Sino-Australian relations under Rudd and Gillard: a quick glance over the shoulder and peek around the corner

With Australian politics presently consumed by the carbon tax "debate", the perennial topic of the country’s stand-offish, aquaintances-not-mates, relationship with China is temporarily at least off the front pages and the tops of new service web pages.

Whilst the usual posturing, attention seeking suspects are distracted, let’s sneak a look at how we got where we are the challenges in store.  Quickly now…..  

The 2007 election victory of the Australian Labor Party under the leadership of Kevin Rudd a fluent Mandarin speaker who had served as a diplomat in Beijing during the start of the reform period in the 1980s seemed to auger a period of even closer economic and political ties between Australia and a rapidly rising China.

However a series of events over the next three years would see the new government struggle to keep the initiative in its dealings with China. Whatever Rudd’s linguistic talents or diplomatic experience he would have no less of challenge in managing the relationship with China either as Prime Minister or Foreign Minister.

Relations with China had been strained during the early years of the Howard government with criticisms in the official Chinese media of Howard’s determination to eschew his predecessor Paul Keating’s program to reorient Australia toward Asia in favour of reaffirming Australia’s traditional Euro-American ties. In 2001 the parlous state of Sino-Australian relations was highlighted by the unprecedented confrontation of Royal Australian Navy warships transiting the Taiwan Strait by the Chinese Navy.[1] 

But despite the initial friction by 2003 Chinese president Hu Jintao in an address to the Australian Parliament stated the China viewed relations with Australia as “strategic and long term.” By 2005 the expansion of the economic relationship had resulted in China displacing the United States as Australia’s second largest merchandise export market. In May of that year negotiations commenced for an Australian Chinese free trade agreement.[2]

Apart from Kevin Rudd’s diplomatic experience and apparent affinities with Chinese language and culture there was also a coincidence of diplomatic style between the Chinese leadership and Rudd. As relations with China improved from 2001 onward John Howard found himself synch with the Chinese in terms of international engagement.

Howard and his Foreign Minister Alexander Downer were staunch practitioners of the Australian conservative tradition of pursuing engagement with the region on a bilateral rather than multilateral basis. This approach initially synchronised with China’s own suspicion of regional structures such as ASEAN.[3] But the Chinese came to take a more pragmatic approach, adopting the language of multilateralism and actually engaging with regional bodies where it perceived them to further Chinese interests.[4]

The Howard government was “caught off-guard” by this shift in Chinese policy, in particular the formation of the East Asian Community from the ASEAN+3 group. In order to maintain Australian standing in the long term Howard was compelled to accept a short-term loss of face by signing the ASEAN Treaty of Amity and Co-operation he had hitherto much derided.[5] But whilst China’s new enthusiasm for multilateral forms of engagement wrong footed Howard they were congruent with Rudd’s approach to global affairs which embodied the Labor foreign policy tradition of multilateralism and engagement with regional bodies.[6] In general, foreign policy making in Australia is an executive prerogative more than other policy areas.[7] But in the case of the Rudd government this was even more pronounced.
 
Rudd not only possessed a highly developed set of views on foreign policy (particularly toward China) but had no rival within the cabinet who could challenge his sway over this policy area. The man he appointed Foreign Minister, Stephen Smith had little experience in foreign affairs before coming to the role.[8]

It appears that Rudd, flush with confidence in his domestic position after his overwhelming election victory and his own understanding of Chinese issues felt able to take bold steps unimaginable under his predecessor. In a speech to a select audience of Chinese students at Beijing University in early April 2008 he directly addressed (in Mandarin) the sensitive issue of Tibet. Although Rudd insisted he was speaking in the capacity of a zhengyou (true or trusted friend) of China it would prove to be the first of an extraordinary series of incidents in 2009 that would bring renewed focus on underlying frictions in the Australian-Chinese relationship the Howard government’s pragmatism tended to circumvent.

First was the release in May 2009 of the new Defence White Paper. It was the first comprehensive review of Australian defence policy since 2000 (barring post-September 11 update papers). The White Paper’s analysis which repeatedly identified China’s rise as a potential “source of concern” for China’s neighbours provoked anger in Beijing although this was concealed at the time.[9] The following month before the friction over the DWP had a chance to cool came the rejection on national security grounds of a bid by Chinese aluminium company Chinalco (one of China’s powerful and politically connect state owned corporations) for a controlling stake in Rio Tinto.[10]

The arrest and trial of Rio Tinto executive Stern Hu on charges of stealing state secrets were read by some in Australia as a Chinese retaliation for this.[11] August brought yet another provocation of an already riled Chinese government with the visit to Australia of Uighur figurehead Rabiya Kadeer. It is of little surprise in this context that in mid 2010 little progress was made with the Australia-Chinese FTA negotiations initiated five years previously.[12]

So why would Kevin Rudd with all his understanding of the sensitivities of the Chinese politics show such apparent ineptitude in handling the China relationship? Rudd’s challenge was to “reconcile interest-driven realism with values-driven liberal internationalism.”[13] It seems more probable that Rudd failed to strike this balance in his handling of relations with China rather than that he suddenly lost of his comprehension of Chinese matters. Rudd also found himself vulnerable to domestic perceptions of “kow-towing” to China.

Foreign policy can never be kept completely elevated above all the pressures that affect the decision making process especially in a democracy; but it has been suggested the Rudd government was excessively sensitive to public opinion in this area.[14] It might be suggested that a loss of confidence in support for the government’s domestic agenda infected the foreign policy making process.

This would happen all the more easily in a government like Rudd’s where the prime minister played such a direct role in that process. There could hardly be a more potent symbol of this cross-contamination of domestic and foreign policy than the precipitous decision to postpone the Emissions Trading Scheme (a key domestic policy item but one intertwined with international efforts to combat climate change) in April 2010 which led to a dramatic collapse of popular support for the Prime Minister.[15]    

The ensuing ouster of Rudd by his deputy Julia Gillard had particular ramifications for foreign policy. Gillard was notable for her role in core domestic policy areas, in particular education, but brought little in the way of foreign policy expertise, something she freely admitted herself.[16]  This deficiency in a key policy area was only further emphasised by Kevin Rudd taking his Foreign Minister Stephen Smith’s job. This created an atypical dynamic in the reshuffled cabinet with a Foreign Minister who displayed an aberrant level of autonomy in his handling of the role.[17] This raises particular questions about established channels within Australian government for the handling of Chinese affairs.

It has been the custom since the establishment of relations with the Peoples Republic of China for Australian ambassadors in Beijing to report directly to the prime minister rather than the Foreign Minister.[18] It seemed unlikely that this would be maintained in the Gillard government. This seems to be borne out by the nature of Julia Gillard’s and Kevin Rudd’s 2011 itineraries. Whilst Gillard conducted a Northeast Asian tour in April including the obligatory talks in Beijing with Chinese leaders, her foreign ministers travel plans might be rather more substantial. These involve two trips to China’s main provinces in which Kevin Rudd will take the lead role in handling the economic relationship.[19]

However and whoever handles Australian foreign policy, the country’s reliance on its trade with China to evade the global economic downturn exacerbates one of the greatest challenges of that relationship. Viewed in isolation the bilateral relationship is fraught with challenges as has been described above.

But take a wider view to see that line between Canberra and Beijing is in fact one side of a triangle that connects both to Washington and one appreciates the complexity of what anyone involved in Australian foreign policy must contend with. Australia must balance her vital economic interest in a successful growing China with a security policy dependent on a strong and regionally engaged United States. The salience of this view of Australia’s foreign policy is reflected in Rudd’s “3 Pillars” mantra which forms the basis of his foreign policy making: the US alliance, engagement with Asia (read China) and membership of the United Nations.[20]

China’s re-emergence as a world power, long speculated has proceeded over the last five decades in apparent fits and starts punctuated by natural and self inflicted crises. But to focus on these recent upheavals as dramatic as they were in scale is, like viewing the Sino-Australia relationship in isolation, too take too narrow a view.

The crisis from which China has emerged is not an economic or political crisis of several years or even decades but nothing less than a two hundred-year long civilizational crisis. Australia and the United States must always keep in mind that China judges the wisdom of a given policy in terms of cost and benefit over centuries, not the duration of an election cycle. If any proof were needed of this, one need only observe how the political quarrels of 2008-2010 continued to grow unimpeded.[21]

In democratic systems it is incumbent upon the foreign policy elites to foster the construction of a popular consensus around pragmatic engagement with China. This involves resolution of a dilemma in Australian foreign policy:  Australian-Chinese trading relationship becomes stronger as China’s economy grows, at the same time this fuels the growth of China’s strategic weight which in turn generates more tension in the western Pacific for Australia and her US ally who is lumbered with debt owed to China itself.

WikiLeaks revelations are enlightening on how the current Australian government views this dilemma. In a meeting with US Secretary of State Hillary Clinton in early 2010 then Prime Minister Rudd is alleged to have advocated a line of “multilateral engagement with bilateral vigour” and that the US be prepared to contain China militarily should engagement fail.[22] The public line since then has become noticeably tougher.
 
Beijing has long taken a direct interest in Australia’s alliance with the US and has been publically critical of what it regards as an outdated arrangement.[23] During her April 2011 tour of Northeast Asia, Julia Gillard made it clear that  “[Australia is] a long-standing alliance partner of the United States. China knows that and that alliance will continue for the future and China knows that as well.”[24] Though for now that is a tenable position, the time may be approaching when it is not whether China understands Australia’s position, but whether it is of any relevance to a strong regional power with a mature economy not quite so hungry for resources, a power that could afford to choose friends more to its own liking.