Lessons from the China-Australia Conflict

In the middle of the last decade Australia’s growing partnership with China was widely seen as one of the most robust in Asia. Yet, within a short span of three years, it has become emblematic of China’s troubled relations with its Asian neighbors. Despite being a treaty ally of the United States and close military partner in all American ventures of global intervention, Australia demonstrated extraordinary enthusiasm for the engagement with China since the end of the Cold War. Trade was booming as China became Australia’s most important export destination. The growing presence of Chinese diaspora in Australia, large flows of students and tourists, widening consultations on regional and international issues and a deepening level of political comfort between the Australian political class and China saw Canberra become a major strategic partner for Beijing. 

The dramatic down-turn in bilateral relations since 2018, then, reminds us of some  basic features of international relations often forgotten amidst the narrow focus on power and its uneven distribution among nations as critical factors in shaping behavior of nation-states. Significant asymmetry of power does not automatically compute into the capacity to shape the actions of the weaker power. It also underlines the enduring power of national resistance when a nation is united and the multiple international opportunities for the weaker nation in countering the threats from large states. The China-Australia dynamic also underlines the danger of unintended consequences and unwanted outcomes from great power hubris and reckless diplomacy.  

The Dangers of Total Opportunism
Timofei Bordachev
In practice, any discussion of international governance is always a discussion of how to make workable "political changes" within the existing international order, to prevent a revolutionary trajectory from emerging. The crisis in international politics - the main reason the issue has been placed on the agenda - is the result of a redistribution of power.


The Unraveling

President Xi Jinping’s visit to Australia in 2014 marked the peak of the relationship. As the only communist leader ever to address the Australian Parliament, Xi talked about the “ocean of goodwill” between the two countries and the “immense support” for bilateral relations among the two peoples. Soon after Xi’s visit, Canberra and Beijing signed a free trade agreement in 2015; Australia joined China-led Asian Infrastructure Investment Bank (AIIB) in 2015 despite the objections from the United States; Canberra also gave the sensitive Darwin Port in northern Australia on a 99-year lease to a Chinese company. But within a short period, the contradictions of the relationship began to unfold to rapidly unravel the expansive engagement between the two countries.  

The series of steps that led to the breakdown are now well known. The growing concern in Canberra’s security establishment about China’s influence operations in Australia’s and the passage of a law against foreign interference in 2018 amidst scandals about the links between Australian political leaders and  Introducing the bill in the Australian parliament at the end of 2017, Prime Minister Malcolm Turnbull called characterized Chinese meddling “covert, coercive, or corrupting”.  Beijing might have mistaken the general political openness of Australia and other Western countries as a permissive environment that would not impose serious costs on crossing the line between a foreign power’s “legitimate quest for influence from unacceptable interference”. Beijing clearly underestimated the power of Canberra’s ‘deep state” to ‘discipline’ the Australian political class and civil society. 

It also became quite clear that it was not just the Australian intelligence establishment that was waking up to a new challenge from China. It involved it's Anglo-Saxon counterparts—the United States, Canada, United Kingdom, Australia, and New Zealand. The intelligence-sharing agreement between them dating back to the Second World War, called the “Five Eyes” has had great influence in shaping the global policies of the Anglo-Saxon alliance. In mid 2018, the intelligence chiefs from the five countries joined hands to warn their governments against the dangers of adopting Chinese technologies in the rollout of the Fifth Generation Wireless technologies. Australia became the spearhead of this campaign by becoming the first country to reject Huawei’s participation. 

Australia was also at the forefront of demanding a WHO inquiry into the origins of the Covid-19 virus in 2020 as the horrible pandemic enveloped the world. The harsh Chinese reaction to Australia played right into the hands of the “deep state” in Australia and the Anglo-Saxon world. It is indeed amazing how China “lost” Australia.

Despite the expansive goodwill within the Australian political class, the enthusiasm of the Australian capitalists for the Chinese market, and great empathy for China in the academic class, the Australian deep state could quickly turn around the debate on the China threat and generate a new consensus against Beijing.

The stronger the Chinese measures against Australia, the greater was the consolidation against it in Canberra. China’s compellence strategy against Australia resulted not in Canberra’s submission to pressure, but to defiance and a determined bid shore up old alliances and build new ones. The “ocean of goodwill” that President Xi talked about in 2014 had now rapidly dissipated like seafoam. If 12 percent of Australians saw China as a threat in 2018, 63 percent did in 2021. 

Counterproductive Coercion

Three broad lessons emerge from Chinese President Xi Jinping’s strategic fiasco in Australia–the constraints on coercing weaker states, dangers of pushing the targeted country towards countervailing alliances and the virtues of traditional diplomacy in resolving problems. Let us look at each one briefly.  

History of international relations is replete with examples of the big power difficulties of compelling weaker states to adopt a preferred course or deter them from taking unacceptable actions. Although power imbalance offers powerful tools to let the stronger powers enforce their will on the weaker ones, it is not always a decisive factor in shaping the outcomes. Factors such as nationalism and a willingness to pay a high price allows the weaker states to embark on a measure of defiance. The US has not been able to tame Cuba, Nicaragua, and Venezuela despite multiple efforts. China has struggled to enforce its will on Vietnam, Delhi has huge problems enforcing its writ on tiny Maldives and Sri Lanka. 

Lack of proximity has significantly constrained China’s coercive power against Australia. In the case of India and Japan, which share contested borders with China, Beijing has taken recourse to military actions to pressure Delhi and Tokyo to alter their policies. China did not have the power to do the same with distant Australia. Its main instrument, then, was to weaponize deep economic interdependence with Australia. Although many feared that Canberra would pay a huge price for offending Beijing, Australia appears to have survived the punishment with relative ease. In fact Australia’s trade with China was dented only by two per cent in 2020. Even more interesting is the assessment that the Chinese sanctions have empowered Australia by demonstrating the immense possibilities for diversifying trade and strategic partnerships away from China.

That economic sanctions are a blunt instrument has been borne out by the experience of the US that has taken far too frequent recourse to it. It is indeed surprising that China has uncritically adopted this failed American stratagem.

Chinese coercion against Australia was not only ineffective, but also counterproductive. At the turn of the 21st century, China was gearing up to replace Britain and the United States as the most important partner of Australia. Thanks to China’s coercion, Australia is now back to its roots in the Anglosphere with the formation of the AUKUS alliance. It is also deepening security ties with Japan through the Reciprocal Access Agreement. Canberra–which was deeply skeptical about the Quad formation with India, Japan, and the United States during 2007-08–has now become an active champion of the forum. 

Beijing has long sought to prevent the emergence of an alliance to counter China in Asia. Chinese diplomacy since the 1970s has drawn great admiration for neutralizing the massive American alliance structure in the region by befriending the US and its allies. China’s actions in recent years have had the opposite effect–pushing friends and partners closer to the US by threatening them. The negative effects of the contemporary Chinese strategy seeking primacy in Asia has been compounded by its new confrontational approach–the so-called Wolf Warrior Diplomacy. The use of insulting language by diplomats and leading news journals towards Australia and the ostentatious “list of 14 grievances” against Canberra constituted a stunning self-goal by Beijing in a nation, whose public opinion was so favorably disposed to China. If Beijing’s new diplomatic hubris put off people in Australia and beyond, there was some, if mild, criticism of it within China


Barely a few years ago, Chinese foreign policy and its diplomatic focus on soft power were universally hailed for impressive achievements. It was held in contrast to the US reliance on military force and economic coercion. Beijing’s subtle pursuit of its national interest  and Washington’s crude formulations such as “with us, or against us” seemed as different as cheese and chalk. China’s current troubled relations with Australia demonstrate the pitfalls of Beijing adopting Washington’s playbook. While the regional and global damage from China’s Australian fiasco is real, it might not be too late for Beijing to correct course. Freezing territorial conflicts with neighbors, seeking cooperative security, returning to conventional diplomacy that values moderation and compromise, and replacing arrogance with humility in its engagement with the civil societies could help undo some of the negative consequences of recent Chinese statecraft.

China’s Diplomacy in the Changing World
Gao Fei
The center of gravity of international politics and economy is changing. Asia overcame Europe and North America as the top continent in term of economy. The economic vitality of Asia has attracted the attention of the whole world, and the security problems in Asia have become particularly prominent. The security issue in Asia involves two levels. At the level of the international system, there are structural contradictions between Rising China and the United States.
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.