12 7 November 2013

An Abbott Government China Policy: A Chinese Perspective

Dr Fujian Li FDI Visiting Fellow

Key Points

 As a conservative politician, Tony Abbott may not see China as the first priority in his foreign policy agenda.

 The Coalition, which has a tradition of pragmatism, will certainly try to play a

delicate balance between the US and China.

 In calculating Australia’s national interests , it is hard to see any significant

strategic shift in favour of China happening in the foreseeable future.

 China looks forward to having a more stable and predictable business

relationship with Australia under the Abbott Government.

Summary

Now is an interesting time to think about the future of the Sino-Australian relationship, not only due to the sheer changes in political and economic dynamics that have happened in the region and the globe, but also because both countries have just had changes of leadership. The Sino-Australian relationship is potentially standing at a new starting point.

* This paper is based on a speech prepared for the 2013 Emerging Leaders’ Dialogue, supported by Griffith University, Peking University and the Queensland State Government.

Analysis

The result of the general election in 2013 may not have been a surprise to Australians, even though Kevin Rudd, who is widely known in China as Lu Kewen, reclaimed the role of prime minister in June and tried very hard to save his party.

Five years ago, when an Australian leader spoke excellent Mandarin in China, the entire Chinese nation felt respected and proud. Nobody had expected, however, that so many frictions would be created in Mr Rudd’s first term.

So, from the perspective of China, who is Prime Minister Tony Abbott? Is he a friend or foe of China? Will Australia draw closer to China, or will Canberra work with Washington to try to contain Beijing? Here is one Chinese evaluation.

Mr Abbott certainly appears to fit the mould of a typical conservative politician. He is keen on traditional Western values and has a strong religious belief. The idea of conservative liberalism and the glorious Anglosphere seem to be embedded in his blood.

Anglosphere may be a good term to generalise Abbott’s foreign policy thinking, at least before he became prime minister. The so-called Anglosphere consists of five English- speaking, Anglo-Saxon-dominated countries: the US, Great Britain, Australia, New Zealand and Canada. Sometimes, it also expands to include their closest allies, such as Japan and NATO members (putting aside possible espionage issues).

In the view of Anglosphere supporters, the current international orders, both political and economic, are shaped and protected by the five countries, with the UK having taken the lead before the two world wars, and the US after.

Since the Cold War era, the intelligence-sharing mechanism among the Anglosphere countries has been another close bond. It is why, in the strategic domain, the Anglosphere is also known as the “Five Eyes”.

In his speeches and books, Mr Abbott has never indicated a belief that the potential international political and economic changes brought about by the rise of China would shake the dominance of the Anglosphere. Therefore, Australia does not need to choose and remains firmly in the Western camp.

He strongly supports the US pivot to Asia and believes that the alliance is the bedrock of Australia’s security policy.

In his remarks to US think-tank the Heritage Foundation, Abbott even claimed that he had never treated the US as a foreign country.

This does not, however, mean that Mr Abbott is automatically “against” Asia or China. In fact, even during his campaign, “less Geneva, more Jakarta” was a key theme.

Unlike his predecessor, Abbott is not a “China Hand”; rather, he claims Japan is Australia’s best friend in Asia. Abbott believes that, because it is a successful democracy, Japan should play a greater role in international society and be allowed to become “normal”.

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Abbott’s conservatism is not much different from that of his political mentor, former Coalition prime minister, John Howard. In fact, before Howard began his premiership, he was even labelled a racist, and former Prime Minister Paul Keating made the judgement that Howard would never be accepted by the region.

His judgement was premature, however. During the 11-year Howard era, Australia successfully built a healthy and strong relationship with the region. On one hand, Howard was awarded the role of the US “deputy sheriff” in the region. On the other hand, economic relations with Australia’s Asian neighbours quickly advanced. During the 1999 East Timor crisis, Australia’s intervention caused a serious breach in its ties with Indonesia. Surprisingly though, Howard managed to swiftly repair the relationship and to advance it even further.

These contradictory facts are recognised by Michael Wesley as the Howard paradox. In fact, the magic behind the paradox is the Coalition’s political pragmatism.

Kevin Rudd may have had more foreign knowledge and experience than Howard and been more ambitious with his famous idea of the Asia-Pacific Community. However, his multilateral diplomacy was a bit too idealist and lacked the flexibility of Howard’s bilateralism. Mr Rudd was too confident of his China expertise to realise that the Chinese Government was actually somewhat annoyed by his self-appointed role as China’s Zheng You (or critical friend). We are not sure whether Howard also wanted to be China’s true friend, but we do know he would have liked to have been China’s best business partner.

The Abbott Government is expected to inherit the sophisticated diplomatic traditions of the Howard Government. He will strengthen the Anglosphere identity but, at the same time, will try not to miss any business opportunities with Asia, particularly China.

No matter the conservatism of Mr Abbott, or the pragmatism of the Coalition, the overall goal of Australia’s foreign policy is necessarily to serve the national interest.

So, what are Australia’s national interests? In the context of a competition between China and the US, how would Australia make its choices?

Certainly, in the foreseeable future, Australia will continue to ally itself with the US, rather than lean towards China. This stance is the result of a cost-benefit calculation.

Geographically, Australia remains far from its Western allies. Its long coastline, large amount areas of empty land and its situation within a region that has alien cultures and institutions, means that invasion anxiety never entirely disappears from the minds of Australian policymakers. For the sake of its national security, Australia must continue to show loyalty through concrete actions so as not to be abandoned by the US.

Although some thinkers, such as Hugh White, have called for reflection on Australia’s choice and beseeched Australians not to stake their future in any “Great Game” between China and the US, the sympathisers are few. The mainstream tune has not changed.

People who hold a positive view of the Sino-Australian relationship are used to drawing on trade statistics as evidence. It is self-evident that the economic relationship with China

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determines the prosperity of Australia. According to a recent report by the International Monetary Fund, Australia is more exposed to a slowing Chinese economy than any country apart from Mongolia.

But, despite Australia’s huge volumes of trade with China, the bilateral economic relationship is rather one-dimensional. The overwhelming majority of Australian exports to China are commodities. What China sells to Australia are mainly cheap consumer goods. Any complex production network is almost non-existent.

True, China and Australia have mutual investments and the flow of Chinese capital into Australia is increasing rapidly. If, however, we compare the value of Chinese investments in Australia with those of the US and UK, it is pointless to be overenthusiastic.

More ironically, as pointed out by James Reilly, a Sydney-based scholar, the more Australia depends on China economically, the higher its perception of threats will be. Therefore, Australia will naturally adopt a hedging policy by allying with the US, India and Japan to balance the influence of China.

With such a calculation, no matter which party dominates in Canberra, it will not be a simple matter to shift Australia’s fundamental strategic settings in favour of China.

Such is the understanding of the élite, but what about the public? According to a 2013 poll conducted by the Lowy Institute for International Policy, 76 per cent of the public believe that Australia’s most important economic relationship is with China. At the same time, 57 per cent of Australians are concerned about the level of Chinese investment, and believe the government has permitted too much.

Strategically, a significant minority (41 per cent) believe that China will become a military threat to Australia in 20 years’ time. Eighty-two per cent of Australians support the alliance with the US, and 61 per cent view the basing of US forces in Australia positively.

The poll results indicate that, on the one hand, the Australian public expects a stronger economic relationship with China and Asia. On the other hand, they have limited strategic confidence in China. The optimistic nature of Australians is clearly shown in the poll as well, with 87 per cent of the respondents believing that Australia can maintain a balance between the US and China without any problems.

Australians have many reasons to be optimistic. On the day following the Coalition’s electoral victory, the newly appointed Chinese Ambassador to Australia, Mr Ma Zhaoxu, quickly conveyed the congratulations of the Chinese Government to Mr Abbott. Ambassador Ma was previously the assistant minister of Foreign Affairs, which is in the rank of the ministry’s leadership. His appointment further proves that the Chinese Government attaches great importance to the bilateral relationship.

On 6 October, during the APEC summit in Bali, Chinese President Xi Jinping met with Prime Minister Abbott. President Xi again expressed his willingness to make the bilateral relationship a fine model between countries with so many differences. He argued that co- operation between the two countries not only meets the interests of the two countries, but

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also contributes to regional, as well as global, peace and development.

Mr Abbott responded that the rise of China is not a challenge, but a blessing to the world. Mr Abbott accepted Mr Xi’s invitation to visit China in the first half of next year and said he was determined to deepen and diversify economic and trade relations with China.

At the same time, however, the fifth meeting of the Trilateral Strategic Dialogue between Australia, Japan and the US convened in Bali. The issue of maritime disputes in the region was raised. The three parties opposed any coercive or unilateral action to change the status quo in the East China Sea. Obviously, the Chinese Government was not happy with that statement. A spokeswoman for the Chinese foreign ministry warned the three parties not to use their alliance as an excuse to intervene in territorial disputes. This has vividly illustrated the conflicting nature of Australia’s strategic and economic interests.

Despite some challenges in the years to come, the Sino-Australian relationship could be improved in at least the following two areas.

First, the Australia-China Free Trade Agreement negotiations must come to a conclusion. The FTA negotiations began in 2005 and have undergone 19 rounds. But, due to a significant divergence on issues of agricultural exports and investments made by Chinese state-owned companies, the process has almost stalled.

During the campaign, the Coalition criticised the Australian Labor Party for not being realistic enough about the conclusion of the FTA. The Coalition claims that it will not expect the FTA to reach the highest standard in the beginning. Political pragmatism is the key to the conclusion of the FTA.

Mr Abbott has placed a 12-month deadline on it, but the risks are still there. Since the Coalition consists of two parties, the Liberals and the Nationals, with the latter representing the interests of Australian farmers, it is highly possible that the Coalition government will encounter great resistance from the Nationals on the issues of China’s buying of Australian farmland and more open access to the Chinese agricultural market.

Second, China and Australia could work together on the major multilateral platforms. Next year, the two countries will host the Asia-Pacific Economic Co-operation forum and the Group of 20 Summit, respectively. The two countries could put a joint effort into promoting free trade and fighting trade protectionism in these important frameworks of governance at the regional and global levels.

In conclusion, China has every reason to believe that the new Australian government will make pragmatism its biggest feature at home and abroad. From now on, we may hear of fewer grand visions, such as the Asia-Pacific Community, and see more flexible and practical diplomacy. China may miss the critical friendship of Kevin Rudd from time to time, but will certainly enjoy a more stable and predictable business partnership with Tony Abbott.

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About the Author: Dr Fujian Li is an FDI Visiting Fellow and a research fellow at the East Asian Studies Centre, China Foreign Affairs University, Beijing. Fujian’s research interests include China’s regional relations and Sino-Australian relations. His new book, China’s Regional Relations: Evolving Foreign Policy Dynamics (with Mark Beeson), will soon be published by Lynne Rienner Publishers.

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Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

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