The Issue
Relations with China

Australia’s relationship with China is strained. The decision to bar the Chinese tech company Huawei from future Australian 5G infrastructure because of security concerns has angered Beijing. Despite a reset in relations late last year, some Chinese ports are delaying imports of Australian coal. The People’s Republic of China (PRC) is our largest trading partner, and its influence in our region is increasing. Whichever party wins government will be keen to improve the relationship.

Relations with China
The Government

The Liberal–National Coalition anticipates increasing US–China competition and tension, particularly in the Pacific. However, it also calls for a continued partnership with China while recognising that the PRC is altering the balance of world power more than any other nation.1 The Government has announced a $44 million national foundation for Australia–China relations in a bid to build greater understanding of the country.2

Scott Morrison’s address on Asia

Nearly one-third of all Australia’s exports go to China, while almost one-fifth of our imports come from the PRC3
Relations with China
The Opposition

The Australian Labor Party stresses the importance of the relationship with China and has criticised the Coalition for the stridency of its rhetoric over Beijing. It concedes that the different styles of government between the two countries are likely to affect the nature of interactions, but Opposition Leader Bill Shorten has said: “We won’t view China just through the strategic prism of worst case scenario…We’ve got to view China as more than just a threat.”4

Bill Shorten’s foreign policy vision

The Australia–China trade relationship is much deeper than just goods. Service exports are also important, particularly education and tourism. Chinese tourists spent approximately $11 billion in Australia in the last financial year.5 Chinese education-related personal travel exports were estimated at around $10 billion.6

In 2015 Australia and several other nations joined the Chinese-led Asian Infrastructure Investment Bank, a potential rival to the World Bank. Seventy nations are now members of the AIIB.

Relations with China
What Our Expert Says
Richard McGregor
Senior Fellow
The bigger unknown is Bill Shorten, who has had little to say on foreign policy

Superficially, Coalition and Labor policies on China and the region are broadly similar. After partisan tussles in 2017, both major parties supported the anti-foreign interference laws. Both have been critical of China’s policies on the South China Sea and, to a lesser extent, China’s suppression of the Uighurs in Xinjiang. Both support vigorous economic engagement with China, as would be expected for a country that is such a valuable trading partner. But they also support agreements and institutions designed to balance or push back against Chinese power such as the US alliance, the revamped Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and other trade liberalisation deals (although Labor wants to modify parts of those trade agreements).

Labor has been critical of the Coalition’s handling of China policy and promises to be more disciplined in its public utterances. That will be tested in office. Shadow Foreign Minister Penny Wong and Shadow Defence Minister Richard Marles have managed to work out a joint position on core issues in their portfolios after early tensions between the pair. Shadow Treasurer Chris Bowen, who remains close to Paul Keating, has a vision of much greater engagement with Asia, including China, something that will be difficult to push forward in office if relations with Beijing remain tense. The bigger unknown is Bill Shorten, who has had relatively little to say on foreign policy. Mr Shorten is well schooled in the US alliance while saying Australia should not pre-emptively treat China as hostile. Ultimately, he would set the tone and direction of foreign policy as prime minister, should he be elected. Mr Shorten is also a dealmaker, which is fraught territory when it comes to China.