What is necessary for a flourishing Australia-China policy?

Australia’s relationship with China has strengthened magnificently in recent years. The foundations of a productive working relationship have been formed and it is now necessary for the Abbott government to implement broader, longer-term strategies which provide greater depth in the political relationship for the future.

It is well understood that China is special to Australia because of the importance it has assumed in our bilateral relations, within the Asia Pacific region and in global standing. Understanding that Australia’s China policy operates in an environment that presents both great opportunities and challenges to Australia is key to effective planning for the future.

Any Australian government that has managed a successful relationship with China in the past has exhibited a fundamental level of understanding of the country. The Whitlam government was first to lead the way in China policy during the 1970’s, the Hawke government laid the political foundations for economic reform in the 1980’s and the Gillard government built upon this to secure high-level political and strategic communication.

These leaders and their governments took the time to understand China and garnered the deserved respect for doing so. The Abbott government finds itself in an important policy making position in the current juncture of the Australia-China relationship. A different conceptual approach to China has developed over recent years and is beginning to see previously held attitudes make way for a more multi-dimensional understanding of the country in strategic, economic and cultural terms. While great progression has been made, there are very important points that will continue to be significant when Australia thinks about China.

A critical misunderstanding that many in Australia and the international community have about China is the extent to which the leaders of the Communist party are preoccupied with internal, domestic problems. It is important to recognise that significant internal debate exists regarding legal reform and financial structural changes within China, which many Chinese leaders believe is necessary in order to see prosperity in the country continue. Australia’s China policy needs to recognise this and ensure it does what it can to help rather than hinder the process of China’s development.

A second potential misunderstanding in Australian China policy is that it cannot be focused on in purely economic terms. Stephen Fitzgerald points out that Australians “have become comfortable with the idea that the relationship with China is essentially commercial." Australia needs to ensure deep political and cultural engagement compliments this to create a strong, multidimensional relationship.  Understanding these two important points is a crucial part of the new government providing comprehensive China policy. In order to assess Australia’s future China-policy challenges and opportunities, it is necessary to look at three realms of China policy: strategic, economic and cultural.

Strategic Challenges and Opportunities

Australia can no longer be complacent about security challenges in the Asia-Pacific region. The old pillar of Australian strategic considerations operated in an open and stable regional order, underwritten by an unchallenged US strategic presence. The rise of China and its impact on the Asia-Pacific strategic order changes regional dynamics.

If Australia wants to maintain a strong economic and cultural relationship with China, it is going to have to make changes to strategic policy which make it friendlier. Australia’s current China policy has two strands – engagement and hedging. This has resulted in the modernization of Australia’s military and the strengthening of the US alliance, both of which are antagonizing towards China. In order to ensure Australia can maintain a strong, open strategic relationship with China, more open communication has to be focused on. 

The Gillard government began this process in April 2013, making significant progress in providing a strong platform for strategic relations. An annual meeting between the Australian and Chinese prime ministers, along with annual cabinet level strategic dialogues are the first step in ensuring Australia’s strategic engagement with China is strong. But possessing a strategy is not the same as effectively implementing it and this can be properly done in the following ways:

• The Strategic Dialogue established in April 2013 should utilise interested parties in qualified professions, such as universities and businesses. This will help create broader engagement with the Australian public and will tap into the China expertise which has grown significantly in recent years.
• Developing a China-informed generation of Australian policy makers will preserve our long-term interests.  The government needs to establish long-term programs of consultation and engagement which look to the future of the relationship. This means placing an emphasis on research, dialogues and partnerships that have a clear direction for a shared future.
• One of the most important facets of Australian strategic relations with China is to reassure them that our relationship with the United States is not threatening. Australia’s policy challenge here is about striking a balance.

Alongside these recommendations, a fundamental question will continue to be asked - whether there can ever really be any equivalence between Australia’s strategic relations with China and with the United States. This will heavily depend on how China’s security orientation continues to advance in the years ahead and will have to be vigilantly watched and assessed. Ensuring the economic and cultural realms of Australia’s China policy are well developed will further compliment the effective implementation of strategic policy. 

Economic Challenges and Opportunities

As was outlined in the beginning of this paper, Australia’s China policy needs to allow China to continue to develop and mature economically. It is fundamental that Australia’s policy towards China is accommodating and helpful - because a strong, prosperous China is necessary for the strength of Australia, the strength of our region and the stability of the world.

Promoting economic co-operation between Australia and China has been of paramount importance to previous governments due to the significance of China’s role in Australia’s economic prosperity. China’s investment in Australia has traditionally been concentrated in the natural resources sector, but important projections suggest that future governments will need to prioritize opening new areas of investment including agriculture, financial services and infrastructure. This should be complimented by other new sources of productivity growth in areas such as tourism and education. The following policy recommendations are necessary to ensure diversity and strength in the Australia-China economic relationship:

• It is urgently necessary to finalise the Free Trade Agreement with China. This will give Australia access to the large emerging middle class of consumers that are beginning to drive the Chinese and global economy.
• The government needs to encourage Australian interaction with the immense China market in the early stages of economic development. By being involved early, Australia proves its support and commitment and will be in a good position to capitalise on more diverse opportunities to engage with Chinese companies in the future. This will also ensure Australia is prepared for a time when Chinese companies become more innovative and creative on a grand scale. This will be lucrative for Australia, especially if partnerships in areas such as technology, sciences, renewables and sustainability can be secured.
• Mitigating the threat that Australia sees in Chinese state owned enterprises (SOE’s), particularly where ownership of land is involved, is another important step. A Lowy institute poll taken annually since 2009 suggests consistent unease exists about Chinese investment in Australia. In 2013, a majority of Australians (57%) still consider that “the Australian government is allowing too much investment from China”.
• It is necessary for Australia to seize opportunity in China’s fast growing inland provinces. While many Australian companies are already active in western China, this is an area that is fast becoming attractive to other countries because it is central to the innovative, high-skills, high-tech growth of China. Competition here will be tough and the Australian government needs to play a significant role in facilitating business links and ensuring Australian businesses have an open market to work in.
• In addition to these points, Australia should support the development of the non-state sector in China – many of which are involved key technical sectors. A more comprehensive plan for engaging with the non-state sector would provide greater incentives investment in Australia as well.

The most important thing here is to assume that future shared economic challenges will be much easier to navigate if we work together. By ensuring the environment for Chinese investment is more welcoming and by diversifying the nature of economic interaction with China, Australia can ensure the same level of economic interaction remains and that it can be sustained into the future.

Cultural Challenges and Opportunities

Cultural policy is a crucial part of an effective Australia China-policy, yet when viewed in direct comparison to other facets of Australia’s China-policy, it is revealed to be quite lacking. 

The Founding Director of the Australian Centre on China in the World, Geremie Barme, suggests that the strength of the economic and strategic relationship is being compromised by a cultural disconnect and underutilised civilian links, and should be a more important point of focus.

While various progressions have begun to target this, for example Kevin Rudd’s aim to make Australia “not just the most Asia-literate country in the collective West but also the most China-literate country”, there are more targeted things that Australia’s China-policy can be doing to ensure cultural opportunities are seized.

• It is necessary to create an Asian literate society who understand the subtle particularities of the Chinese culture beyond the superficial. This has been well established with specialised tertiary research centres at ANU and the University of Sydney as well as the Confucius Institute for language study. However, it is evident that the strongest links exist at elite institutions within Australia. Increasing interaction between more diverse educational institutions will make China accessible for a wider variety of Australians.
• There is a very strong Chinese community in Australia whose skills and networks are underutilised. There are currently 150,000 Chinese students in Australian universities who could help with cultural engagement and understanding of the country. Many students have relationships in China which can be accessed and utilised in ways that have not been attempted yet. By tapping into these existing networks, civilian relationships between China and Australia would grow stronger.
• Creating links between Australian and Chinese journalists is another important way of advancing cultural relations.Journalism in China has grown to become a more diverse, liberal profession in recent years. Australian foreign correspondent John Garnaut observed the degree of professionalism in Chinese journalism increase exponentially in the past 5 years and it seems this change could be better utilised. Offering exchange programs between Australian and Chinese journalistic institutions offers great potential for a deeper understanding to be developed between the two countries. 

It is difficult to imagine what Australia would currently look like if it weren’t for our critical interaction with our great neighbour. As Australia continues to navigate the 21^st century, it is important to recognise the crucial importance China will continue to have in our region and in our world. By implementing effective China policy that helps and does not hinder the development of China, and by ensuring Australia’s China-policy is not economic-centric, the Abbott government will find itself in a wonderful position where opportunity can be seized and challenges overcome for a prosperous future.