Chinese customs agents had given verbal instructions to stop importing a string of Australian products including wine,barley,beef,lobster,coal,timber and copper.
Labor Premier Mark McGowan was launching weekly attacks on the federal government for its handling of the relationship,MPs were growing anxious about the impact of a $20 billion trade dispute on the local economy,and exasperated cray fishermen were emailing ministers in disbelief at the state of the relationship.
Australian Foreign Minister Penny Wong in Beijing on Wednesday.AAP
Their darkest hour was the start of a long road back that this week led to after accusations of xenophobia,economic coercion and deep diplomatic estrangement.
“You have to start to build this relationship back up,” Madeleine King,then Labor’s trade spokeswoman and now minister for resources said before sunrise on that wet November day in Perth in 2020.
“Because it took decades to build. We need to reinvigorate it,and we need to start today.”
King’s comments put an end to the Labor shadow cabinet’s largely bipartisan position on China relations. They also made Wong and Anthony Albanese nervous. King was the highest profile MP to call for the relationship to be repaired outside of Joel Fitzgibbon,who had historical connections with China and had fallen out with Albanese.
Resources Minister Madeleine King.James Brickwood
Internally,the comments were met with pushback from Wong and Albanese’s office who wanted to control the narrative. King had gone earlier than expected but was very aware of the impact the sanctions were having on local producers in Western Australia compared to the east coast. In hindsight,her comments helped set the tone for Labor’s election strategy on China 18 months later.
Labor had stuck by the Coalition government for more than two years as it implemented foreign interference legislation,blocked Huawei and had all ministerial contact cut off by Beijing. Albanese had largely left tricky questions on China to Wong and occasionally murmured broad agreement with the Coalition’s positions.
The then opposition leader had long held a centrist view on China,one that acknowledged its security risks but also its economic opportunities. In 2019,he said some coverage of the issues between the two countries had been “naive” and suggested it was “perhaps more suited to a fictional spy movie”.
The meeting between Anthony Albanese and Xi Jinping at the G20 summit in Bali.James Brickwood
“We also need to acknowledge that China has been a nation in which we have a friendly relationship and have had one since 1972,” Albanese said in comments first reported by Elena Collinson and James Curran
“That is part of Labor’s legacy,we will work with the region.”
But Labor did not want to give the Coalition the chance to make political headway out of painting Albanese as soft on Beijing in the middle of a febrile and occasionally nationalistic debate. Wong was also pragmatic about the relationship but aware of the political risks while China hawks were in ascendance. It would take time to put the relationship back on an even keel.
Gough Whitlam had some advice for the young Stephen Fitzgerald as he prepared to establish Australia’s first embassy in Beijing in 1972. The Labor prime minister told the 33-year-old ambassador that he would have to walk a tightrope. The Chinese should not think he was being careless of Australian interests,as they would take advantage,but at the same time,he did not need to be unnecessarily suspicious.
Gough Whitlam with Chairman Mao during his visit to China in 1973.National Archives
It was a balancing act that lasted largely until 2018. For years Australian businesses and the government were blinded by the amount of money flowing out of China. Then Xi Jinping’s authoritarian turn and Australia’s response broke the steady pattern of diplomacy that had helped both countries navigate fundamentally different world views and interests.
Australia’s ambassador to China,Graham Fletcher,who has been Canberra’s representative under both the Coalition and Labor,said in recent years both Australia and China had grown bigger,stronger,and more active in regional and global affairs.
“So we started to rub up more against each other including in our immediate neighbourhood,” he said last week. “We found that our respective interests and agendas didn’t always match up well,and this needed attention.
“The more that we had to do with each other,the more things could not be ignored,and the more we had things to say. As China sought to assert itself,Australia found a need to address potential vulnerabilities and to better define parameters for activity in our community.”
The Coalition implemented foreign interference legislation,banned Huawei and called for an inquiry into the origins of COVID-19. China imprisoned Australian citizens and hit Australia with $20 billion in trade strikes.
“For its part,China had its own reactions to Australian statements and measures,which it regarded as impinging on its national interests,” says Fletcher. “As problems became more prominent China disrupted trade with Australia,and the normal rhythm of official interactions fell away.”
For three long years dialogue between ministers,bureaucrats and some embassy officials was largely suspended. It was already on shaky ground. Chinese embassy staff claimed they were blindsided by Australia’s decision to close the borders to China on a weekend in the early days of the pandemic. The Australian government said it had called the embassy’s landline. No one had the ambassador’s mobile number.
When communication between Chinese officials in Canberra and the Department of Foreign Affairs completely broke down,China resorted to using the media,culminating in the 14 grievances issued by Beijing in a Canberra hotel in November 2020.
“The main cause was our political disagreements,” says Fletcher. “The pandemic didn’t help. It prevented even informal contact at a personal level.”
Three things changed. First,the election in May gave China the excuse to restart dialogue. Second,governments began opening their borders after years of pandemic isolation. Third,the 50th anniversary of Whitlam establishing diplomatic relations loomed as a potential inflection point for both sides.
By January 2021,King’s view that the relationship needed to be repaired had become mainstream and public within the Labor Party. Albanese wrote to then prime minister Scott Morrison urging him to “use all assets at its disposal to move the relationship in a more positive direction”.
Foreign Minister Penny Wong will meet her Chinese counterpart today for talks in Beijing
Chinese ministers and state media had noticed the shift in tone and began enthusing about the prospect of a Labor victory. Wong and Albanese’s initial political concerns were realised in February the next year when Morrison labelled deputy Labor leader Richard Marles “a Manchurian candidate” for the Chinese Communist Party in parliament. Morrison had turned to increasingly hyperbolic language to emphasise national security in the lead-up to the election,but the trading relationship had gone so far south and Morrison was so personally unpopular that it had little real impact.
By June,only a month after Labor’s election win,Marles found himself sitting opposite his Chinese counterpart Wei Fenghe as defence minister at dinner at the Shangri-La in Singapore. It was no accident. Organisers had put the pair together alongside US Defence Secretary Lloyd Austin to talk shop.
Defence Minister Richard Marles in Singapore with his counterparts from Singapore,Ng Eng Hen (left),and Wei Fenghe from China.AFP
It was the first time a high-level Chinese official had come in contact with an Australian official since 2019. Political decisions had propelled the tension,but the diplomatic estrangement had also been driven by distance.
While he talked politely with Wei,Marles was also seeing through plans to expand US-Australia military cooperation with Austin,culminating in the decision to host nuclear-capable B-52 bombers in the Northern Territory in October. The move was a direct response to China’s own growing missile arsenal. Australia was buttressing its short-term diplomacy with long-term defence plans.
The Singapore meeting was pivotal in the diplomatic steps that followed. During COVID the only way to get ministerial engagement happening was to formally request a meeting in writing. Neither side wanted to be the first to jump. So,a neutral venue and a seemingly impromptu dinner meeting in person between Chinese and Australian representatives meant both could save face while getting some progress on diplomatic and economic issues that had been frustrating both governments.
“We agreed it was important that our two countries meet,” said Marles.
The Shangri La opened the door to dialogue. Wong would meet with Wang for the first time the next month in Bali. Then again in September at the United Nations in New York and finally in Beijing on Wednesday. Albanese met Xi at the G20 for the first time,his next is likely to be in Beijing next year for the 50th anniversary of Whitlam’s first visit to China as prime minister.
Albanese and Wong have re-established contact without giving up any of the substantive issues in the relationship but neither have there been any major breakthroughs yet. The Coalition,though occasionally misstepping in its rhetoric,did deliver what it set out to achieve:a new landing pad for Australia-China relations that means Beijing will no longer be surprised when Australia talks about human rights or implements national security decisions.
Australian wines are replaced by Chilean,French,Spanish,and German wines in BeijingSanghee Liu
Wong says the “great challenge” with China is how to manage the relationship without sacrificing Australia’s national interests or values.
“We have different interests and we were not going to step away from them,” she says of Labor’s approach since forming government. “But[we wanted] to try and use the opportunity of a change in government and a change in tone to stabilise the relationship and to change the dynamics in it.
“I think we’ve made a lot of ground in terms of opening up those channels of communication and enabling that dialogue for the management of some of the really difficult issues.”
Pre-election,Albanese modelled Canberra’s approach on the Biden administration by speaking about “competition without catastrophe”. By this year that had transformed into Wong’s Australian formula of “cooperate where we can,disagree where we must,and engage in our national interest”.
The trade sanctions were hugely disruptive in 2020,but many industries have now diversified their exports away from a market that they were too heavily concentrated on.
A new box of Geoff Raby’s Ambassador wine series in a Beijing bottle shop this week.Sanghee Liu
“If they can get a price premium in China still they will definitely test the waters. But it’s not going to be let’s party like it’s 2019 for some time,” says one industry source who asked not to be identified because the situation is commercially sensitive.
“And if there’s no price premium on offer,they’re unlikely to dump their new markets just to pivot back to China.”
In Beijing bottle shops few Australian wines remain. Most that are will be leftover from the once $1.1 billion strong market and have been stuck in shops for the past three years. Only a few new deliveries now make it through,including a brand endorsed by former Australian ambassador Geoff Raby,a prominent critic of the Coalition government’s policy,which was largely spared the tariffs put on other winemakers.
Saul Chen Wei,a Chinese wine importer based in Wenzhou,says he hoped that bilateral relations “could return to the previous honeymoon period as soon as possible”.
“Australian wine accounted for 90 per cent of all my products before 2021,” says Chen.
Producers from other countries were quick to rush into the world’s largest consumer market when Australia was forced out.
“After the anti-dumping policy landed,it only took me half a year to completely replace Australian wine with French and Chilean wines,” says Chen. “For me,this only meant some loss of customers,but its impact on the Australian counterparts is massive.”
Chen blames Australia for the deterioration in the relationship,taking a view largely promoted by Chinese state media that ignores China’s own aggressive activity
“The anti-China rhetoric in Australia is too loud,” he says. “Too many people have a biased view of China.”
Business had been forced into the shadows by some of the more inflammatory rhetoric from both sides. Chinese companies wanted to engage with Australian miners and agriculture firms but did not feel they had permission from the central government to do so. When they did,they did so nervously and quietly. Australian businesses were drowned out by claims of self-interest for the best part of the three years - some of it valid,some of it not.
“It was a year of two halves,” says David Olsson,the Australia China Business Council president. “Following the change of government the relationship has been reactivated.”
Business leaders have been quick to jump on the positive developments out of Wong’s meeting in Beijing but are also more realistic and cautious than they were four years ago.
“It was a surprise,” says Olsson. We’d all been hoping to see some further next steps in stabilising the relationship. I don’t think anybody had anticipated that an invitation of this nature would be dropped on the door before Christmas.
“Nobody is coming out next year with great expectations. It’s tempered expectations.”
The great test for Wong is now turning symbolic meetings into practical outcomes. Coalition ministers have been watching the meetings closely this week and will start to sharpen their criticism if there is no sign of developments beyond dialogue.
Her meeting in Beijing was her third with Wang this year. It is not unreasonable to expect some progress on trade and the arbitrary detention of Australians Yang Hengjun and Cheng Lei soon. China won’t give up its leverage for free. The Australian government now needs to work out what price it is willing to pay.
Asked where Australia’s engagement with China goes from here,Wong says:“It’s got a lot of work to do.”
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