On 4 January 1947, the ROC Navy minesweeper ROCS Yung-hsing 永興 and the Landing Ship Tank ROCS Chung Jian 中建 sailed into the South China Sea. They landed ROC troops in the French claimed Paracel Islands and continued on their way.[1] A month later, in February 1947, the Nanjing government published a map based on the voyage, and earlier maps and claims from the Qing dynasty and ROC period. The map had a U-line with eleven dashes that delineated the claim over the South China Sea.[2] The original maps accompanied the retreating ROC forces to Taiwan in 1949 and are now stored in the National Archives in Taipei.[3] The claimed territory and seas in the South China Sea was subsequently incorporated into the ROC Constitution as part of Chinese national territory.

To this day, Taiwan remains firm in its claims to the South China Sea. They have been historically justified on the basis that, as there was no United Nations Convention of the Law of the Sea (UNCLOS) in existence in 1947, it was legitimate for the ROC to claim the South China Sea territories and waters based on the historical connections of these with China. According to the Institute for National Defense and Security Research (INDSR), a Taiwanese think tank, there was no legal impediment to the claim in 1947 and, for a long period, there were no challenges to the ROC’s claims from other countries.[4] They were largely ignored – except by the People’s Republic of China (PRC), which concurred with them.

The ROC maps and claim to sovereignty constitute the basis of the PRC’s assertion of sovereignty over the South China Sea and their ‘Nine-Dash Line’ – the PRC deleted two of the ROC’s lines in the 1960s that were proximate to what was then North Vietnam. Like Taipei, Beijing’s claims are based on Chinese historic claims and possession of the islands. It was only in the 1970s that other countries started challenging these claims.

Other Claimants to the South China Sea

In 2013, The Philippines initiated an arbitration case against the PRC under Annex VII of the United Nations Convention of the Law of the Sea (UNCLOS) concerning China’s claims in the South China Sea. The PRC refused to participate in the arbitration and Taiwan was excluded as it was not a member of UNCLOS. In the face of growing claims and actions by other claimant countries including Vietnam, Malaysia and the Philippines in the 2010s, the Ma Ying-jeou administration agreed to maintain a low profile and neither assert its claims openly nor walk away from them.[5] Taipei was aware that its claims displeased neighbouring countries and were not well received by the United States as they justified Beijing’s actions and claims. The Ma administration was at the time asserting its sovereignty over the Japanese administered Senkaku or Diaoyutai 釣魚臺 Islands, which were also claimed by Beijing (where they’re known as the Diaoyu 钓鱼 Islands). In June 2020, President Tsai Ing-wen reiterated Taiwan’s claims to sovereignty of the Diaoyutai/Senkaku Islands.

On 12 July 2016, the Permanent Court of Arbitration Tribunal ruled that the PRC’s historic claims over maritime areas inside the Nine-dash line had no lawful effect and there was no legal basis for China to claim historic rights to resources within the sea areas falling within the line. In addition, it ruled that UNCLOS did not provide for a group of islands such as the Spratly Islands (known in Chinese as the Nansha Archipelago 南沙群岛) to generate maritime zones collectively as a unit.

Although not a party to the case, the ruling had an effect on Taiwan’s claims and the islands it occupied such as Itu Aba/Taiping 太平 Island, the largest of the Spratly Islands, which is also claimed by the PRC, Vietnam and the Philippines. The ruling found it to be a rock, not an island. In response, the Tsai Administration asserted that Taiwan ‘holds sovereignty over the South China Sea islands and their surrounding waters’. It objected that it had not been given the opportunity to provide information to the tribunal. It insisted that Itu Aba/Taiping Island, which possesses freshwater wells, fertile soil, and on which grow bananas, coconuts and other crops and where livestock is raised to support the 150 to 200 members of the Taiwan Coast Guard who are stationed there, clearly satisfied the definition of an island under UNCLOS.

Following the 2016 Philippines South China Sea Arbitration, the United States put extra pressure on Taiwan to distinguish its claims to from those of China.[6] This was a clear recognition that the PRC’s claims were in fact established on the same basis as the 1946-1947 ROC claims. In recent times, the Philippines has also actively challenged Chinese claims around Scarborough Shoal and the submerged Second Thomas Shoal; Manila grounded a dilapidated Philippines vessel from World War Two at the latter, where it is guarded by Philippines marines.[7]

In 2015, Beijing invited Taipei to participate in joint activities in the South China Sea. The Ma administration declined the offer, not wishing to become too closely involved with the PRC in South China Sea. Nonetheless, there was an exhibition held in Taipei at the ROC Military College from 2015-2016 outlining the ROC’s claims to whole of the South China Sea.[8]

In 2016 following the election of Tsai Ing-wen as president, the Democratic Progress Party (DPP) transition to government team consulted the Ministry of Foreign Affairs (MOFA), the Ministry of National Defence (MND), and government and academic legal experts concerning Taiwan’s claims to the South China Sea. As a result of the team’s investigation the Tsai Administration decided not to alter Taiwan’s claims and the ROC Eleven-Dash Line remains in place today, though as a senior DPP official confirmed in July 2023, it limits its low-key claims to islands and features and their surrounding sovereign territorial waters, not the whole ‘cow’s tongue’ inside the Eleven-Dash Line. The Taiwan government has moved away from emphasising the U-shaped line and its historical waters. Taiwan does not claim the whole sea as its territory as China does. Taiwan also welcomes freedom of navigation and aviation in the South China Sea and is willing to cooperate with other claimants in search and rescue missions as well as environmental protection.[9]

The PRC and Ownership of the South China Sea

The PRC has been firm in defending its claims to the whole of the South China Sea. It has built a series of military bases on reefs and shoals throughout the region and has reclaimed over 32,000 acres of land there.[10] Beijing views control of the South China Sea as essential to its defence, national security and to its trade routes.[11] The South China Sea could easily become a ‘choke point’ for China in the event of a conflict with the United States – approximately 80 percent of China’s exports travel through these waters. In addition, a significant portion of China’s surface and submarine fleets are based on the island of Hainan, which abuts the South China Sea.[12]

Beijing constantly warns off other countries’ vessels and aircraft that infringe on their claimed territory. There remains a possibility of conflict. A scholar from the Institute for National Defense and Security Research (INDSR), a Taiwan defence think tank, said that in his view a clash between China and the United States or another country is more likely in the South China Sea than in the Taiwan Strait. In the Strait both the Peoples Liberation Army (PLA) and the ROC military have protocols to avoid a military clash. The PLA is under strict orders not use force during its military actions around Taiwan and the Taiwan Strait. On the other hand, the interactions in the South China Sea are less structured and potentially more volatile. The Chinese forces regard themselves as defending their sovereign territory against  ‘provocative’ actions by foreign vessels or planes. The potential for something to go wrong and lead to a clash is therefore higher there than in the Strait.[13]

Washington does not recognise the PRC or ROC’s claims, or those of other claimant states such as Vietnam and the Philippines. The United States has taken the position that its ships can sail wherever they are legally entitled to sail and the US Navy frequently conducts Freedom of Navigation Operations in the South China Sea to challenge these claims.[14] The United States has largely remained mute on Taiwan’s extensive claims in the South China Sea, likewise with the claims of the other claimant states in the South China Sea such as Vietnam and the Philippines. The United States sees China as the problem and its adversary in the South China Sea. This suggests that US actions in the South China Sea are primarily part of its competition and confrontation with China as well as asserting the right of the US Navy to sail anywhere at any time. Australia does not recognise the Chinese claims and has criticised Chinese claims and actions. Australia’s actions in the South China Sea, while based on UNCLOS principles (Australia is a signatory to UNCLOS), in effect support the United States’ policy of confrontation and containment.

Who Owns the South China Sea?

According to senior Taiwan government officials, Taiwan has not relinquished its South China Sea claims — it controls Itu Abu/Taiping Island and the Pratas/Tungsha 東沙 Islands — partly because to do so would greatly anger Beijing. It would undercut their claims, which are based on the ROC’s historical claim, and potentially lead to action against Taiwan. Taiwan also adheres to the Nine-Dash Line claim because to give it up would be seen by China as a move away from a One China position. One Beijing official told a senior Taiwanese official that Taiwan abandoning its South China Sea claims would be worse than Taiwan declaring independence.[15] The PRC’s 2005 Anti-Seccession Law explicitly states that any move to change the ROC constitution or relinquish Chinese territory would met with force by the PRC to maintain ‘national unity’.

A scholar from INDSR said the PLA has no interest in seizing the ROC-held Itu Abu/Taiping Island in the Spratlys although it could easily do so. In China’s eyes, the ROC resence on Itu Aba/Taiping Island legitimises their assertion of the legitimacy of the Nine-Dash Line. Besides, if the PLA were to attack and seize Jinmen, Mazu and Itu Aba/Taiping Island, which it probably could do quite easily, this would not facilitate a military takeover of the main island of Taiwan but could trigger a declaration of independence by Taiwan and war. [16]

For Taiwan to relinquish its South China Sea claims would require amending the ROC constitution. This would challenge Taiwan’s political and constitutional identity as the ROC. Taiwanese domestic politics mean that any Taiwan government that gave up territory would be severely criticised by the Taiwanese public and media for setting a bad precedent regarding the rest of the territory under the administration of the ROC.[17]

Will Taiwan Stand By Its South China Sea Claims Long Term?

One of the paradoxes of the South China Sea disputes is that Taiwan maintains the same claims as the PRC. While it is less aggressive and limits the extent of its claim, like Beijing, Taipei still claims the whole of the South China Sea, the Spratlys and Paracels, and deploys its military to occupy the largest land mass in the Spratlys. Beijing’s claims are based on those of the ROC: both assert historical Chinese possession of the islands. Taiwan is geographically at the centre of the disputed area but due to its limited diplomatic and international political status it is largely ignored. The United States would probably like to see Taipei give up its claims, which would undermine those of Beijing, but will not push the latter at this time. There is little evidence that Taiwan itself would walk away from its claims either. National pride, the optics of domestic politics and potential problems with Beijing make it near impossible for Taipei to cede any of its claimed territory, and this is unlikely to change should another party occupy the Presidential Palace after the presidential elections of January 2024.

Notes

[1] Bill Hayton, The South China Sea: The Struggle for Power in Asia, (New Heavin: Yale University Press, 2014), pp62-63.

[2] Ibid, pp.58-60.

[3] The author was invited to inspect a copy of the original  maps in Taipei in 2013.

[4] Meeting with Dr Lee Chechuan from the Institute for National Defense and Security Research (INDSR) on 5 July 2023.

[5] Meeting with Dr Lee Chechuan from the Institute for National Defense and Security Research (INDSR) on 5 July 2023.

[6] Meeting with Dr Lee Chechuan from the Institute for National Defense and Security Research (INDSR) on 5 July 2023.

[7] Brendan Taylor, The Four Flash Points How Asia Goes to War, (Melbourne: La Trobe University Press, 2018), pp.97-98; pp.104 -108; p.122.

[8] Meeting with Dr Lee Chechuan from the Institute for National Defense and Security Research (INDSR) on 5 July 2023.

[9] Meeting with Senior Taiwanese Official on 9 July 2023.

[10] Taylor, The Four Flash Points How Asia Goes to War, p.107.

[11] Geoff Raby, China’s Grand Strategy and Australia’s Future in the New Global Order, (Melbourne: Melbourne University Press, 2020), pp.8-10.

[12] Taylor, The Four Flash Points How Asia Goes to War, pp.112-114.

[13] Meeting with Dr Lee Jyun Yi from the Institute for National Defense and Security Research (INDSR) on 14 July 2023.

[14] Taylor, The Four Flash Points How Asia Goes to War, pp.114-116; pp.125-126.

[15] Meeting with Senior Taiwanese Official on 9 July 2023.

[16] Meeting with Dr Lee Jyun Yi from the Institute for National Defense and Security Research (INDSR) on 14 July 2023.

[17] Meeting with Senior Taiwanese Official on 9 July 2023.

The post Taiwan’s South China Sea appeared first on The China Story.

Chief among these was brokering a deal between Saudi Arabia – a long-time staunch US ally – and Iran on 10 March 2023 in Beijing for the two countries to restore diplomatic relations. This achievement shocked Washington. The United States had long been dominant external force in the Middle East and had brokered key developments there from the Camp David Accords in 1978 to the Oslo Agreement between Israel and the Palestinian Liberation Organisation (PLO) of 1993. The last three years had seen the Abraham Accords where the United States brokered the establishment of diplomatic relations between Israel and Bahrain, the United Arab Emirates (UAE), Morocco and Sudan.

China, a long-time observer and trader in the Middle East, is now suddenly a key player and peacemaker in the region, a mark of its rising position and influence in the world. The Saudi-Iran deal signals that the United States cannot take its dominance in the diplomatic sphere for granted. Many other countries are prioritising good relations with Beijing and hedging their diplomatic strategic bets.

This has been most marked in the Global South, particularly in the Middle East, Africa and Latin America. In South East Asia, much of ASEAN seeks to avoid choosing between China and the United States as tension has developed between the two major powers. Other regional players, including Australia and Japan and increasingly the Republic of Korea (ROK) and the Philippines have strengthened their alignment with US strategic goals while continuing to build and stress the importance of economic and other ties with China. Though China’s role as a de facto supporter of Russia in the Ukraine war has strained relations with much of the European Union, during his 5-7 April 2023 visit to China, French president Emmanuel Macron said that Europe should not automatically follow the United States get ‘caught up in crises that are not ours’. On the subject of Taiwan, Macron advocated a course of ‘strategic autonomy’ for the European Union.

A second significant example of the development of an alternative non-Western grouping is the BRICS, comprising of the large developing countries Brazil, Russia, India, China and South Africa. At the BRICS meeting in South Africa in late August, the BRICS grouping announced the admission of six new members in a decision widely interpreted as an attempt to reshape the international order and provide a counterweight to the United States and its allies. From January 2024, Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE) will join the grouping in a move described by China’s President Xi Jinping as ‘historic’. The significance of this expansion is the development of a non-Western grouping with significant political and economic power and with China as one of its central members. According to the International Monetary Fund (IMF), the BRICS grouping will collectively account for 32.1 percent of global Gross Domestic Product (GDP) in 2023, more than the G7’s share of 29.9 percent of global GDP. With addition of the six new members in January 2024, the GDP of BRICS will grow to 36 percent of global GDP. The grouping with its focus on de-dollarisation, promotion of local currencies for global trade and finance, and the admission of new members, mostly accords with Beijing’s agenda.

China’s Diplomatic Initiatives

A suite of major initiatives serves as the basis of China’s new approach to diplomacy. These include the Global Security Initiative (GSI), the Global Civilisation Initiative (GCI), the Global Development Initiative (GDI) as well as the Belt and Road Initiative (BRI). The GSI opposes Western ‘hegemonic’ dominance in the areas of international security, promoting a central role for the United Nations and emphasising non-interference in other countries’ internal affairs and sovereign equality under international law. The multi-billion dollar BRI launched by Xi Jinping in 2013 aims to improve China’s connectivity with the world through infrastructure and investment. The United States and other Western countries have criticised the BRI as merely a mechanism to spread China’s geo-political and financial influence throughout the world. The success of many of the projects have been mixed, but it is certain that the BRI has expanded China’s influence, especially in the Global South. Of the 152 countries that signed BRI memorandums of understanding, 52 are in Africa, 40 are in Asia with the rest in the Middle East, Latin America and Europe. The BRI also appears to have increased Chinese exports to the member countries.

Taken together, these initiatives aim both to enhance China’s global influence and build a diplomatic and security architecture to rival the US-led system of multilateral alliances, and institutions. They also aim to enhance China’s role as mediator or peacemaker in regional conflicts.

Other important bodies that are non-Western focused in which China plays a significant role in include BRICS Plus, the Shanghai Cooperation Organisation (SCO), and a range of summits that China holds with groupings such as the China-Arab League Summit, the China Gulf Cooperation Council (GCC) Summit and the China-Africa Summit.[1] There is also the Asia Infrastructure Investment Bank (AIIB), which China put forward to the World Bank in 2016; by 2023, it had over one hundred members, including Australia, a Triple-A rating and some US$100 billion in capitalisation. These are all part of a suite of organisations and initiatives which are beyond US and G7 influence. The GSI and the other initiatives together with the BRI provide an alternative to the US-led rules-based order and are attractive to many countries especially in the Global South.

Riyadh and Tehran to Beijing

In the past, China was satisfied to trade and observe in the Middle East, an area where US influence was politically and militarily dominant. However, China is now the largest trading partner of most GCC countries, including Saudi Arabia. China has backed this economic influence with active diplomacy. Xi Jinping made a high-profile visit to Riyadh in December 2022, during which he participated in the first China-GCC Summit on 9 December and the first China-Arab States Summit that same afternoon. Most participants at these meetings were expressly focused on building relations with Beijing as a hedge against dependence on the United States. Most countries, however, were conscious that the United States was still the most significant defence partner in the region. There have also been several announcements recently of large scale Saudi-Chinese investment deals worth more than US$10 billion. On 5 September 2023, the Bank of China (BOC) opened its first branch in Saudi Arabia in a move to expand the use of yuan in the growing number of economic deals between the two countries. Saudi Arabia is China’s largest source of crude oil imports, with 87.5 million metric tonnes (641 million barrels) shipped in 2022. BOC is the second Chinese bank to open branches in Saudi Arabia after the Industrial and Commercial Bank of China (ICBC), which has branches in Riyadh and Jeddah. Iranian President Ebrahim Raisi went to Beijing for 14-16 February 2023.

Many Middle Eastern countries, including Saudi Arabia, admire China’s four-decade record of deploying state capital to achieve profound economic change while tightly managing social and political change. China’s experience challenges US insistence that only liberal systems can produce economic growth and stability. As Saudi Arabia’s largest trading partner, with growing economic influence in the Middle East and friendship with Iran, China was a logical partner for the mediation process.

China the Peacemaker?

Chinese officials describe facilitating the rapprochement between Saudi Arabia and Iran as a successful example of the GSI at work. The discussions that led to the 10 March 2023 accord began in the Middle East. Iraq and Oman hosted talks between 2020 and 2022, but the accord needed China’s imprimatur to finalise the deal. It was impossible for Washington to plays its traditional role of mediator in this case because, after four decades of mutual hostility, the United States still does not have diplomatic relations with Iran. Another factor was that, under Crown Prince Mohammed bin Salman, long-term US-ally Saudi Arabia is seeking a more independent foreign policy, and rebalancing its relations with the major powers including China.

Additionally, in contrast to the Trump administration and family’s close relations with and support for the Saudi royal family, which didn’t waver even after evidence linked the Crown Prince to the killing of journalist and US resident Jamal Khashoggi in 2018, the Biden administration has hardened its policy towards Saudi Arabia. While campaigning in 2019, Biden said he would make Saudi Arabia a ‘pariah’. When the Saudis cut oil production after Russia’s invasion of Ukraine, fuelling global inflation, Biden threatened ‘consequences’. US policy and rhetoric only helped to open the door for Beijing. Iran has good relations and a strong economic relationship with China. A close economic relationship with both countries based both on economics and China’s new ambitious foreign policy made China the natural partner to secure the deal. In addition, China’s new influence in the region was achieved without the use of military coercion, in contrast with the US record of the use of military force and coercion to resolve differences with Iraq, Iran, Lebanon and other countries.

China has relished its role bridging the gap between Saudi Arabia and Iran. Beijing continues to seek to pay the role of mediator and peacemaker. It has put forward a peace plan for the Ukraine War and is seeking to play a role in the Israeli-Palestinian conflict, although there are serious doubts it can achieve much in either case.

A Chinese emissary, Ambassador Li Hui, visited Kyiv and Moscow from 14 to 18 May 2023 with a plan announced by Beijing in April to end the fighting between Russia and Ukraine. As the plan did not call for the withdrawal of Russian troops from Ukrainian territory, Ukraine rejected the proposal. The proposal was politely received in Moscow but not accepted by President Putin. Although the Chinese intervention was broadly welcomed it did not provide a way forward for the ending the war. Nonetheless, again it was an example of China projecting itself on the global stage as a positive player.

On 18 April 2023, China offered to broker peace talks between Israel and Palestine. On 13-15 June 2023, Palestinian National Authority President Mahmoud Abbas visited Beijing, where he welcomed China’s involvement. Israeli Prime Minister Benjamin Netanyahu announced on 26 June 2023 that he will make his fourth visit to China as prime minister at the invitation of Beijing before the end of 2023. However, the Israeli-Palestinian dispute is a vexed one and despite having good relations with both Israel and the Palestinians, the Chinese are unlikely to make much progress. The gesture is undoubtedly also aimed at strengthening the positive perception of China in the Arab World and the Global South.

China’s Power is Rising Globally

China’s power and influence is also rising in Central Asia. On 18 May 2023, at the inaugural China-Central Asia Summit attended by the leaders of Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan and Uzbekistan, Xi Jinping announced 26 billion yuan (US$3.8 billion) of loans, financial support and non-reimbursable funds for the five Central Asian republics and a new gas pipeline to China from Turkmenistan. Xi also met individually with each of the five presidents. Each of the five republics are active members of the BRI. Bilateral trade between China and the Central Asian republics reached US$70.2 billion in 2022. As China’s power has risen in Central Asia, it has remained careful to not cut across vital Russian interests. China’s centrality to the power structure in Central Asia is also ensured by the Shanghai Cooperation Organisation (SCO) and the fact that both Russia and China face competition from the US-led West. China’s partnership with Russia is based on common interests and economic complementarity that has become even more important to Russia since the start of the Ukraine war. Russia is increasingly becoming a junior partner in what is proving nonetheless a durable relationship.

From 12 to 17 April 2023, Brazilian President Luiz Inácio Lula da Silva visited China and called for an end to US dollar dominance of the world’s financial systems. This reflected a growing trend towards countries moving to reduce their dependence on the dollar as a reserve, exchange or accounting currency in certain areas of the world. For countries in the Global South including Brazil, this is driven by efforts to avoid US sanctions and the Biden administration’s control over microchips. In reality, however, only a small percentage of the world’s financial system uses the Chinese yuan and other non-Western currencies as the basis for reserves and exchange. Nonetheless, there is some appetite in parts of the world for moving beyond the control of the US dollar and to adopt the yuan.

China Hasn’t Surpassed the United States yet

Chinese activism is based on a sense that the global role of the United States is declining and China’s is rising. While there is some evidence of shifting strategic power balances it would be wrong to discount the remaining power and influence of the United States. President Biden has made it clear that the United States is determined to compete with China for influence and strategic power. In terms of military power and economic and financial heft, the United States remains the world’s leading power despite the rise of China, the multipolar world and groupings like the expanded BRICS. While the United States remains the single most powerful country in the world, the global strategic environment is increasingly multipolar and de-dollarisation is increasing, facts recognised by much of the world. China with its Global Security Initiative and its suite of other projects and initiatives has become a significant challenger to the US and Western hegemony in the Global South and in regions long dominated by the United States like the Middle East.

Despite the increasing multipolar nature of the world, both Beijing and Washington see their great power competition as the fulcrum of international relations as countries are increasingly encouraged to line up with one side or the other. Australia and regional countries like Japan and the Philippines have clearly declared their adherence to Washington. Many other countries especially in the Global South seek to maintain a balance between China and the United States and hedge against both countries. Other rising powers like India seek to follow their own independent strategic and economic paths and are wary to a degree of both Beijing and Washington. With a period of competition and uncertainty ahead, much of the world, especially the Global South, would welcome a world without US primacy. Perhaps the accord between arch rivals Riyadh and Tehran is a harbinger and a foretaste of the future Chinese role in a contested strategic world.

Notes

[1] Shanghai Cooperation Organisation members are: China, India, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan, and Uzbekistan.

The post From Riyadh and Tehran to Beijing: China’s Diplomatic Role in a Changing World appeared first on The China Story.

Defence Minister Richard Marles met his Chinese counterpart Wei Fenghe in June in Singapore on the sidelines of the Shangri-La Dialogue security summit, breaking a three-year freeze in official bilateral meetings. Foreign Minister Wong subsequently met her Chinese counterpart Wang Yi twice, at the conclusion of the G20 Foreign Ministers meeting in Bali in July and again on the sidelines of the UN General Assembly in New York in September. She also spoke with Foreign Minister Wang again before the Bali Summit. Prime Minister Anthony Albanese met briefly with Premier Li Keqiang at the ASEAN Summit and then with President Xi Jinping at the Bali G20 Summit. The Albanese-Xi meeting went smoothly but as expected did not produce any breakthroughs on matters of contention such as ongoing trade restrictions. The fact that these meetings took place in the margins of international conferences and there have been no visits to either Beijing or Canberra for more than three years indicates that things are not back to normal yet. The meetings do not in themselves indicate a reset of the relationship.

Although Defence Minister Marles has dropped the harsh rhetoric of his predecessor Peter Dutton, he remains a strong advocate for the US Alliance and the AUKUS agreement, which prominent Beijing think tanks have labelled provocative and destabilising and part of a ‘dangerous conspiracy’. The new government has not shifted the parameters or narrative of the Coalition’s foreign and defence policy on China.

On the other hand, the two countries have revived their Comprehensive Strategic Partnership and toned down their respective harsh rhetoric. As foreign minister, Wong has consciously focused on stabilising the relationship rather than aiming for a reset but the government has not embraced an alternative discourse to the adversarial and militarised narrative of the relationship created by the Morrison Government. The vital economic relationship has been side-lined by a near total focus on national security concerns.

What Does Australia Want?

The Australian view has been that China has changed since the high point of the relationship in 2014 and has been taking concerning actions against Australian economic interests and national security. Therefore, Australia wants China to take the lead to repair the relationship and, especially, to lift the trade restrictions imposed in 2019, after Australia enacted the Countering Foreign Interference Legislation, banned Huawei from the 5G roll out, and rejected a series of other Chinese investments. China imposed further sanctions in 2020 after the Morrison government demanded China allow an international investigation of the pandemic’s origins with the powers of weapons inspectors. It is widely held in government circles that China wanted to make an example of Australia as a warning to other countries not to cross its ‘red lines’. The view in government circles is that for any progress in the relationship, China needs to take the lead and to offer real concessions that benefit Australian interests, not just expressions of friendship or one-sided offers that only favour China.

What China Wants

The Chinese position is that Australia is responsible for the deterioration of relations. In his meetings with Minister Wong, Foreign Minister Wang Yi called for ‘concrete actions’ by Australia to match the change of rhetoric. At his Chinese National Day speech on 30 September 2022, Ambassador Xiao made a similar appeal. Another Chinese diplomat said to the author that all the Albanese Government had done so far was say ‘nice things’ (hao hua 好话) but no real action has been taken by Australia to mend the relationship. China has been keen to blame the Australian government and media for maintaining a hostile anti-China narrative.

Ambassador Xiao Qian in his speech to the National Press Club on 10 August 2022 stressed that Australia needed to change its discourse about China from a narrative of threat to a narrative of cooperation. The two sides should adopt positive policies towards each other, he said, ‘to seek common ground and properly handle their differences’.

In meetings with the author and Australian officials, Ambassador Xiao has stressed that China has been a key economic partner for Australia, especially since the Great Financial Crisis (GFC) of 2008-2009 — when Beijing embarked on a massive infrastructure-building drive that relied on Pilbara iron ore, creating an unprecedented boom in Australia’s mining profits — and the implementation of China Australia Free Trade Agreement (ChAFTA) in 2014. The measures that China had taken against Australia occurred in response to Australian actions against China, such as the banning of Huawei from the 5G roll out, the call for a COVID inquiry and other hostile rhetoric towards China.

Ambassador Xiao further insisted that China is not a military threat to Australia and has no intention or capability to attack Australia. This does not seem to take into account the fact that in recent times there have been encounters between the Australian military and the PLA in which the Australian side has accused China of aggressive action. Xiao has maintained that China’s primary interest is to improve the life of the Chinese people and develop economic relations with its partners, such as Australia. Xiao has also said that Australia misunderstands the Taiwan issue and stressed that China is committed to peaceful reunification: Taiwan’s status and history, he argues, is very different from Ukraine’s. Yet he has also reiterated that China ‘will not renounce the use of force’ and that it was ready to use ‘all necessary means’; he also said that advocates of Taiwan independence would be ‘punished’ and other Taiwanese ‘obligated’ to acquire a ‘correct view of China’. His words were widely noted in Australia.

In conversation with the author, Xiao was confident that in the long run relations could improve, but Australia needed to view China as a partner not an adversary.

Points of Contention

Although neither Australia nor China have budged on their respective statements of fundamental national interests, neither country has ruled out improving relations. The problem is the route to get to this goal. Senior officials believe that there is a path forward and it remains in our interest to find a working solution to the relationship with our largest trading partner, one that can return our relations to the level enjoyed by our Quad and AUKUS partners. To do so Australia and China would need to address four major contradictions in the relationship.

The first is rhetorical. The last three years saw diplomatically damaging rhetoric coming from both Beijing and from Canberra. The rhetoric has softened on both sides and this has made basic cooperation and interaction, such as meetings at both the ministerial and leadership level, possible.

The second is economic. China remains Australia’s number one trading partner by far despite the tensions in the relationship and strategic threat China poses to Australia. In 2021 two-way trade in goods and services grew 14.6 percent to reach AUD 282 billion, which was 31 percent of our total trade; by October 2022, that had reached 32 percent. Our exports to China grew by an equally impressive 18 percent to reach AUD 189 billion, representing 36.4 percent of total exports. Trade with China provides a level of prosperity for Australia that could not be replicated by any other market. Two studies by the Department of Foreign Affairs and Trade (DFAT) and Treasury have confirmed that no other market could replace China as a market for Australian commodity exports — China’s need to buy from Australia and Australia’s to sell to China gives leverage both ways and helps to avoid a total breakdown in relations. The Australia China Business Council reports that despite the political tensions, Australian and Chinese business were getting on with the good work of ensuring trade and Australian prosperity.

Chinese sanctions, however, have damaged selected industries including seafood, wine and barley. Some of these losses have been recouped in new markets but often at the cost of lower prices. Australian business has also incurred intangible losses and opportunity costs, such as missed investment opportunities, loss of future expansion in the vast Chinese market and the costs of finding new markets.

China claims to be the victim of Australian sanctions, especially through investment restrictions and anti-dumping policies. The Chinese Embassy has claimed from the start of 2019 up to March 2022, AUD$370 million of Chinese investment has not gone ahead due to changes to the Australian foreign investment regime. This has included everything from the high-profile ban on Huawei in the 5G roll out to the Coalition government’s declaration that China’s Mengniu plan to buy Lion Dairy in 2020 was ‘contrary to the national interest’. The Chinese claim that such decisions are vindictive, discriminatory and contrary to the spirit of ChAFTA. The Huawei decision is widely viewed in both China and in DFAT as the real watershed in the deterioration of the bilateral relationship. China would like the Huawei ban lifted and has continued to agitate for that outcome. The Chinese have also focused on the anti-dumping measures taken against China where the imbalance is 111 to 3. DFAT is confident that Australia can win the barley and wine anti-dumping cases brought by China.

A third area of contention is around human rights and consular issues. These are long term irritants in the relationship. The Chinese side prefer human rights concerns and consular issues to be handled ‘under the table’ or confidentially between the two countries, not through public statements. In the terms of human rights issues, the Chinese side favour a structure similar to the bilateral Human Rights Dialogue which ran from 1997 to 2016, in private with Australia, avoiding (from its perspective) unnecessary public criticism of China’s human rights breaches. As Ambassador Xiao said in his speech to the National Press Club, ‘differences should be handled in a proper manner.’ It is the Chinese position that human rights have been weaponised as part of a negative political discourse against China, which ignores China’s real successes in areas it defines as human rights such as lifting a billion people out of poverty.

Several high-profile consular issues remain unresolved and represent key obstacles in the relationship. These include the years-long detention of the Australian writer Yang Hengjun and journalist Cheng Lei on charges they both claim have no basis. While DFAT does consular work behind the scenes, the government must retain the right to comment and advocate on behalf of the cases of Australian citizens held in China.

Finally, there are the strategic issues. China wishes to reshape the geopolitical order in the region to its benefit. A second major goal for China is for other countries to respect its ‘red lines’, including on Taiwan, Xinjiang, Hong Kong the South China Sea and other issues. This has brought China into contradiction with the US-led ‘rules-based order’. China is neuralgic about its ‘red lines’ and views any Western criticism or pushback on these issues as an attack on their sovereignty and the legitimacy of CPC rule.

These strategic differences are difficult for Australia to deal with as all these issues, including Huawei, South China Sea, Chinese influence in the Pacific and Taiwan, are at least in part linked to our strategic alignment with the US, including through AUKUS and the Quad. It would also be very difficult not to speak up on geo-strategic issues that matter to us, including infringements of the established rules-based order. The forward leaning strategic stance of China under Xi Jinping raises genuine concerns for Australian national security in areas as varied as the South China Sea, the Pacific and Taiwan. Likewise, China’s approach to Hong Kong and disregard of human rights there and in Xinjiang challenge both Australian values and national interests. However, China finds Australia’s intervention in these issues provocative and unjustified.

Australia has viewed growing Chinese influence among the countries of the Pacific Forum with concern, especially the security agreement signed in 2022 between China and the Solomon Islands. The Pacific countries have had a long term and close relationship with Australia based on mutual economic, security and people-to-people links. As a result, China’s growing influence there is seen as disruptive and destabilising and will remain a vital strategic concern for Australia.

Washington’s strategy to counter China, however, is based in part on utilising allies and partners like Australia to help counterbalance China’s power in the region and globally. This has led to enhanced alignment and new agreements and groupings such as AUKUS, the Quad and the Indo-Pacific Economic Framework as well as even closer interoperability and interchangeability between the Australian and US military. China historically accepted the Australia-US alliance as a reality and appreciated that the alliance did not automatically lead to anti-China alignment or actions. However, these new post-2017 measures link Australia even more closely to the US and its war fighting plans against China. In China’s view Australia has become a branch office of the US. China wants Australia to go back to its pre-2017 position of seeking to balance the relationship with China and the USA, and Chinese officials have indicated that this would improve relations.

What Can Be Done?

The Albanese government has made progress with China by stabilising the relationship through a restoration of multi-level dialogues and eschewing provocative rhetoric. The view in Canberra is that time is on Australia’s side: there is no need to rush to make concessions. China will continue to buy our resources at a high price and the sanctions have not been too crippling except for seafood sector and to a lesser extent wine. The government knows China will struggle to diversify away from Australia in a number of key commodities in the medium term (e.g., iron ore, liquefied natural gas, and wool) and is also unwilling to modify key national security positions given its assessment of the difficult strategic situation facing Australia.

There is, however, also a view in government circles that it is in Australia’s interest to seek a way to improve relations with China given the long-term and central role China plays as an essential economic partner and regional power.

There is a possible path forward but it would require flexibility and diplomacy from both countries. On the Australian side, the most important action would be a change of narrative about China, stressing common interests, especially in the economic sphere and with issues like climate change, over any militarised threat. Australia should look at China through multiple lenses, not just the single lens of national security, as a hawkish narrative limits room for manoeuvre and diplomacy. One of the key points of the Australian government’s position over the past three years is that there is a moral danger of giving into coercion, which could be seen as surrendering our sovereign agency. The new government is also aware that the opposition and elements of the media would frame any concession as a ‘kowtow’ to China or an act of appeasement or weakness; in many cases this kind of framing is a deliberate misconception put forward by China hawks. On the contrary, the practice diplomacy is the process of seeking to advance our national interests, and this certainly applies to diplomacy with our largest trading partner.

Australian officials acknowledge that there is room to negotiate on some of Beijing’s concerns if it would lift its trade restrictions and end its anti-dumping actions against Australia. The Australian side in turn could consider its position on Chinese investment and its own anti-dumping policy. Supporting China’s aspirations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade agreement between Australia and countries including Japan, Brunei, Malaysia, Singapore and Vietnam as well as Canada, Chile and other Pacific-adjacent nations, would be a low-cost gesture for Australia. This would also match the position of other CPTPP members.

The problem is who moves first. The lack of trust between the two countries caused by the mutually abusive rhetoric and sanctions makes this difficult. China has demanded that Australia make the first move, saying China would then meet Australia halfway. This implies that Australia is in the wrong and responsible for the problems that have risen in the relationship. If there is not full reciprocity no agreement would be able to move ahead.

The Human Rights Dialogue mechanism effectively handled differences on human rights with China for nearly twenty years. However, senior DFAT officials say that this approach would be impossible in 2022. International findings by the UN, research by credible researchers and high profile reporting in the traditional media and social media effectively compel the government to comment on issues such as human rights abuses in Xinjiang an issue. Possible Xinjiang sanctions on Chinese officials under the Magnitsky-inspired legislation adopted in Australia in late 2021 is a potentially new problem for the bilateral relationship. There is disagreement in government circles on the wisdom of taking further steps that would certainly provoke China.

There will always be a strategic contradiction as long as Australian security policy remains based on the US alliance and while Xi Jinping continues to take China on its current course. Yet diplomacy and considered actions could lessen the strategic contradiction and continue the defrosting begun with Prime Minister Albanese’s meetings with Xi and other Chinese leaders, as well as the ministerial dialogues carried out in the second half of 2022. The Albanese government could shift away from the line of the previous government, which was to hew very closely to the US on China policy. This already has happened on the subject of Taiwan and the One China Policy. Australia has not joined the US in hollowing out its One China Policy and strategic ambiguity on its willingness to defend Taiwan. In addition, we have avoided provocative actions that US has taken in sending senior office holders to Taipei. The visit by six backbench Members of Parliament to Taiwan in December is a return to a regular practice of such visits that was interrupted by COVID travel restrictions. Under Albanese, the Australian rhetoric on Taiwan has been restrained and nuanced. The Albanese government’s realignment of policy on West Jerusalem (reversing the previous government’s provocative decision to recognise West Jerusalem as the Israeli capital), provides a model for rethinking undesirable elements of our China policy authored by the Morrison government or that have been an offshoot of US policy.

Most important would be a change in the official narrative about China and the development of diplomatic mechanisms for dealing with differences while focusing on common interests. If we do not take this path, a tense relationship with constant irritants and the ever-present risk of escalation into conflict will become a permanent normal to the detriment of both countries.

The post New Government, New Rhetoric, Old Contradictions appeared first on The China Story.

Trade has always been the key driving force in the relationship and remains so in 2022. In 2021, Taiwan was Australia’s seventh largest export market (AUD$16.8 billion) and thirteenth largest import market (AUD$7.2 billion). Australian exports are predominately commodity based. Taiwan has consistently remained among Australia’s top fifteen trading partners since the 1980s. The economic relationship is complemented by a strong cultural relationship and friendly political interchange. There is, in addition, a significant Taiwanese immigrant population in Australia.

The Australia-Taiwan economic relationship often bumps up against the harsh political realities of Australia’s relationship with China and the One China Policy. Recognising the autonomy and democratic reality of Taiwan, Australia has applied the One China Policy flexibly. However, there are real hard boundaries on what can be done, given China’s persistent policy of isolating Taiwan on the international stage and commitment to eventual reunification. Australia’s relation with China factors into how Australia handles its relationship with Taiwan.

FTA and CPTPP Membership 

The contradictions and challenges in the relationship are exemplified by the decisions by Taiwan to seek a Free Trade Agreement (FTA) with Australia in 2013 and membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2021. By the late 2010s, Taiwan remained one of the few major economies with which Australia did not share a FTA. Taiwan signed FTAs with New Zealand in July 2013 and Singapore in November that year (called Economic Cooperation Agreements, ECAs) and was keen to conclude a similar agreement with Australia. There was considerable interest in the business community. But a Taiwan FTA had to wait until Australia completed its China Australia Free Trade Agreement (ChAFTA), which came into effect in 2015. With ChAFTA bedded down, the Department of Foreign Affairs and Trade (DFAT) explored the potential for an FTA with Taipei. The Taiwanese began to advocate for membership of the CPTPP around the same time, though they did not formally apply until 2021. DFAT also considered a Taiwan FTA within the context of the CPTPP.

In the first half of 2019, DFAT put to ministers the possibility of a Taiwanese FTA and Australian support for Taiwanese membership of CPTPP. This came at a time when Australian relations were deteriorating with China over the foreign Interference laws and the exclusion of the Huawei from the Australian 5G rollout. Concerned that any movement on a Taiwan FTA or CPTPP membership would worsen the tensions with China, the idea of working with Taiwan was set aside.

By the second half of 2020, China had enforced a range of trade sanctions against Australian products; displeasure with Beijing spawned sympathy for Taiwan. Morrison government ministers indicated they were open to Taiwan joining the CPTPP, and an FTA. However, there remained concern about the effect on the already stressed relationship with China. It was felt that Australia would need diplomatic cover if it were to move on these policies — if the US joined CPTPP under a future Biden administration, for example, or concluded an FTA itself with Taiwan. As a result, the idea went nowhere.

In 2021, the idea of trade agreements and CPTPP membership remained alive. However, the Morrison government decided to take no action on either. The decision was based to a large degree on advice from various ministries and agencies concerned that any such move around the time of the AUKUS announcement would send the relationship with Beijing into a tail spin. Beijing saw the AUKUS agreement and the Quad deliberations as squarely directed at containing China and the acquisition of nuclear submarines by Australia as fitting into US war plans against China.

The Morrison government prioritised national security concerns over economic interests and Taiwan. This was consistent with long-term Australian defence policy, which did not see the defence of Taiwan as a key national security interest of Australia. In 2004, Foreign Minister Alexander Downer put on the record that Australia did not regard its ANZUS commitments to include any US-led defence of Taiwan. The rhetoric of Defence Minister Peter Dutton about Taiwan and the ‘drums of war’ in the lead up to the 2022 federal election was primarily a domestic political ploy to portray the ALP as weak on national security and China.

As the US has become more concerned about the possible defence of Taiwan the question has arisen whether and how Australia would support the US military in defending Taiwan. The Albanese government has been silent on this question to date.

Around the time Morrison government decided to put Taiwan’s CPTPP membership and FTA on the back burner, China changed its mind about CPTPP membership (and before it the failed TPP) and in September 2021 applied to join the CPTPP. The Morrison government effectively vetoed China’s application, a position supported by the Parliamentary Joint Standing Committee on Foreign Affairs, Defence and Trade.

Following the change of government in May 2022, the Taiwan issues remained on the back burner and the new Albanese administration took no action on Taiwan’s CPTPP application or showed interest in an FTA with the island.

On 18 November 2022, Prime Minister Albanese announced that Australia would not support Taiwan joining the CPTPP, citing the fact that the agreement was only for ‘nation states’ and Australia did not recognise Taiwan as a sovereign national state because of our One China Policy. This statement followed three days after Albanese’s meeting with Xi Jinping on 15 November at the G20 and has been seen in parliamentary circles and among officials as a signal to Beijing. Albanese subsequently had to walk the statement back, acknowledging that economies and customs areas could also join the CPTPP. Australian diplomats sought urgently to repair the damage and assure Taiwan that the policy had not changed. In doing so, Canberra was sending different, or at least individually tailored messages to both Beijing and Taipei.

Taiwan is already a member of APEC as an economy and a member of the World Trade Organisation (WTO) as the Customs Territory of Taiwan, Jinmen, Penghu and Matsu (the last three being smaller islands or island groups under its governance). Its status as a customs territory would allow it potentially to join the CPTPP if accepted by all other members.

Despite claims to the contrary, politicians and officials have indicated to the author that the government’s decision was primarily due to a desire by Albanese to maintain the momentum of his meeting with Xi Jinping on 15 November and to persuade China to remove its trade sanctions on Australia. The government’s priority is to stabilise relations with China and it feared that any concessions to Taiwan would lead to destabilisation of the relationship and no movement on trade sanctions. Albanese is also keen to obtain an invitation to visit Beijing.

Chinese officials have indicated that for them to lift trade sanctions, Australia would need to make some concessions and that China would meet it ‘half-way’. Among these are a reconsideration of policies and decisions that have restricted Chinese investment in Australia, from the decision to ban Huawei from the 5G rollout through to the rejection of the Chinese dairy company Mengniu’s proposed takeover of a Tasmanian dairy company. The Chinese Embassy has claimed that from the start of 2019 up to March 2022, AUD$370 million of Chinese investment had fallen through due to changed Australian investment policy. The Chinese have also sought a reform of Australian anti-dumping practices, which they contend have led to a major imbalance in anti-dumping cases, with Australia taking 111 cases against China and China only three against Australia. DFAT is confident that the few Chinese anti-dumping cases against Australia, introduced in 2020 on wine and barley, are likely to fail at the WTO. In addition, the Chinese have pushed for Australia to support their application to join the CPTPP — and as a corollary want Australia to oppose Taiwan’s application. The announcement by Albanese in November that Australia would not support Taiwan’s application can be seen as a response to China’s demands, and perhaps an easier one than reconsidering the ban on Huawei.

Australia’s ability to veto or support China’s CPTPP membership application provides it additional leverage to the Albanese government as it stabilises relations with Beijing and works towards the lifting of $20 billion worth of trade sanctions. Ruling out Taiwanese CPTPP membership for the time being sends a positive signal to Beijing. Decisions on other concessions, such as regarding investment and anti-dumping reform, could be put off until all Chinese trade sanctions have been lifted.

Despite the abovementioned possible changes of China policy, the Albanese government, like the Morrison government before it, remains firm on national security issues. It has ruled out a reversal of the ban on Huawei. Australian national security interests would regard very dimly any decision to remove the ban; such a decision would also bring the Albanese government under significant pressure from the US.

The Albanese government, aware of the sensitivity of the Taiwan issue for China, has sought to reduce tensions with China over Taiwan and to differentiate itself subtly from the US in its Taiwan policy. US President Biden has said several times (if somewhat ambiguously) that the US would defend Taiwan if it was attacked by China. Australia has not joined the US in hollowing out its One China Policy and has avoided provocative actions that US has taken in sending senior office holders to Taipei. Although six parliamentarians representing both the Coalition and Labor have planned a visit to Taiwan in late 2022, Albanese has stressed that this ‘isn’t a government visit’. This is also a return to a long-standing practice of backbench MPs visiting Taiwan that was interrupted by the COVID travel restrictions in Australia and Taiwan.

Analysis

Under Labor, Australian rhetoric about Taiwan has also been more restrained and nuanced than under the Coalition. The Albanese government took note of the fact that China reacted very strongly to the 5 August joint statement by the US Secretary of State, the Foreign Minister of Japan and Foreign Minister Penny Wong which expressed concern over Chinese military exercises in the Taiwan Strait following the visit of US Congresswoman Nancy Pelosi and sought to avoid making further statements on Taiwan that would inflame tension with Beijing.

While there is sympathy in Australian government circles for Taiwan, the imperatives of the China relationship and national security considerations take precedent. That said, although there may be room to improve the trade and investment situation with China or even support CPTPP membership for China if it secures a lifting of trade sanctions in full, there is no appetite in the Albanese government to move away from national security-based decisions or AUKUS. Albanese is also willing to step back from trade deals with Taiwan in a way that he is not prepared to do on national security policy decisions. This is a continuation of the position of the Coalition governments since 2013, which delayed negotiating an FTA with Taiwan or promoting its CPTPP membership for nearly a decade largely because of the potential effect on relations with China.

Concessions on economic issues and Taiwan can mean the government doesn’t need to make any concessions on AUKUS or any other issues with implications for national security, values or human rights. We can expect no retreat on national security issues, AUKUS or human rights from the Albanese government. We can also expect that Taiwan will continue to be disappointed by Australia as far as an FTA or its CPTPP membership is concerned.

The post Australia–Taiwan Relations Under the New Labor Government appeared first on The China Story.

Ambassador Xiao’s conciliatory line was rebuffed by Prime Minister Scott Morrison, who refused to meet him. Yet the ambassador’s conciliatory statements do point to a potential way forward – and the upcoming election provides an opportunity for a rethink of Australia’s China Policy.

Background

Chinese official sources have confirmed that Xiao comes to Australia with a mandate from Beijing to improve bilateral relations. The change of tone is particularly significant — China has not until now made any compromises nor sought to meet Australia ‘halfway’ on any issue since the deterioration of relations began in 2018. That deterioration followed a series of policy decisions that sought to limit Australian exposure to the PRC’s influence and power, including the introduction of the Foreign Influence Act (which didn’t specify the PRC but was understood as an attempt to counter PRC influence in Australian politics) and the decision to exclude Huawei from the nation’s 5G roll-out.

Ambassador Xiao met Foreign Minister Marise Payne on 10 March 2022 and with Shadow Foreign Minister Penny Wong six days later to deliver a similar message. The ambassador has also spoken with key Australian business figures including those from the Australia China Business Council and the Business Council of Australia.

Xiao Qian is a lifetime diplomat. Prior to his arrival in Canberra, Xiao Qian held postings in Ethiopia (Attaché 1986-1990), India (Third Secretary 1993-1996), the United States (Counsellor 2000-2003), and the Philippines (Counsellor 2003-2006), before being appointed ambassador to Hungary (2012-2015) and then Indonesia (2017-2021). DFAT sources indicate that in both countries he had good access to key decision-makers. When he left Hungary, he received an award from the Hungarian government for his achievements in strengthening China-Hungary relations. During his posting in Washington DC, sources indicate that he was well regarded by the State Department as someone they could work with.

Born in 1964, Xiao was the son of a senior cadre. He joined the Chinese Ministry of Foreign Affairs (MFA) in 1986 after graduating from university and has spent his entire career in the MFA. He speaks fluent English and Bahasa Indonesia, and has a working knowledge of Hungarian, Amharic, and Tagalog, with some French and Russian. According to Australian diplomats and businesspeople who have met him, Xiao is urbane, polite, and easy to deal with. His social media profile is low key and follows the Chinese official line very closely. But he is not a ‘keyboard wolf warrior’.

During his time in Beijing, Xiao has almost exclusively worked on Asian relations, holding the position from 2016 to 2017 of Director-General of the Department of Asian Affairs and Deputy Representative on Korean Peninsula Affairs. (A Director-General in the Chinese System is the equivalent of a First Assistant Secretary in DFAT.) Official sources indicate he has not had significant dealings with the Pacific countries.

As the 2022 federal election draws closer, the Morrison government seeks to use the China relationship, about which its rhetoric had grown increasingly politicised, as a weapon against the opposition, although it appeared to have been blindsided by the Security Pact signed between the PRC and Solomon Islands in April. The government has also been vocal in declaring it was “in lockstep” with the United States on the subject of China.

Xiao Qian, tasked with making a guarded attempt to improve Australia-China relations, will observe the election as an experienced diplomat who firmly advocates his country’s position on issues but does not engage in aggressive tactics. After the federal election, Xiao is expected to launch a campaign of public speaking and appearances to push for an improvement in bilateral relations in the lead up to the 50^th anniversary of the establishment of diplomatic relations on 21 December 2022.

In their meetings with Australians, Ambassador Xiao and his fellow diplomats have suggested a potential framework or roadmap for dealing with problems between the two countries, using the current state of relations as a starting point. While the PRC has taken no steps yet to unfreeze the relationship, the proposed process involves mutual concessions that would lead to that outcome.

The Chinese side have expressed, through both formal and informal statements, the desire for Australia to indicate that it regards China as a partner rather than a rival or enemy. Sources have said that Chinese officials have acknowledged that neither side wants to be seen as yielding to the other in the standoff, and both sides need to make simultaneous reciprocal concessions, which is likely the underlying meaning of ‘meeting halfway’.

The Chinese side have further suggested that rapprochement be worked out through diplomacy, and jointly announced. They have suggested that sensitive issues, such as the South China Sea, Xinjiang, Hong Kong, Taiwan, Tibet, human rights, as well as anti-Chinese racism in Australia, would need to be discussed through formal, discreet mechanisms, rather than public comment. This would be a return to the model of the human rights dialogue which ran successfully for a more than a decade before Beijing terminated it as part of the diplomatic freeze. Australia would not be alone among countries in using this type of mechanism to manage sensitive issues with China.

Critics will describe the invitation to ‘meet halfway’ as disingenuous, demanding to know which half of our sovereign agency will be surrendered.  It could be categorised as giving way in the face of economic coercion and renewing dialogue on China’s terms, not our own. This criticism is valid but a contrary argument could be made that our national interest could be best served by making compromises that match compromises made by the Chinese side. Diplomacy has always been about deals, compromises and meeting halfway, even in the most difficult situations.

Analysis

Our current policy settings have driven Australia into a dead-end. Many Australian exporters, business-people, educators, farmers, Chinese-Australians and others want and need workable relations, not unending confrontation with the PRC. There have been great opportunity costs and real losses in trade and investment to Australia resulting from the current policy. The treasury estimated that Australia has lost AU$5.4 billion in the first year of Chinese sanctions and the wine industry is expected to lose AU$2.4 billion over five years. The recently announced Australia-India Free Trade Agreement, while welcome, cannot deliver the potential benefits that our trading and investment relationship with China will continue to deliver.

Our goal should be to achieve at least the level of the relationships that China currently enjoys with our Quad partners, all of which are more expansive than our own – especially those with the United States and Japan. It is in part thanks to the rhetoric of the Morrison government that our relationship with China is in such a sorry state. Our Quad, and indeed AUKUS partners each maintain productive dialogues with China on political, economic, trade and human rights issues, while we remain frozen out.

The key to better managing our relationship with China is to adopt a mindset and policies that create a less hostile atmosphere while still doing what needs to be done to protect our key national security and economic interests. After the election, irrespective of the result, it may well be that a hard line on China will no longer serve a domestic purpose. The newly elected (or re-elected) government could advise allies in Washington and elsewhere that mending Australia-China relations serves our national interests without compromising theirs. Our goal would be to restore Australia’s relations with China, at least to the level that the United States and Japan currently enjoy with Beijing.

The appointment of Ambassador Xiao and the new Chinese willingness to compromise and talk has already changed the dynamic in the relationship. The federal election provides the opportunity for Australia to test this new approach by China, no matter which party wins. Rather than adhering to a policy that provides no way out of stalemate and amplifies our differences with our largest trading partner and rising power, we have the chance to adopt a better, smarter, diplomatic approach to the relationship.

The post New Chinese Ambassador Provides Opportunity for a Rethink of Australia’s China Policy appeared first on The China Story.