After the 2019 election, PM Morrison met with President Xi Jinping. How did relations sour?
If you look at the Australia-China bilateral relationship, the peak was in 2014. That's when President Xi Jinping visited Australia. He addressed both Houses of Parliament and he visited the state of Tasmania, which meant that he visited every Australian state. The relationship started to deteriorate after that. There was a host of bilateral irritants including Taiwan, Hong Kong, South China Sea, East China Sea, the banning of Huawei, disputes over foreign interference, and various scandals related to casinos to name a few. Then came COVID-19 and the Australian government’s call for an independent inquiry into the pandemic. It’s like watching a landslide where a little bit of rock falls off here, a little bit falls off there. When we made the COVID inquiry call, that's when the whole mountain collapsed. It happened over a lengthy period. It's like when Hemingway was asked how he went bankrupt. He said, “gradually, then suddenly,” and that's what happened with Australia and China. After the COVID inquiry, China imposed trade sanctions on Australia, and we've been locked in our trenches ever since.
What are Australia’s main concerns about China’s security deal with the Solomon Islands?
This is a long-running issue. China has been in the Pacific in a serious way since around 2005. In 2006, there was a coup in Fiji and Australia took sanctions against Fiji. China moved in when Australia tried to isolate Fiji to fill the vacuum left by western powers. So China has been active in Fiji and other Pacific countries for some time. The US, Australia, New Zealand and Japan have similar interests in the Pacific, but the US leaves it to Australia and New Zealand to take the lead on the issues there. So the kinds of concerns that Australia might be articulating reflect those of numerous other countries. We see that in response to the Solomon Islands deal, where the primary objection to it is that it could eventually give China a military foothold in an area which has genuine strategic potential. From there, you can have easier access to, and surveillance of, Hawaii, the US West Coast, Australia and New Zealand. It really has the potential over time to change the strategic balance in the world's largest ocean.
What are the possible consequences of mounting tensions between Australia and China for the international community?
There are no immediate kinetic implications, but Australia is an interesting test case of what happens when a small liberal democracy which is economically intertwined with China stands up to Beijing. Can they withstand coercion from Beijing? Will other countries support them? It’s also important in the sense that one can see how China responds. China's political rationale for their actions is twofold: Either Australia breaks under the pressure of economic coercion, and that's a victory for China. Or Australia pays a large economic price which is clear and obvious to all. That is also a victory for China, because China can then use it as an example. So far, neither of those things has happened. Public opinion in Australia has been strongly behind the government. Our trust in China has fallen dramatically. Some industries in Australia have paid the price but overall, the Australian economy has adapted very well. The impact on the Australian economy is difficult to measure in some respects, but generally speaking, Australia has still prospered. I think this is a longer game, but generally speaking, the lesson so far is that you can stand up to China and still be a prosperous liberal democracy. In that respect it's been an interesting example for the world. I lived out of Australia for three decades, and I came back four years ago to work for the Lowy Institute. It was funded by a billionaire called Frank Lowy who said he was sick of traveling overseas and all you would see about Australia was stories about bushfires and kangaroos. Australia is an isolated place. It's a long way from everywhere. Normally, people don't pay much attention to it. Why would they? But there has been a lot more interest in Australia as a result of the China standoff. It has brought an unusual international focus on Australia, and we have had to explain our actions.
Is it possible for Australia and China to resume a partnership rather than an adversarial relationship? What would need to happen?
One of the responses to pressure from China is that Australia has doubled down on the US Alliance. So we're a subset in some respects of the US-China strategic competition. That tension is increasing, not going away. In the absence of the US-China reconciliation, which I don’t think is on the horizon, it's difficult to see a dramatic change in Australia's relationship with China. We've made decisions which will take many years to execute, such as getting nuclear powered submarines, building a homegrown ballistic missile force, and having close military ties with the US and Japan. It's possible that the tone may improve and there may be some areas where we start to talk to each other again, but it's not going back to what it was.
In your opinion, has the war in Ukraine increased Australia’s worries about China and Taiwan?
Ukraine is not completely analogous to Taiwan, but it is a stress test for the challenges of invading another country. It's also a stress test for the response of Western countries to an invasion. Only time will tell.