China-Australia relations reach ‘good enough’ baseline, ex-envoy says

After years of strain, China-Australia ties have reached a “good enough” baseline for Canberra, though still short of Beijing’s broader ambitions, according to a former top Australian diplomat. The relationship had taken a significant downturn since 2017, but was now on “a more realistic footing”, Graham Fletcher, a non-resident fellow at the Lowy Institute, a Sydney-based think tank, wrote in a report released on Sunday. Fletcher served as Australia’s ambassador to China from 2019 to 2023. The countries are currently reviewing their decade-long free-trade agreement, and Australia served as the guest country of honour at China’s International Supply Chain Promotion Expo held in Beijing in June. Although deep-seated security frictions remain over various regional issues, including the South China Sea, it represents a sharp turnaround from the relationship’s fracture in 2017, when Canberra introduced anti-foreign interference legislation and accused Beijing of political infiltration. The rift widened in 2018 as Australia became the first country to ban Chinese telecoms giant Huawei Technologies from its 5G network. Ties hit a historic low in 2020 following Canberra’s call for an independent international inquiry into the origin of Covid-19, prompting Beijing to impose trade restrictions on major Australian exports such as barley, wine and lobster. A diplomatic thaw began in 2022 after Prime Minister Anthony Albanese’s Labor government took office. High-level ministerial dialogue resumed, and Albanese visited Beijing in 2023 and 2025. Encouraged by sustained diplomatic engagement, Beijing incrementally lifted its trade barriers, culminating in the full restoration of regular trade for Australian live lobsters and other commodities by late 2024. “It was a modest new normal, not a reset,” Fletcher wrote. But he said the improvement had not led to an expansion of cooperation as Beijing might have expected, arguing their conflicting strategic interests and values would prevent deeper closeness. “This appears good enough for Canberra, which is quietly confident in its resilience yet wary about Beijing’s overtures to go further and into new areas of activity.” Fletcher said China was keener than Australia to move beyond stabilising the relationship, and wanted cooperation in areas such as developing a non-discriminatory AI environment and guarding the global trading system. The proposals have gained little traction in Canberra. In March, China’s then ambassador to Australia, Xiao Qian, who just left the post at the end of last month, reiterated Beijing’s willingness to deepen cooperation with Canberra in high-speed rail, green energy, AI and quantum technology. According to Fletcher, “Beijing has not given up on hopes of drawing Australia closer into its orbit. Canberra is more focused on consolidating current pillars in the relationship.” From Canberra’s perspective, going further would entail a degree of risk that it does not see as worthwhile, he added. This could include Australian politicians facing the political hazard of being seen as pro-China and potential concerns from the US regarding Australia’s economic interdependence with China. Fletcher highlighted two risks for the relationship. The first involves serious disagreements that cannot be successfully managed, such as Beijing’s pushback against foreign restrictions on its technology and investment, ownership of the Port of Darwin or political unrest in the Pacific Islands. The dispute over the Port of Darwin is a substantial friction point, as the port was leased to China’s Landbridge Group for 99 years in 2015. Citing national security concerns, Canberra has sought to return the port to local control, prompting Landbridge to launch international arbitration against the move. The second risk encompasses major shocks, including an upheaval within China, Beijing’s possible use of force against Taiwan or broader regional conflict, he said. Beijing sees Taiwan as part of China to be reunited by force if necessary. Most countries, including Australia, do not recognise the country as independent. However, Australia strongly supports unofficial economic and cultural ties with the island. Canberra also backs Taiwan’s meaningful participation in international organisations – a stance that has drawn objections from Beijing. Additional friction could arise if the US-China rivalry deteriorates to a point where Australia finds itself caught between unacceptable demands from Beijing or Washington, particularly regarding critical minerals, technology or national infrastructure, according to the report. Fletcher said that after years of turbulence, the Australia-China relationship was entering a phase that was more realistic, less ambitious and probably more sustainable, with both sides better equipped with experience to navigate tensions. “Even so, the relationship remains poised in an international context that could pull or push in unexpected directions,” he said. “Stability will remain a goal, not a given.”

China-Australia relations reach ‘good enough’ baseline, ex-envoy says

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Canberra is described as quietly confident in its resilience yet wary of Beijing’s overtures to go further and into new areas of activity

Canberra is described as quietly confident in its resilience yet wary of Beijing’s overtures to go further and into new areas of activity