriers to further improvement in bilateral relations. But they should not become obstacles to engagement and exclusion of cooperation. What are required are honest exchanges of perspectives between leaders and officials of the two countries; realistic assessments and expectations that certain differences will remain unresolvable but there remain areas where cooperation is possible; and approaching the bilateral relationship from the principle of qiutong cunyi (求同存异 seeking common ground while reserving differences), which is a nice match to the Labor government's recipe of managing its ties with China, and one that Beijing and Canberra seems to agree with.

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