Australia’s strategic journey since 2009 has shifted from the optimism of regional community, to a plea for rules, and now to a heartfelt call for dialogue.

Running through the evolution of Australian thinking is a hardening understanding of China. To China’s chagrin, the established construct of the Asia–Pacific was overtaken by the Indo-Pacific. The Canberra constants are the US alliance and ASEAN centrality.

Trace the journey through three major foreign policy speeches by prime ministers: Kevin Rudd in 2009, Malcolm Turnbull in 2017 and Anthony Albanese in 2023. Each was the keynote address to the premier Asian security summit, Singapore’s Shangri-La Dialogue.

Rudd, in 2009, was speaking when the global economy was about to contract for the first time since World War II, as a financial crisis became an economic crisis. Despite the economic gloom, this was the most optimistic perspective on the region offered by the three PMs.

Rudd described his ambition for an Asia–Pacific community that would:

help to nurture a culture of cooperation and collaboration on security—including a culture of military transparency, helping to build confidence- and security-building measures by providing information that reassures neighbours rather than alarms them. An Asia–Pacific community could also provide a vehicle for discussion and cooperation across the range of challenges with transnational reach, such as climate change, resource and food security, biosecurity and terrorism.

While Rudd claimed a ‘deeply realist approach to security’, the more realist speech was from Turnbull, who began by quoting a maxim of one of Asia’s supreme hardheads, Singapore’s Lee Kuan Yew: ‘Big fish eat small fish and small fish eat shrimps.’

Turnbull went on to reflect:

For the shrimp, the little fish and even the middle- to large-sized fish of all dimensions represented here today, we face more than a Manichean choice between life and death, war and peace. The more salient question—even when the risk of war remains remote—is what kind of peace can we maintain?

Turnbull’s answer was to keep the ‘US-anchored rules-based order’. But that ‘remarkable system’, where big and small fish agreed to play by the rules and respect each other’s sovereignty, ‘could not be taken for granted here in the Indo-Pacific.’

Albanese, too, made several references to the need for rules, a familiar drumbeat at Shangri-La. But his great plea was a simple call for the US and China to start to talk, to build strategic ‘guardrails’: ‘This is a matter of simple, practical structures to prevent a worst-case scenario. The essential precondition for this is dialogue.’

The region that the three speeches described has changed from Rudd’s Asia–Pacific to the Indo-Pacific of Turnbull and Albanese. Australia was one of the first to shift to ‘Indo-Pacific’, in the 2013 defence white paper.

China hates the Indo-Pacific concept. In ‘Asia–Pacific’, Beijing imagines itself defining the half that’s taking over, while ‘Indo-Pacific’ is seen as trying to squeeze China between two oceans. At the Shangri-La Dialogue this year, China’s defence minister, General Li Shangfu, made 17 references to the Asia–Pacific. His one Indo-Pacific usage was Beijing’s standard kick at the US’s ‘so-called Indo-Pacific’ strategy which was ‘based on ideological grounds’ and aimed ‘to build exclusive military alliances against imagined threats’.

The Asia–Pacific versus Indo-Pacific difference is an introduction to the clashing perspectives of Australia’s relationship with China. Rudd and Albanese were careful not to poke the dragon at Shangri-La, while Turnbull offered dangerous truths that set the scene for a five-year icy period between Canberra and Beijing.

Rudd’s government had been monstered by Beijing for its 2009 defence white paper, because of its discussion of the strategic implications of China’s rise and the questions China’s power projection capabilities raised for the region.

So at Shangri-La, Rudd took refuge in the uncontroversially unarguable: ‘Managing major-power relations—particularly in the context of the rise of China and India—will be crucial for our collective future. This will place a premium on wise statecraft, particularly the effective management of relations between the United States, Japan, China and India.’

Turnbull warned against taking ‘unilateral actions to seize or create territory or militarise disputed areas’ (talking to you, Beijing) and seeking international influence through ‘corruption, interference or coercion’ (ditto). Turnbull accepted China’s larger role in shaping the region but said:

Some fear that China will seek to impose a latter-day Monroe Doctrine on this hemisphere in order to dominate the region, marginalising the role and contribution of other nations, in particular the United States. Such a dark view of our future would see China isolating those who stand in opposition to or are not aligned with its interests, while using its economic largesse to reward those toeing the line … A coercive China would find its neighbours resenting demands they cede their autonomy and strategic space, and look to counterweight Beijing’s power by bolstering alliances and partnerships, between themselves and especially with the United States.

Turnbull’s description of a ‘coercive’ China seeking to ‘dominate’ predicted the iciness that followed.

One year into his warming project with Beijing, Albanese described putting ‘dialogue at the heart of our efforts to stabilise our relationship with China’:

We’re not naive about this process, or its limitations. We recognise there are fundamental differences in our two nations’ systems of government, our values and our worldviews. But we begin from the principle that whatever the issue, whether we agree or disagree, it is always better and always more effective if we deal direct.

The centrality of the US alliance to Australia is so, well, central that each of the PMs needed to bless the alliance with only a few words. For Rudd: ‘Australia’s close alliance with the United States will remain the bedrock on which Australia’s national security is built.’ For Turnbull: ‘a deep alignment of interests and values but it has never been a straightjacket for Australian policy-making.’ For Albanese: ‘a bond of shared values and it remains a partnership of shared strategic interest’.

ASEAN centrality is newer and got more attention in the three speeches.

Rudd embraced ASEAN as he tacitly conceded that the grouping had defeated his campaign for the creation of a new Asia–Pacific Community. Rudd’s call for a new big-C Community had been kicked to death by ASEAN in 2008 as a threat to its centrality. Thus, at Shangri-La in 2009 Rudd buried the big ‘C’ Community and pivoted to a small ‘c’ community with ASEAN at its heart, arguing: ‘An Asia–Pacific community could be seen as a natural broadening of the processes of confidence-, security- and community-building in Southeast Asia led by ASEAN, while ASEAN itself would of course remain central to the region and would also be an important part of any future Asia–Pacific community.’

The bruises ASEAN inflicted on Rudd’s unsuccessful effort at new regional architecture taught a vivid lesson. Canberra got the power message and regularly gushes praise of ASEAN’s central role.

For Albanese, the ‘emphasis on both agreement and action, cooperation and capacity’ is ‘at the heart of ASEAN’. Or, in Turnbull’s words: ‘ASEAN embodies opportunity in our region. It is the region’s strategic convenor.’

Australia just wants more of the same with added juice, as Turnbull observed: ‘As our strategic spaces become more crowded, the challenge for ASEAN is to show that the impressive statecraft of the past can be sustained in a more complex future; to remain nimble enough in a more testing time.’

Tracking through the three speeches shows a troubled trajectory.

The Australian journey has been from Rudd’s community, to Turnbull’s call for rules in the face of coercion, to Albanese’s fear of the worst case.

What was once grand vision now focuses on the need for guardrails.

China’s campaign of economic coercion against Australia failed because of support from other Asian trading partners who turned to Australia to secure their energy supplies.

Japan, Korea, Taiwan and India—Australia’s second, third, fourth and fifth largest export markets—have each doubled their purchases of Australian goods since 2019, offsetting China’s attack on key export industries which began in 2020.

Exports to Vietnam and Indonesia have also more than doubled, while sales to the Philippines are up 82%.

However, Australia’s closest allies and AUKUS partners, the United States and the United Kingdom, were of little assistance while Australia faced a Chinese trade blockade, with their share of Australian exports dropping to the lowest level since the 1930s depression, in the case of the US, and forever for the UK. American exporters of beef, coal and timber exploited the Chinese embargo to seize Australian markets.

The reordering of Australia’s export markets has primarily been driven by demand for Australian coal and LNG. The disruption of global energy markets caused by Russia’s invasion of Ukraine resulted in shortages of both, sending prices soaring.

Japan’s purchases of Australian coal rocketed from $17.0 billion in 2019 to $57 billion last year while its imports of LNG rose 70% to $35 billion.

The increases in Korea over the same period were similarly phenomenal: coal purchases from Australia rose 140% to $17.2 billion, while its imports of Australian gas tripled to $13 billion.

Deprived of supplies of Australian coal, China, meanwhile, suffered ‘brown-outs’ in many cities in 2020 while its steel-making operations will have suffered from excessive use of inferior domestic coal, which shortens the lifespan of its coke ovens. China’s purchases of Australian coal went from $13.7 billion in 2019 to nothing last year. Coal was the first previously banned commodity that China started buying after the thaw in trade relations this year.

The transformation of Australia’s trade profile has been extraordinary. In 2019, before China initiated its campaign of coercion, Australia’s market in China was 81% greater than our combined sales to Japan and Korea, our second and third biggest markets. There was literally no contest to Chinese dominance.

By 2022, the combined Japanese and Korean markets were almost the same size as China’s, falling short by just 3.7%. The transformation in Australia’s trade profile is evident across Asia. The 10 biggest Asian trading partners, excluding China and Hong Kong, now import 80% more Australian goods than China. Three years ago, their combined imports from Australia were the same as China’s.

China has long used access to its markets as a tool to achieve political ends in foreign markets, ever since boycotts of US products were organised in the early 1900s to force change in what was then a racist US migration policy. The first academic study of China’s use of trade as a weapon was written in 1930.

In recent times, Norway, France, the Philippines, Japan and South Korea have all suffered Chinese boycotts. However, there has never been a campaign as large and targeted as the one it launched against Australia after the Morrison government called for an inquiry into the origins of Covid while China was still smarting over the foreign interference legislation, the banning of Huawei’s participation in 5G, and a clamp on Chinese investment.

Despite China’s discriminatory tariffs on wine and barley and its informal and WTO-illegal bans on coal, beef, lobster, cotton, wood, nickel and copper concentrates, its total purchases from Australia still rose by 16.6% over the three years from 2019, before the campaign started, and 2022. This was due mainly to the fast-rising price of Australia’s iron ore, which China’s steel industry cannot do without.

Having become far more reliant on Australia, it’s no wonder that Japan is now concerned about the spate of regulatory interventions into Australian energy industry, including threats to curb LNG exports and a big hike in Queensland’s coal royalties last year. There’s speculation that the resource rent tax on offshore LNG will be increased significantly in the May budget which, for the companies that built massive LNG plants under the current tax regime during the boom, could raise concerns of sovereign risk.

Japan’s ambassador to Australia, Shingo Yamagami, has repeatedly warned that confidence of Japanese investors Australia is in jeopardy. The Inpex LNG plant at Darwin is Japan’s largest single foreign investment. ‘It’s hard to imagine the neon lights of Tokyo ever going out, but with Australia now supplying 70% of coal, 60% of iron ore, and 40% of Japan’s gas imports, this is exactly what would happen if Australia stopped producing energy resources,’ Yamagami told an Inpex forum in March.

Leaders of Korea and India have also expressed concerns about their energy security to Prime Minister Anthony Albanese.

Taiwan has overtaken both the US and India to become Australia’s fourth most important export market, with purchases in 2022 of just under $30 billion. Its purchases of Australian coal have leapt from $5.3 billion to $13.8 billion since 2019, while its imports of LNG have risen more than fourfold to $9 billion.

In common with Japan and Korea, Taiwan has also massively lifted its purchases of the grab-bag of ‘confidential items of trade’. These are goods for which the disclosure of country sales would supposedly endanger commercial secrets: they include everything from almonds to golf-balls, but likely mostly comprise alumina and concentrates for copper, nickel, and manganese. Between the three countries, these purchases have risen from $2.5 billion to $12 billion over the last three years.

The second biggest purchaser of Australian coal last year was India, with imports of $23 billion, up from $10 billion three years ago. Coal accounted for 80% of Australia’s sales to India last year. India has also become an important buyer of Australian gold, with sales rising from $266 million to $1.5 billion over the last three years.

While coal and LNG account for the greatest share of Asia’s increased appetite for Australian goods, other commodities targeted by China have also found ready markets elsewhere. Vietnam became the largest buyer of cotton with imports of $1.7 billion, up from just $115 million three years ago, while Indonesian purchases rose five-fold to $515 million. Japan’s purchases of barley rose by 140% to $508 million while there were big increases in wheat purchases across the region.

Without the need for Australia’s resources, the US, the UK and New Zealand were of much less help in the face of China’s embargoes. Exports to the US did rise by 37% over the three years, mainly reflecting purchases of gold. Its share of Australian exports dropped to 3.3%, slipping from fourth to sixth place among Australian markets. New Zealand has dropped from eighth to 10th largest export market, while the UK now ranks 19th, taking just 0.5% of Australia’s exports. Until the 1950s, its share was over 40%.

Australia’s Asian export markets ($bn)

[table id=14 /]

Source: ABS.

The government has accepted sweeping recommendations in a review of Australia’s strategic position and the military capabilities it needs to defend itself, with the main focus on building deterrence through the ability to strike a potential attacker at long range.

Prime Minister Anthony Albanese and Defence Minister Richard Marles today launched the public version of the defence strategic review produced by former defence minister Stephen Smith and former chief of the Australian Defence Force, Sir Angus Houston.

Acceptance of the recommendations signals a major restructuring of ADF capability and operations, including significant changes in the Army’s role. While it loses some of its planned armoured force, it takes on a key missile defence role. Key to the changes across the services will be the urgent development of weapons such as long range and high-speed missiles and the ability to manufacture them in Australia.

The report said that while Australia had for many years faced no direct military threat, it’s strategic circumstances and the risks it faced were now radically different.

‘Intense China-United States competition is the defining feature of our region and our time. Major power competition in our regions has the potential to threaten our interests, including the potential for conflict.’

China’s military buildup was the largest and most ambitious of any country since World War II and it was also engaged in strategic competition in Australia’s near neighbourhood.

Climate change would increase the challenges for Australia including the need for increased humanitarian assistance and disaster relief at home and abroad.

The report warned that Australia did not have effective defence capabilities to deal with these higher threat levels.

‘Although invasion of the Australian continent is a remote possibility, an adversary could seek to coerce Australia through cyber attacks, incursions in our north west shelf or parts of our exclusive economic zone, or disruptions to our sea lines of communication. By developing a resilient and capable ADF that can hold forces at risk in our northern approaches, Australia could deter attacks on Australian forces or territory.

In their report, Smith and Houston defined ‘deterrence’ as compelling an actor to defer or abandon a planned strategy of activity by having in place steps and responses to change its risk assessment and decision making.  ‘Deterrence can be achieved through raising the costs or reducing the benefits to an adversary through denial, dissuasion, or punishment,’ they said.

A central component of deterrence was resilience requiring the ability to withstand, endure and recover from disruption, and Australia must harness all elements of national power to achieve that.

DFAT must be given the resources it needs to lead a nationally determined and strategically directed whole of government statecraft effort in the Indo-Pacific.

The report also said the risk of nuclear escalation must be regarded as real and Australia’s best protection from it was the United States’ extended nuclear deterrence, and the pursuit of new avenues of arms control.

The review said long-range strike and other guided weapons were fundamental to the ADF’s ability to hold an adversary at risk in Australia’s northern approaches.

‘To do this, the ADF must hold sufficient stocks of guided weapons and explosives ordnance (GWEO) and have the ability to manufacture certain items.’

But the review said the GWEO Enterprise set up to provide those weapons was inhibited by the way it was established and it lacked the necessary financial resources and the required workforce. And, said the review team, ‘It is yet to produce a strategy.’

The review ‘strongly recommends’ that a senior officer or official should be appointed with sole responsibility for leading this enterprise with an appropriate underpinning organisational structure.

It said Defence must deliver a layered integrated air and missile defence capability urgently to complement the Army and Navy’s short range capabilities. This must comprise appropriate command and control systems, sensors, air defence aircraft and land- and maritime-based missile defences.

Development of medium-range advanced and high-speed missiles must be accelerated.

Smith and Houston said the existing GWEO program was not structured to deliver a minimum viable capability in the shortest possible time but was ‘pursuing a long-term near perfect solution at an unaffordable cost.’ They said in-service, off the shelf options must be explored. That process should be led by the Chief of the RAAF.

They said they had undertaken detailed discussions in Australia and the US on the B-21 Raider long range bomber as a possible option for Australia, but it concluded that: ‘In light of our strategic circumstances nd the approach to defence strategy and capability development outlined in this review we do not consider the B-21 to be a suitable option for consideration for acquisition.’

The review stressed that the ADF’s key line of forward deployment stretched across Australia’s northern maritime approaches. Integral to it was the network of bases, ports and barracks stretching in Australian territory from the Cocos (Keeling) Islands in the northwest, through RAAF bases Learmouth, Curtin, Darwin, Tindal, Scherger, and Townsville.

The review said upgrades and development of the northern bases, ports and barracks should commence immediately.

Fuel distribution in the north must be made more effective. ‘Deep Defence engagement with the fuel industry is vital in our strategic circumstances.’

This must all be done in the face of significant challenges building the necessary workforce across the ADF, the public service and industry, the review said.

As a large island country, Australia was blessed with strategic depth and that was essential in the age of long-range precision strike which had brought the nation within range of regional capabilities, Smith and Houston said. That made a network of well-established bases and facilities in the southeast, along with HMAS Stirling naval base and RAAF Pearce in WA, critical.

A review is still to be undertaken of the Navy’s surface fleet.

There had to be a new approach to Defence’s evolution to the five domains of maritime, land, air, space and cyber and the ADF must rapidly evolve into a genuine integrated force able to harness effects across all those domains. Crewed and uncrewed undersea warfare capabilities must be optimised for persistent, long-range sub-surface intelligence, surveillance and reconnaissance, and strike. There must be enhanced ability to target and strike targets in all those domains.

Acquiring the necessary capabilities would mean cancelling, delaying or re-scoping Defence plans that did not advance the attributes of the integrated force. Cuts to cover part of the cost of new capabilities include reducing the number of heavy tracked infantry fighting vehicles to be bought for the Army from 450 to 129. Instead, the land force will be increasingly equipped with medium and long-range missile systems.

The government has accepted the review’s recommendations in the public version of the review report signalling a major restructuring of Defence capability to enable it to deal with major military threats.

Albanese and Marles said the government had identified six priority areas for immediate action.

They are the acquisition of nuclear-powered submarines through the AUKUS agreement, developing the ADF’s long range strike capability to improve deterrence and manufacturing these weapons in Australia, improving the ADF’s ability to operate from its northern bases, growing and retaining a highly-skilled workforce, improving the ADF’s ability to turn disruptive new technologies into ADF capabilities in close partnership with Australian industry and deepening of diplomatic and defence partnerships with key partners in the Indo-Pacific.

Albanese and Marles said realising the review’s ambitions would require a whole-of-government effort, coupled with a significant financial commitment and major reform.

They said the government was making the hard decisions necessary to cancel or reprioritise Defence projects or activities no longer suited to Australia’s strategic circumstances.

Marles said the review, and the Government’s response to it, was about maintaining peace, security and prosperity in the region. ‘There are a lot of tough decisions which need to be made, but in doing so, we are making them in the best interest of our defence force and our nation.’

‘Work to implement the review starts today, ensuring our ADF and our Defence personnel have the capability they need to keep Australians safe.’

The Albanese government deserves credit for its handling of the China relationship. Its dual-stream strategy of ‘co-operating where possible and disagreeing where necessary’ has so far enabled diplomatic re-engagement without compromising Australian policy. But is the approach sustainable, or is it only feasible when the streams do not cross?

The government, and in particular Foreign Minister Penny Wong, has wisely referred not to a ‘reset’ but a ‘stabilising’ of relations. But what does stability mean in the long term? For Australia, it means making routine the protection of national sovereignty and adherence to international rules. Beijing, however, will seek a stability that means no new Australian policies it regards as ‘anti-China’.

These objectives are not compatible, which means either we need to live with ongoing tension and intermittent disagreements, or one country compromises on its strategic interests.

A test of the approach’s sustainability was inevitable—and in fact it has already arrived. In 2021, Australia launched two World Trade Organization cases against China relating to wine and barley, which were among the exports Beijing targeted in a series of coercive trade strikes aimed at getting the Australian government to change its policies on non-trade issues such as the South China Sea, foreign interference, 5G, human rights, Taiwan and Covid-19.

Beijing has suggested that it might end its spurious trade measures if Australia drops its WTO cases. This would be a major mistake by Australia and would constitute the first backward step on Australian policy—an unacceptable Rubicon that would signal Canberra is prepared to put short-term economic gain ahead of sovereignty and international rules.

Trade Minister Don Farrell told The Australian in late December that Australia preferred to resolve the disputes ‘by discussion’ than by WTO arbitration, and even referred to the possibility of Beijing’s reducing its coercion as ‘goodwill’—an unfortunate phrase suggesting that Australia might even return such goodwill.

The measures have both been in place for more than two years. That’s more than two years of unjustified economic loss that we do not get back.

A simple abandonment of the disputes through a deal outside of the WTO would mean China faces no consequences for its coercive behaviour. It would signal to international vandals that they can trash the rules and then, when their outlaw behaviour doesn’t pay off, simply walk away.

As a country that believes in a system of rules—both because it reflects our values and because it protects our national interests—Australia should be setting an example: unfair trade practices need to be properly dealt with by adjudication and the costs properly accounted for.

True, the WTO encourages parties to resolve disputes themselves. But this is only the best course if resolution is managed quickly, not when one party has inflicted years of unjustified cost on the other. There is an understandable desire to end the pain for affected wine and barley producers. But the WTO is expected to rule on the cases by the middle of this year, so there is no strong argument on pragmatic grounds that we should just cut our losses.

Many observers have no faith in the WTO. But that shows the need for responsible nations such as Australia to take action and support reforms that make international institutions more effective, which in turn means showing confidence that the institutions can work.

Granted, the penalty system is not perfect. But the real consequence for Beijing would be at a higher level. The reputational cost of a finding against China by an international institution would be more powerful than a single country’s claim alone, and it would galvanise international support for rules and disincentivise future coercive tactics.

We should look at the example Japan set after Beijing halted shipments of rare earths in 2010, in an attempt to coerce Tokyo over the disputed Senkaku Islands while also giving Chinese companies a competitive advantage in products such as hybrid car batteries.

After diversifying its sources of rare earths to avert a manufacturing crisis—and to make sure the coercion couldn’t be repeated in the future—Japan still went through with a WTO case. The WTO found in Japan’s favour and China was forced to drop its export restrictions.

These trade disputes aren’t just about the economic relationship. Trade is inseparable from strategy and security. China itself has demonstrated this by using trade to ­coerce Australia over sovereign decisions it made in other realms.

And this year will not be a year in which Australia can hide from the truth of its strategic circumstances. The defence strategic review and the decision on the ­optimal pathway for Australia’s nuclear-propelled submarine are both responses to China’s aggressive rise.

Our diplomacy should not suggest otherwise. In international affairs, a good cop (foreign ministry), bad cop (defence ministry) routine does not work. All it does is project inconsistency that authoritarian regimes can exploit.

The forecast investment in defence capabilities and technology is vital for our ­future. There must be a complementary and overarching narrative that brings the public—here and abroad—along for what will, at times, be a bumpy ride.

Japan, as this year’s G7 host, has made it clear economic coercion will be a major item at the summit in Hiroshima in May. Our partners and allies—many of whom have also experienced Beijing’s economic coercion—will be watching more closely than ever.

Consistency is essential, and that means passing this test on trade. A strategic win for Beijing would likely nudge us on to a path on which we become tempted to speak more softly or even self-censor on Chinese transgressions, whether they be in the Taiwan Strait or Xinjiang, or cyberattacks and foreign interference. This can quickly push leaders and policymakers into the habit of second-guessing or delaying policies that are in our national interest but might upset Beijing. Once you are in this position, it is hard to get out.

Withdrawal from the WTO cases without consequences for Beijing would also involve Australia withdrawing from our international leadership because it would boost the likelihood that Beijing repeats its coercion against other, smaller nations.

Above all, dropping the cases would mean Australia is no longer able to say the government’s approach to China has not involved any major change to foreign, defence or strategic policies. The precedent will be set that ­policy can be changed to appease Beijing.

Like it or not, strategic competition is here. We are competing for the shape of the evolving regional and international system—of which fundamental principles such as trading fairly according to rules that apply to all economies is a central feature.

If Australia chooses not to participate, we forgo our chance to have an influence. The competition will continue without us, and our future will be in the hands of others, including those who are ready to take advantage of any weakness.

Foreign Minister Penny Wong’s trip to Beijing this week was the next logical step in the bilateral thaw and should be welcomed by everyone who wants Australia to be well positioned for the turbulent decades ahead.

Diplomatic engagement with the Chinese government is important, even as its belligerent international actions and growing domestic oppression alienate countries across the world and make constructive discussions more difficult. The visit—the first by an Australian minister since 2019—came at the invitation of the Chinese government. The Labor government should be congratulated on the sober approach that has made this possible and created the opportunity for Wong to deliver important messages on Australia’s priorities. It is further evidence of the merit of the two-track approach of measured tone with strong policy.

Nonetheless, both of these elements will continue to be challenged beyond the visit. Assuming such engagements continue and increase, the Australian government needs a clear pathway setting out what it aims to achieve and how it intends to respond to Beijing’s short-term expectations of silence and longer-term demands of changed policy.

After all, Beijing would have developed its own expectations and demands with complete clarity before inviting Wong. The visit was never an end in itself for Beijing, so it cannot be for Australia either.

The key remains to faithfully reflect the strategy of stabilisation that Wong and Prime Minister Anthony Albanese have pursued since winning office in May, with their commitment to ‘co-operate where we can, disagree where we must and engage in the national interest’.

The visit does not represent a step towards fundamental reconciliation. China and Australia stand on either side of a growing chasm on interests and values. Disagreement on core issues and principles will continue to produce points of friction.

Albanese and Wong have moderated Australia’s rhetoric to create the best chance for diplomatic engagement, while Beijing is making some tactical adjustments in its foreign relations in the face of domestic economic headwinds and inter­national criticism, but neither of these developments will lead to a shift in the Chinese Communist Party’s long-term strategic goals. Stabilisation will require diplomacy that not only minimises deterioration but also protects Australian interests.

Australia’s China policy needs to be steadfast on what those interests are. Australia cannot accept the use of hostage diplomacy and the arbitrary detention of its citizens, the use of economic coercion, destabilising military behaviour in the Taiwan Strait, South China Sea or on the Indian border, and malign interference in domestic politics.

There is also the thorny agenda item of human rights. Just three months ago, the UN Human Rights Office concluded that the Chinese government’s oppression in Xinjiang might amount to crimes against humanity. So far Australia has refrained from imposing sanctions on relevant officials using Magnitsky laws, unlike close partners. With these sanctions powers being used by the government against officials in Iran and Russia but not China, this looks like an attempt to prioritise stability in the relationship, which risks sending a message to China and the Australian public that Canberra will look the other way on human rights in the name of commerce.

Wong has likely taken note of the lessons from German Chancellor Olaf Scholz’s recent visit to Beijing, which was a demonstration of trade ties being prioritised over strategic interests. The delegation of heavyweight industry executives on the trip left the distinct impression that Scholz was there to pursue commercial objectives at the expense of other concerns and alignment with key international partners. Scholz has come under acute political pressure domestically and regionally for his China positioning.

The Albanese government’s approach looks different. However, it will continue to be tested on how it learns to live with inevitable tensions, rather than how it can find any and all measures, including self-censorship, to assuage those tensions. China, for instance, may look for support to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in return for reinstating market access for some Australian products, despite its widespread use of coercion and unfair industrial policies rendering it undeserving of CPTPP membership.

The fact that some sections of the business community have seized on the thaw to talk bullishly about resum­ing levels of trade and investment enjoyed before the Covid-19 pan­demic and Beijing’s imposition of coercive measures on Australia raises doubts as to whether the lessons about heightened risk are being fully absorbed.

On arbitrarily detained Australians, the Albanese government cannot offer any concession in return for their release—that would be rewarding the relinquishment of behaviour that should never have happened in the first place. Wong is committed to and doing everything to ensure their release. As we approach four years since writer Yang Hengjun was arbitrarily detained, release should not come in return for policy compromises.

Australia is far from alone in having an increasingly difficult relationship with China. Japan’s new national security strategy states that China’s actions pose ‘the greatest strategic challenge in ensuring the peace and security of Japan and … of the international community’, while India is having to manage Chinese troop incursions on its border.

Our closest partners in the Indo-Pacific and Europe are toughening their policy settings and deepening collaboration to counter the growing challenge as it becomes increasingly clear that the CCP under leader Xi Jinping is willing to compromise mutually beneficial economic and business interests in the name of ideological or security objectives.

The CCP’s ambition is to rewrite global rules to enable its own domestic and international objectives. High-level meetings between Australian and Chinese leaders cannot change this reality. They are important and welcome, as long as they are accompanied by a long-term strategy of maintaining national security policies and working with partners to build regional resilience and deter Chinese aggression.