The prime minister’s visit to China is hoped to repair broken trade and economic ties but he must walk a fine line on humanitarian and security issues. By Karen Middleton.
What awaits Albanese in China
If optimism can be measured in square metres, Australia’s combined exhibition area at Shanghai’s China International Import Expo is evidence of high hopes. “Australia has taken a massive space at that exhibition,” says businessman Peter Arkell, resident in Shanghai for two decades. “Really, really impressive. Really gone for broke.”
The expo, where 250 Australian companies are displaying their wares, is the first stop this weekend on Prime Minister Anthony Albanese’s three-day bilateral stabilisation mission to China. At the annual trade show – in which Chinese President Xi Jinping takes a close personal interest – the Australian presence is designed to demonstrate both goodwill and confidence that the broken relationship with the superpower genuinely is being restored.
“I couldn’t tell you exactly what the square metreage is,” Trade Minister Don Farrell says to The Saturday Paper this week, “but it’s interesting that a significant number of the producers that are turning up there are in the wine industry, in the seafood industry – all of the areas where we are hoping to resolve our outstanding trade impediments. So, there’s I think a degree of confidence back in Australian producers about the Chinese market, and I want to build on that.”
Ending a seven-year hiatus in prime ministerial visits, Anthony Albanese arrives in China 50 years to the day since the first serving Australian prime minister to make the trip, Gough Whitlam, departed for home. As he swings through Shanghai to his Monday meetings in Beijing, Albanese is being pressed to hold firm to Australia’s policy settings on security and human rights – especially the plight of Australians in Chinese jails – as he attempts to reopen the door to free trade with 1.4 billion potential customers on the other side.
“When it comes to China, what I say is we’ll cooperate where we can, we will disagree where we must, and we’ll engage in our national interest. And I will always make representations on behalf of Australians,” Albanese said this week.
Don Farrell and Foreign Minister Penny Wong will accompany the prime minister on the Shanghai and Beijing legs of the trip, respectively. Farrell sets two unofficial tests for measuring its success, at least in relation to trade.
“More business for Australian companies into China would be test No. 1,” he says. “Test No. 2 would be further stabilising our relationship with China and continuing the thawing of relations and building on my three previous meetings with my counterpart Wang Wentao.”
Farrell welcomes the recent moves to remove Chinese impediments to Australian goods and believes those on wine and seafood will soon go too.
He adds a caveat: “hopefully”. And then a few more.
“Don’t get me wrong. I’m not saying this weekend,” he clarifies, “but I just think there’s a trend here that’s going to lead to an inevitable result, which will be the removal of all of these trading impediments. I think that’s good. At least that’s what I’m hoping ... Maybe I’m just too much of an optimist.”
The stream of qualifiers illustrates the uncertainty that still surrounds possible outcomes of this visit. The Australian side wants to set expectations low. Given the significant issues on which the two countries still disagree, it seems unlikely a joint statement will be issued, though that is not confirmed.
After such a long freeze in diplomatic relations, the impact on trade is not the only measure of success. Australian National University economics professor and China specialist Jane Golley sets a more basic benchmark.
“I think just the fact that the visit is taking place … that is already a success after so long without a meeting at that top level,” she says.
Within the Australian government, there is also a view that even just the optics of Albanese meeting Premier Li Qiang and President Xi Jinping may have an impact within China, sending a message to Chinese businesses that Australia is no longer on the outer. The same goes for Chinese tourists, who have already been streaming back since their government lifted restrictions for group tours to Australia earlier this year.
“I think a successful meeting between the two leaders will lead to an increased level of demand from Chinese travellers to come to Australia,” Farrell says.
Some who are more suspicious of China’s motives, including former prime minister Scott Morrison, warn Albanese against becoming a propaganda tool. “I have no doubt that the prime minister will go with the best of intentions to present Australia’s national interest,” Morrison said this week. “That said, he cannot control what the Communist Party in China will do with that and how those images will be used.
The public relations value certainly cuts both ways, judging by a recent week-long exchange for Australian journalists, in which I participated. The Chinese government’s desire to be seen to host seemed greater than its desire to engage at high levels. In Beijing a Chinese official chose to accentuate the positive in relation to Australia, suggesting the two countries’ common interests were grounds for restoring ties after years of distance and public brawling.
“We both share this Mother Earth,” the official said through an interpreter, when asked to describe the state of the China–Australia relationship. She listed internet technologies, “cyber-related issues”, globalisation and the effects of Covid-19 among factors affecting nations across the world and China’s ties with them. “At this stage of history, maybe some distant countries – two distant countries – can become close friends, or maybe some close [friends] like our neighbouring countries may become distant. It’s just like tides and waves. Our relationship has some ups and downs, but we are all very concerned about the common interests of human beings … So I am really optimistic. I am really positive about our relations.”
On our visit to Renmin University’s Chongyang Institute for Financial Studies in Beijing, Chinese academics suggested Australia could act as a kind of mediator between China, the US and Europe.
Lowy Institute professor Richard McGregor says he “wouldn’t overrate that possibility”, given Australia’s alignment with the US. “The Americans wouldn’t think we had any role other than perhaps to convey a few messages,” the China specialist says. “A middle man? No way.”
The Australian government is also not embracing that suggestion, although some concede Australia’s closeness to the US may prove useful to China for “practising” its messaging and gauging the reaction.
Neither side needs a messenger, however. As Albanese left the White House last week, Chinese foreign minister Wang Yi was arriving, and later this month, Xi and Biden will meet at the Asia Pacific Economic Cooperation (APEC) summit in San Francisco.
McGregor says he expects China’s leaders will bring their own to-do lists to meetings with Albanese, Wong and Farrell, which will include seeking Australian support for their entry to the Comprehensive and Progressive Agreement for Trans-Pacific Trade Partnership (CPTPP). Australia will likely emphasise the need for unanimous agreement of existing members and note the pact’s high bar for trade behaviours.
“They want us to be supportive of their desire to enter the CPTPP or, if not supportive, then not obstructionist,” McGregor says. “They want us to have a more open foreign-investment regime for Chinese companies, particularly in critical minerals and the like, and they also want us to keep quiet about issues like human rights issues and issues like the South China Sea. So I would say we’re going to disappoint them on all fronts.”
US President Joe Biden’s warning to Albanese last week to “trust but verify” what he hears in Beijing was among the first flows from a firehose of advice not to be bewitched by Chinese assurances, or to put trade ahead of security interests.
“We shouldn’t acquiesce on core strategic interests for the sake of trade – and indeed we haven’t,” says McGregor. “But trade is important. I think some of the hawks tend to forget that you won’t have a foreign and defence policy unless you have a strong economy. So trade is part of that.”
Hawkish think tank the Australian Strategic Policy Institute (ASPI) had strong warnings for Albanese as he prepared to travel. Executive director Justin Bassi, a former Coalition adviser on foreign policy, told ABC Radio National on Wednesday the Labor government’s approach of “lowering the rhetoric” while maintaining existing security and defence settings had been largely effective – so far.
“I do think there’s a risk that lowering the rhetoric can turn into silence,” Bassi said. “It is important to be clear-eyed that while that engagement is very important – it enables conversation at that top level – the visit should be done with complete due diligence to ensure we do not return to an era where the economic interests that we have override our security interests.”
The prime minister has used similar language himself.
“We are clear-eyed about this,” Albanese declared in a speech at the US State Department last week. “We are two nations with very different histories, values and political systems.”
Human rights advocates are also pressing Albanese to raise concerns about the situation in Xinjiang province and the circumstances of the Uighur people there, along with the plight of Australians held in Chinese jails.
The federal opposition is doing the same but with an eye to domestic politics.
“He cannot trade off silence on human rights for a ticket to Beijing,” the Coalition’s deputy leader, Sussan Ley, said on Wednesday.
The family of detained Australian writer Yang Hengjun, who have stayed quiet about his situation for years, made public a letter they wrote to Albanese just days before his departure.
“The risk of being left to die from medical maltreatment is especially clear to our father because he has seen it happen to his friends,” Dr Yang’s two sons wrote. “We request that you do all in your power to save our father’s life and return him immediately to family and freedom in Australia.”
Advocates for Australians jailed for activism in Hong Kong, along with supporters of more than a dozen Australians detained in China for other alleged offences, also called for their cases to be raised.
Needless to say though, the economic relationship is very much the driver of the new “stabilisation” effort on both sides, with China’s economy under considerable pressure on a range of fronts. In Beijing, the Chongyang Institute academics said their own analysis of data on Chinese exports to the US for September, which The Saturday Paper has been unable to verify independently, showed a 5 to 6 per cent drop on the previous month. While the same data suggested exports to Australia were mainly steady, senior fellow Liu Zhiqin said they also suggested early signs of a downturn, blaming in all cases what he called the US “full-sized decoupling” from China.
Liu argued the US-led push to diversify trade markets and protect supply chains – an objective Australia shares – had led to American businesses pressuring Chinese suppliers to shift some of their production offshore. His colleague Professor Gong Jiong, of the University of International Business and Economics, called it “coercion”.
“This is coming from American private companies but definitely help for it is coming from the State Department,” said Gong, who cites the US security posture as another likely motivation.
Jane Golley says there is a double standard in how Australia views China’s behaviour compared with the US. She also uses the word “coercion”.
“I absolutely think it is,” she says. “But you’re not popular here if you say that.”
A spokesperson from the US embassy in Canberra rejected the descriptions and disputed the trade figures, pointing to US figures to August that showed imports from China holding steady.
“We are not seeking to decouple our economy from China’s,” the spokesperson said, noting that annual two-way trade was more than US$750 billion and most of that did not involve national security concerns.
“We are seeking a healthy economic relationship with China because we believe that a growing China, one that plays by international rules, is good for the United States, Australia and the world. When we have taken action to safeguard certain technologies from the [People’s Republic of China] military and security apparatus, those actions are driven by straightforward national security considerations and not by a desire to gain a competitive economic advantage. When possible, we coordinate with allies like Australia in the design and execution of those policies.”
Australia’s re-engagement comes as China faces other pressures on its economy. The Chongyang Institute scholars described its ageing population and low fertility rates affecting consumer spending, or aggregate demand. Gong Jiong called it “a huge problem” that was weighing on China’s growth.
“It’s more and more becoming like a developed country where 3 per cent or 4 per cent growth is considered growth, in a developed country context,” he said. “China’s rapidly moving into that camp.”
Journalist-turned-analyst Zhou Rong highlighted further labour force challenges. He said the use of robotics was expanding rapidly, not only in manufacturing but in the service industry. But the bigger issue, in his view, is that children no longer want to work as their parents did and are pursuing other income sources.
“Especially TikTok or something like that,” Zhou said. “Easy ways to get easy money. So it’s very difficult for China right now to find high-quality labour.”
Signs of these challenges are as evident in China’s major cities as the rapid modernisation and growth of recent years. In hotels, robots are replacing people delivering room service. And on Beijing’s boulevards at golden hour, young women strike pouty poses for their social media feeds, turned out in traditional dress, model-grade make-up and reflector sunglasses, and brandishing toffee fruit skewers and selfie sticks.
For the challenges they belie, these are also signs of a prosperous country – albeit one where the freedoms of fashion and culture do not extend to speech and especially not dissent, and social cohesion is achieved through surveillance and strict centralised control.
In Shanghai, the view from the roof of the decadent old Peace Hotel, which takes in the mega skyscraper Shanghai Tower, shows the breathtaking extent of the city’s urban expansion. Don Farrell, a big fan of China’s commercial metropolis, says he is looking forward to seeing the hotel after its renovation, which his Chinese counterpart oversaw as the then mayor of Shanghai. Farrell has been promised a tour to admire its restoration to the full grandeur of its 1930s heyday. But the minister has been warned that, along with its magnificent pressed metal friezes and art deco fixtures, the restored Peace Hotel has very expensive drinks.
In China, peace comes at a price.
This article was first published in the print edition of The Saturday Paper on November 4, 2023 as "What awaits Albanese in China".
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