Australia and China's Complex Diplomatic Relations Amid Trade Challenges

Beijing is eager to advance its relationship with Australia, particularly through proposed collaborations in artificial intelligence. However, these initiatives have encountered a lukewarm reception, highlighted by insights from Maude, who authored Australia's foreign policy white paper in 2017. In 2022, trade between Australia and China reached A$312 billion, which constitutes a significant quarter of Australia's overall trade volume. Since 2020, relations have stabilized after China placed unofficial bans on A$20 billion worth of Australian exports.

During a recent press briefing, Australian Prime Minister Albanese stressed the importance of direct dialogue with Chinese leaders for Australia's national security. He articulated a balanced approach, stating that Australia aims to cooperate where possible while also maintaining transparency regarding disagreements. Treasurer Jim Chalmers acknowledged the complexity of economic ties with China, emphasizing that these relationships remain a significant priority for the government. Despite the complex nature of these ties, Australia has heightened scrutiny of Chinese investments, particularly concerning critical minerals, renewable energy, and vital infrastructure—a point likely to be brought up by Chinese officials during discussions.

Maude pointed out that the Australian government recognizes the necessity to mitigate China’s increasing influence over the critical minerals supply chain for national interest. Meanwhile, Geoff Raby, a former ambassador to China, observed that China may seek to amplify its role in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, of which Australia is the chair. Raby cautioned that policy decisions should avoid fostering isolationist tendencies within China or empowering domestic factions advocating for insular policies. Albanese is set to engage with business leaders in Shanghai before heading to Beijing for an annual leaders' dialogue with Premier Li Qiang and then to Chengdu for further discussions.