Beijing has repeatedly misunderstood Australia and Australians, so whomever it might ‘pick’ out of particular parties, its track record of judgement has been terrible.

China’s leaders thought using the country’s trade with Australia in lobsters, barley, wine, wheat and coal as a weapon would change the government’s policy on China’s aggressive cyber hacking, political interference and growing military intimidation of others in our part of the world.

They were wrong.

I’m pleased the chief of the Australian Security Intelligence Organisation has made it clear that foreign interference activities by states like China—and Russia—are real and threaten the integrity of all political parties unless we are clear-eyed and calm in countering them. He’s told us that spying and foreign interference now outweigh terrorism as threats to Australia. He’s also said foreign interference is a threat every political party has to take seriously.

Beyond the generalised warning, though, I’d rather see even more clarity both from ASIO and from our parliament in getting specific about who is doing what. Without that, there’s a risk of creating confusion and uncertainty.

It shouldn’t be left to a senator like Kimberley Kitching to have to use parliamentary privilege to tell Australians details about the recent plot ASIO disrupted, even if we should be glad she did so.

ASIO should get comfortable naming the key individuals behind such plots and the foreign government they were serving. Doing so can only help our understanding and keep our democracy resilient.

We’ve seen an inability to name the problem publicly, with phrases like ‘a sophisticated state actor’ and ‘country-agnostic’ policies, for too long. Naming problems helps face and resolve them.

There is indeed bipartisanship on Australia’s China policy—and both major parties know they need to have strong policies on China—because of the actions of the Chinese government and because public opinion in Australia has hardened against Xi Jinping and the way he is using Chinese power.

That same shift in assessment of China is happening in other parts of the world—notably Europe, North America, India and Japan.

But policies need sustained implementation. And when you are dealing with a powerful, coercive regime like the one led by Xi, that takes continued political will. The current debate is reminding us all of that.

It’s also a reminder that times have changed radically in the 10 years since the then Australian government—Julia Gillard’s government—released the optimistic Australia in the Asian century strategy that saw only the upside of economic engagement with the region, notably China.

Any party governing Australia after the forthcoming election needs to understand in its bones that there is no ‘reset’ moment that takes us back to the future. There are still businesses and also officials at state and federal level who harbour nostalgic dreams of a return to the plan of increasing Australian access to the China market.

But, without cringing and damaging concessions—see Beijing’s list of 14 grievances—in which Australia demonstrates penitence and contrition for daring to have differences with the Chinese Communist Party regime, there’s not the remotest prospect of new directions for the relationship while Xi rules China and conducts a ‘great closing’ after Deng Xiaoping’s great opening to the world.

Below the level of simple statements about China policy, there’s a heaving mass of issues that the Australian government will need to keep taking decisions and talking about. How important is collective action by the world’s powerful democracies given the now concerted actions of two autocratic powers—Russia and China—against our interests and values? How do the very different political systems in the democratic and authoritarian worlds engage digitally and in areas of data and technology?

How much does Australian policy, regulation and investment need to push and support our companies and universities to accelerate their diversification strategies away from long-term all-in bets on the China market? Will Australia seek to be a leader in any of these debates and areas of decision or be a fast and quiet follower?

Fortunately, Australian policy on China is bringing us closer to powerful friends—as demonstrated by the US, Indian and Japanese foreign ministers, Antony Blinken, S. Jaishankar and Yoshimasa Hayashi, coming to Melbourne just last week. Their Quad meeting happened in the midst of the Russia–Ukraine crisis, but the fact that it happened at that time and kept its focus on the challenges to security and public health in our region shows this.

Whoever wins government in the next Australian election, their job will be to serve Australia’s national interest by working on the China challenge with our close partners and friends—and by being honest with Australians about the practical challenges Beijing brings.

ASPI celebrates its 20th anniversary this year. This series looks at ASPI’s work since its creation in August 2001.

Dealing with China and the United States is a two-horse challenge.

One of the great Oz realists, Owen Harries, captured the dilemma in typical vivid fashion at ASPI’s 2006 Global Forces conference: ‘We’re going to have to learn to ride two horses simultaneously, which is not the most comfortable of feats. We’re going to have to cultivate a greater degree of complexity and ambiguity than we have in the past.’

The rough ride has arrived.

Xi Jinping pushed in the South China Sea. China grew louder and sharper. When Donald Trump took power, the US gyrated. The US always has options about its role in the Indo-Pacific, and Trump offered a vision that was isolationist and ‘America first’.

Canberra’s dealings with Beijing became icy. Australia’s number one trading partner delivered trade punishment.

The China–US ride prompted recurring intellectual stoushes between ASPI’s first executive director, Hugh White, and the institute’s third executive director, Peter Jennings. ‘We’ve been talking about these things for decades,’ White observed in one of his microphone jousts with Jennings.

The two fronted the lectern for a debate in 2013 over the choice White offered in his book The China choice: why America should share power. Then they sat down in front of the ASPI camera again in 2014 for a return bout.

A multi-author discussion on The Strategist became an ASPI paper, To choose or not to choose: how to deal with China’s growing power and influence.

White defined his key difference with Jennings as a view about the future of the regional order:

I think the order is going to change—indeed, is already changing. It’s simple. Asia has been stable since 1972 because China has accepted US primacy as the foundation of the Asian order. China did so because it believed it was too weak to contest it effectively. Now China believes it’s strong enough to contest US primacy, and it’s doing so.

The choice, White wrote, was between accommodating China or confronting it as a rival. The more firmly China’s ambitions were resisted, ‘the faster strategic rivalry will escalate’.

Peter Jennings’s attack was that in the Asia–Pacific the Hugh White road was the road not taken, because the fork on that road was either subordination or incineration:

[N]owhere in the civilised world is the China Choice logic gaining traction. Countries in the Asia–Pacific stickily persist in cooperating with each other; in wanting the US to remain engaged; in building defence capabilities and otherwise refusing to sacrifice their own interests to give China more breathing space.

Dealing with China ‘brings into play American idealism and Australian pragmatism,’ Ross Terrill wrote in Facing the dragon. Between the two extremes of Beijing and Washington seeing each other as a ‘threat’ and a China–US condominium, Terrill hoped for a peaceful competition that offered Asia breathing room:

While some Australians may view China as the new America to lead the Asia–Pacific, China has a less dramatic view of Australia. We’re useful but not indispensable to Beijing, and less politically important to it than China is to us. Shared experiences haven’t brought us to this moment of economic partnership, and the Chinese owe us no guiding loyalty.

China would be ‘Australia’s greatest foreign policy challenge during the 21st century,’ David Hale declared in 2014 in China’s new dream. He described a Canberra nightmare if America’s fiscal problems forced it to slash defence spending and withdraw from the East Asian region:

In such a scenario, Australia would cease to have a great-power ally and be more vulnerable to foreign aggression than at any time since 1942. The only Asian country with the long-term potential to challenge Chinese hegemony is India. Australia should therefore hedge its bets with the US and China by pursuing better relations with New Delhi.

Surveying ANZUS and alliance politics in Southeast Asia under President Trump, William Tow observed that the greatest impediment to alliance credibility was Washington’s tendency to oscillate between commitment and alliance detachment, between internationalism and neo-isolationism. The true test of the Trump administration’s ‘free and open Indo-Pacific’ policy, Tow wrote, would be to overcome ASEAN and Australian concerns that Washington was easily distracted.

The idea of ‘Chimerica’—the joining of China and America—had ended, John Lee pronounced in 2019. Chimerica had rested on a global economic consensus that had passed. Instead, Lee described the rise of US–China technological contest and strategic hypercompetition.

A long period of Chinese economic and trade malpractices had distorting effects on the global economic system, Lee wrote, and US dissatisfaction was irreversible:

The deepening tension isn’t a transient phase in US–China relations. China has long treated America as a comprehensive rival. The US has finally accepted that reality, and that pessimistic conversion is deep and enduring. The administration’s turn against China is perhaps the only policy of Trump’s that the Democrats overwhelmingly support.

US voices for the containment of China were getting louder, Peter Varghese told a 2019 ASPI conference, and dangers loomed. The former secretary of the Department of Foreign Affairs and Trade said there was nothing new about US determination to hang on to strategic primacy. What was new was the call to block or thwart China, Varghese said:

Containing China is a policy dead end. China is too enmeshed in the international system and too important to our region to be contained. And the notion that global technology supply chains can be divided into a China-led system and a US-led system is both economic and geopolitical folly.

The US is right to call China to account. But it would be a mistake for the US to cling to primacy by thwarting China. Those of us who value US leadership want the US to retain it by lifting its game, not spoiling China’s.

China’s rise needs to be managed not frustrated. It needs to be balanced not contained. Constructing that balance and anchoring it in a new strategic equilibrium in the Indo-Pacific is the big challenge of our time.

Taiwan had returned as a critical security question for Australia, Mark Harrison wrote—an issue framed by the US alliance and a longstanding risk calculus for Australia–China relations. Australia’s thinking rested on pragmatism and realism, he said, but Beijing’s treatment of Taiwan challenged Australia’s medium- and long-term interests.

The Chinese trade punishment that began in 2020 cut the value of Australian trade with China for almost all industries by 40% (only China’s huge appetite for iron ore sustained the trade figures). Australia’s ambassador to Beijing, Graham Fletcher, said that China ‘had been exposed as quite unreliable as a trading partner and even vindictive’.

The idea of Australia having a ‘strategic partnership’ with China faded.

Canberra had accepted Beijing’s ‘strategic partnership’ language during the Gillard Labor government in return for an annual summit. The foreign minister who did the deal in 2013, Bob Carr, wrote that ‘strategic partnership’ was ‘the shorthand description of what they want from us, and what we will agree to in order to get them to give us guaranteed annual leaders’ meetings’.

In February 2021, Prime Minister Scott Morrison bid adieu to strategic partnership:

China’s outlook and the nature of China’s external engagement, both in our region and globally, has changed since our Comprehensive Strategic Partnership was formed and going further back than that, certainly in the decades that have led up till now. We cannot pretend that things are as they were. The world has changed.

Today, Beijing doesn’t take phone calls from Australia’s leaders.

Peter Jennings offered a set of conclusions about the icy relationship:

• We’re going to be on this roller-coaster ride for years: ‘National positions are hardening. Neither Beijing nor Canberra will back down and the prospects for “negotiation” are zero given China’s “wolf warrior” mania.’
• The Morrison government looked increasingly confident in its stance: ‘The language used about relations with China is careful but is becoming clearer and more definitive. There is something to be said for knowing when your back is hard up against a strategic wall.’
• Shrill and threatening rhetoric from China’s embassy in Canberra and from the foreign ministry in Beijing was counterproductive: ‘Beijing’s usual Australian support base has largely gone to ground and public opinion has massively swung against the People’s Republic.’
• Beyond the bilateral struggle with China, a positive international agenda beckoned for Australia: ‘[O]ur ability to draw on strong alliances and deep friendships with like-minded democracies is the reason that we will prevail against Beijing.’

Scott Morrison’s observation about Australia–China relations was equally true for the US and China: ‘We cannot pretend that things are as they were. The world has changed.’

Drawn from the book on the institute’s first 20 years: An informed and independent voice: ASPI, 2001–2021.

Last week it emerged that the Western Australian government, in an apparent attempt to appease the Chinese Communist Party, had given itself the right to stop people from hiring certain public venues if they identify ‘with countries whose political status is unclear or in dispute’.

How effective are Australia’s legal defences against foreign governments’ exertions of influence in this country?

In 2018, the Turnbull government legislated the Foreign Influence Transparency Scheme Act 2018 (FITS Act). The consequence: those who engage in influence activity (such as lobbying or other political communications) must disclose the details where it’s on behalf of a ‘foreign government related entity’. Particulars appear on a public register.

Two years later, the Morrison government introduced the Australia’s Foreign Relations (State and Territory Arrangements) Act 2020 (Foreign Relations Act). Under that act, agreements of state and local government bodies with foreign governments are publicly registered. The federal government can terminate them if they’re inconsistent with Australian foreign policy.

There appears to be no Western Australian arrangement on the public register that would explain the Perth Theatre Trust’s unusual preoccupation with geopolitics.

Whatever the reasons for that, these two acts constitute the Australian government’s legislative response to foreign influence. The laws are, of course, the product of Canberra’s collective executive and parliamentary processes. Prime ministers Malcolm Turnbull and Scott Morrison were very wise to establish this framework. Under their leadership, Australia set an example that’s now being emulated in the UK.

As Turnbull and Morrison recognised, we need these laws, and we need them to work.

And when it comes to legislation designed to defend our national sovereignty, we should always be prepared to acknowledge any failings frankly, and make the necessary amendments. Now that Australia’s foreign influence laws are in place, there’s an opportunity—and an urgent need—to strengthen them so that they work as intended.

In my new report, published by ASPI today, I argue that Australia’s statutory response to foreign governments’ influence efforts suffers from a serious weakness. Its name is country agnosticism. Under that precept, the laws treat all foreign influence activities, no matter what their country of origin, the same way.

The FITS Act regulates communications on behalf of British and Chinese entities alike. The Foreign Relations Act burdens a local council that enters a sister-city relationship with Honolulu much the same as it burdens a state government that enters a Belt and Road agreement with the Chinese government.

With country agnosticism, we took a wrong turn. It has imposed sweeping, unnecessary regulatory costs. It has caused waste of taxpayer-funded enforcement resources. It has diverted those resources from the issues that really matter. It has brought unnecessary legal complexity. And, as a consequence of all this, it has produced a legal framework that’s sporadically obeyed and half-heartedly enforced.

Yet for all that, nobody believes that these laws are truly country agnostic. Not the Australian media, which routinely describe the laws as ‘aimed at’ China. Nor, presumably, the media’s audience. Nor, certainly, the Chinese Communist Party, which regards itself as the target, explicitly citing the laws as a key grievance. So, if country agnosticism was meant to avoid giving anyone the impression that the laws are China-focused, then it has failed.

Country agnosticism is a shrivelled fig leaf in a diplomats’ parlour game. And the game is expensive. Its costs are paid by the Australians who must adhere to the laws and finance their enforcement. Those taxpayers pay the premiums for country agnosticism, and are rewarded with a $25 billion CCP trade war. Country agnosticism is an insurance policy that doesn’t insure anything.

Perhaps the greatest cost of country agnosticism is that the statutory framework isn’t as effective as it needs to be. Why? In adopting a country-agnostic stance, we wilfully blinded ourselves to the very factor that matters most in evaluating and responding to foreign influence—its source country.

It’s time to remove the blindfold. We should recognise this basic truth: foreign influence regulation must be more stringent in relation to some source countries than others.

Greater stringency is needed where the source is a jurisdiction in which the ruling party’s control permeates the entire society, allowing it to exert power through public and ‘private’ entities alike. Our laws won’t illuminate that kind of authoritarian government’s influence in Australia unless they apply to a broad range of conduct and entities. If they cover only what Australians usually understand as government entities—state-owned enterprises, for instance—then they’ll largely miss their mark. And they’ll do so precisely when it’s most important to hit the target; the influence efforts of authoritarian regimes are the very efforts that are most likely to do fundamental damage to our national sovereignty and security.

Conversely, when we cast the legal net as wide in relation to liberal democracies as we must over their authoritarian counterparts, we wind up regulating a lot of activity that doesn’t have a foreign government as its ultimate puppetmaster.

When it comes to certain countries, in other words, the regulatory and administrative costs of stringent transparency requirements are worth it; in other cases, they aren’t.

Because foreign influence is permitted on the proviso that its governmental source is transparent, everything rides on how effectively that proviso is put into practice. To bring a democratic government’s influence efforts out of the shadows, only minimal regulation is needed, but the same can’t be said of authoritarian jurisdictions where the tentacles of official power extend further. That contrast between foreign political systems is obvious, yet it’s the very thing that country agnosticism insists we ignore.

Accordingly, Australia’s foreign influence laws should be amended to adopt a ‘tiered model’, under which conduct originating in certain ‘designated countries’ would be subject to greater regulation than activity from other sources. The ministers responsible for our foreign influence laws should be empowered to designate the source countries that warrant greater transparency. Designation would be based primarily upon an assessment of the foreign state’s political system—in particular, the degree to which the foreign government controls ostensibly ‘private’ entities and deploys them to advance its national security goals.

Another relevant factor would be the foreign government’s track record of attempting to influence Australians for unwelcome purposes.

Those purposes may or may not include the silencing of Tibetan or Taiwanese voices at Australian taxpayer-owned venues.

The big positive from the federal government cancelling Beijing’s two Belt and Road Initiative agreements with the Victorian government is that Australia is getting coherent policy nationally. That national policy is centred on not wanting to help the Chinese Communist Party create a China-centred global economy, whether through the BRI or Xi Jinping’s ‘dual circulation’ economic strategy.

Handing the Chinese government more power to coerce us economically is clearly not in our interests. If we don’t know that now, with wheat, coal, wine, barley and lobsters, we’re slow learners.

The BRI is about much more than soft loans to build infrastructure—as the cancelled BRI framework agreement Victorian Premier Daniel Andrews signed shows. Its ambitions reach into advanced manufacturing, biotechnology, agricultural tech, research and technological innovation. And deep engagement with Chinese state-owned and other corporations in these areas comes with the involvement and attention of the Chinese state baked in.

So, this decision will create international interest from other leaders looking at the BRI, by making them think beyond promises of free jobs and growth without consequences. That’s exactly what Australia’s 5G decision from August 2018 has done.

If Beijing takes further steps to coerce Australia through trade, that will highlight to Australians and to many other governments and companies globally why the decision is the right one.

It will also reinforce corporate Australia’s new understanding of the sheer business risk in corporate plans that place big bets on growing their China market.

A further effect of the federal government’s decision is that it ends a fracture on China policy, in which there was unity of direction and purpose between the federal government and the federal parliament, including the opposition Labor Party, but an explicit and important policy conflict with a large state government.

That matters, because a line of effort for China’s government is to fracture other governments, notably those that are part of the US alliance network, because doing so diminishes the power of that alliance network to Beijing’s advantage. That’s why Chinese officials from Xi down rail about alliances and ‘Cold War mentalities’. Pushing forward with implementing Australia’s new laws on countering foreign interference in our domestic policy and debates while leaving this federal–state fracture in place would simply make no sense.

I doubt Foreign Minister Marise Payne took any joy in making these decisions. And it’s a concern that the Victorian government persisted for so long in running an independent foreign policy in such a key relationship. Being so obviously out of step with public opinion on China and with the federal parliament and government means it’s quite possible that the Victorian government can see the end to its connection to Xi’s BRI as a relief—even more so because it didn’t have to cancel it itself.

Payne’s announcement of these decisions right before she met with her New Zealand counterpart, Nanaia Mahuta, is useful, even if the timing may not have been done through deep design.

That’s because the cohesive national policy Australia is building is suitable for dealing with the assertive China we see under Xi, and is a major shift from the decades-long Australian policy of seeking mutual economic engagement with China while putting security and strategic differences in the background.

The policy shift that has been underway since 2015 recognises that Australia’s previous policy can’t work in a world where China is asserting its power so overtly in ways that bring security and strategic differences into the foreground.

New Zealand, by contrast, is continuing with this mutual engagement approach and seeking to manage differences through ‘quiet diplomacy’. We saw this with Mahuta’s recent speech on China and the way that speech was consistent with NZ Trade Minister Damien O’Connor’s comments earlier this year about Australia needing to show China more respect.

New Zealand will find that its policy framework collides with NZ values and interests, even if its purpose is to protect NZ’s China trade. There are also likely to be growing problems in NZ seeking to maintain a very close partnership in the Five Eyes while taking the approach outlined in its foreign minister’s speech.

Quietly assuring Five Eyes partners that everything is fine, while also assuring Beijing of the same thing, is not sustainable unless China radically changes direction under Xi. As the long-term Queensland premier Joh Bjelke-Petersen said, ‘You can’t sit on the fence and keep your ear to the ground without horrible things happening.’