After US Trip, Australian PM Embarks on Tricky China Tour

(Bloomberg) -- Australia’s Prime Minister Anthony Albanese is preparing for his inaugural visit to China beginning Saturday, the first tour by an Australian leader since relations started to deteriorate six years ago.

Most Read from Bloomberg

The trip follows a rapid thawing in ties between Canberra and Beijing since Albanese’s center-left Labor government won office in May 2022. This includes the removal of trade barriers on a range of exports to China and the release of Australian journalist Cheng Lei — detained for more than three years.

But the prime minister’s visit, which also marks 50 years since the first trip to China by his Labor predecessor Gough Whitlam, has raised questions over the next steps between the two countries. While they trade heavily, Australia’s deep security alliance with the US is likely to raise barriers to a sustainable enhancement of relations, particularly as the current global order fractures.

The divergences in Australia and China’s interests “are going to just get deeper, not weaker, over time,” said Lavina Lee, a senior lecturer at Macquarie University who specializes in security studies. “The scope for cooperation is quite narrow, almost disappearing.”

Albanese will visit Beijing and Shanghai from Nov. 4-7, during which he will attend the China International Import Expo and meet with President Xi Jinping.

“One in four of Australia’s export dollars is dependent upon the China relationship,” Albanese said this week, explaining why the relationship matters while signaling he will stand up for his views.

“We’ll continue to raise issues, including our view about the South China Sea and the importance of the rite of passage for our trade through the waterways of the world,” he told reporters. “We will engage in a respectful way, in a way that’s about outcomes, not a loud hailer.”

Albanese’s visit will be the first by an Australian leader since then-Prime Minister Malcolm Turnbull in 2016. In the period after, Australia restricted Chinese technology giant Huawei Technologies Co. from participating in its 5G rollout and cracked down on foreign political interference.

That kickstarted a chill in relations between the two countries that reached a nadir in 2020 when then-Prime Minister Scott Morrison called for an investigation into the origins of Covid-19, infuriating Beijing. It retaliated with trade curbs on Australian coal, barley, wine and other agricultural produce.

Albanese’s visit is the culmination of a warming in ties since he defeated Morrison at an election about 18 months ago.

Speaking at a Bloomberg event in Melbourne last month, China’s Ambassador to Australia Xiao Qian acknowledged that ties between the two countries had now stabilized, while adding that he wanted to see the relationship improve.

Yun Jiang, a fellow at the Australian Institute of International Affairs, said the ambassador’s goal may prove too optimistic given the “future challenges.”

Among these are growing security concerns in Australia over investment and trade by Chinese businesses, she said, adding the related obstacles bring frustrations in Beijing. “It’s not something that can be resolved easily.”

China has made clear it would like more investment in Australia, especially in the critical minerals sector. The difficulty is clear, though, as Australia is trying to build up this sector in order to allow western countries an alternative to China’s dominant position in the industry.

Meanwhile, Albanese is looking for the final trade sanctions on wine and lobsters to be lifted, as well as attempting to secure the release of Australian writer Yang Hengjun, who has been detained in China for more than four years.

Even before Albanese departed, some hawkish voices at home raised concerns over the prime minister’s visit, warning the Australian leader to keep his cards close to his chest.

President Joe Biden told Albanese to “trust, but verify” anything Beijing told him during the visit, while former Prime Minister Morrison told journalists in London that he was concerned that Australia may be taken advantage of by the Chinese government.

Morrison never visited China during his time in office, and oversaw icy relations between Canberra and Beijing.

Macquarie University’s Lee said that with legislation to advance the AUKUS agreement between Australia, the US and the UK still hanging in the balance in Congress, Washington would be watching Albanese’s Beijing visit closely to see how reliable a partner Canberra will make in the long-term.

“It’s at a point where the Australian government really has to show to the US that they have the resolve to stay the course,” she said.

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.