Australia's China policy under Kevin Rudd

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Last Updated: 3 June 2008

Australian Prime Minister Kevin Rudd (R) spent four days in China in April 2008, which included trade talks with Chinese Premier Wen Jiabao (L). [Reuters]

Australia regards its relationship with China as a good one, so will it get better under a Mandarin speaking Prime Minister?

This short paper, by Radio Australia's Karon Snowdon titled "A New Australian Government - Implications for Foreign Policy", presents a few ideas on how the relationship might develop with a new government in Canberra and as China changes.

What an interesting time to be writing about China in the world.

The violent crackdown in Tibet, the protests during the Olympic torch relay, the forthcoming Games, all have thrown yet more attention, positive and negative on perhaps the most scrutinised country right now.

Australia too is at an intriguing juncture.

At the end of 2007, a significant change of politics took place.

After 12 years of a conservative Liberal/National Party Coalition under the leadership of Prime Minister John Howard, the centrist Labor Party won office in national elections with a healthy majority.

John Howard, who took some personal pride in being the second longest serving PM in Australia's history, not only led his party to defeat, but suffered the loss of his electoral seat and departed politics altogether.

In his stead, Kevin Rudd, former diplomat, knowledgeable of China and a fluent Mandarin speaker became Prime Minister.

Soon after taking office in November Kevin Rudd moved to put his own government's stamp on a revitalised foreign policy.

In the international arena he wants Australia to assume its proper place as "creative middle power". [1]

The three pillars of his government's foreign policy are the US Alliance, a more active United Nations membership and comprehensive engagement with Asia and the Pacific.

The UN aside, the pillars are similar to the previous Government's.

Rudd however appears focused on reversing the more retiring foreign policy stance of his predecessor, one largely seen as too deferential to the United States and dismissive of the UN. [2]

Among his first actions as Prime Minister was to ratify the Kyoto Protocol on Climate Change, reaffirm his election platform of withdrawing Australian combat troops from Iraq by the middle of 2008 and to mend relations with Pacific nations which had been floundering under Howard.

The question of interest here is whether there will be a policy shift in relation to China.

That of course can't be considered in isolation, affected as it will be by the shifting geo-politics of the Pacific Rim.

The scope of this paper will be limited to some observations of mine and is not meant as an in-depth analysis.

Much Depends on Trade...

In Australia, China is often a prominent topic in politics and the media.

It recently became our biggest trading partner with total two-way trade approaching $US50 billion. [3]

Australia is a significant supplier of iron ore and coal, among other commodities, to China's ravenous industries, at a time of record prices and demand. [4]

More students from China study in Australia than any other group, 70,000 in 2006, and negotiations are underway for a bilateral free trade agreement.

The relationship is strongly grounded in trade but is also mutually respectful at the leaders level (past and present), and with expanding person to person links, especially among business people.

China's growth and increasing significance as a global power is changing what used to be a simple equation: China needed minerals and energy, Australia had plenty and was willing to dig them up and sell them.

Plus as our trade deficit attests, Australians also enjoy cheap imports.

In the longer term, and as China continued to open its markets to international trade, Canberra recognised the importance of being "in on the ground floor" for expanded trade opportunities such as in financial services.

Unsurprisingly, there has for many years been strong support of the 'One China' policy across the political spectrum in Australia and issues of China's human rights record were always discussed in private if at all during diplomatic contacts.

...And Who Your Friends Are

The former Australian government under John Howard was considered by its critics too eager to please the United States, enthusiastically signing on for the "war against terror" which earned Howard the "deputy sheriff" tag in 2003 from which he was forever after trying to rid himself, and following the US into Iraq.

But Howard balanced reasonably skilfully between being seen as America's ally and China's friend.

Kevin Rudd was widely expected to pursue a new perhaps more daring foreign policy, certainly a more independent one.

In a speech in March at the Brookings Institution in Washington, Rudd made clear the alliance with the US remains "the bedrock of Australia's strategic policy". [5]

No surprises there, historically and culturally the two nations are close.

They share a common strategic interest in a stable Asia-Pacific.

In the same Brookings speech, Rudd reflected on the "continued importance of US global leadership", how to engage China and with the US "shape together China's engagement with the global and regional architecture of the future."

Life Gets More Complicated

As part of his first overseas foray as Prime Minister, Kevin Rudd recently spent four days in China during a three week tour which included the United States and Europe (notably not Japan).

Prior to his departure, the media headlines made much of his status as the first western leader to speak Mandarin, suggesting an easy path into the hearts of ordinary Chinese and smooth sailing in his meetings with the leadership in Beijing.

After his first speech delivered in Mandarin to students at Peking University, a new assessment was necessary.

Rudd spoke directly and forcibly (for a politician) about Tibet.

He said: "Some have called for a boycott of the Beijing Olympics because of recent problems in Tibet. As I said in London on Sunday, I do not agree. I believe the Olympics are important for China's continuing engagement with the world. Australia like most other countries recognises China's sovereignty over Tibet. But we also believe it is necessary to recognise there are significant human rights problems in Tibet. The current situation in Tibet is of concern to Australians. We recognise the need for all parties to avoid violence and find a solution through dialogue. As a long-standing friend of China I intend to have a straightforward discussion with China's leaders on this." [6] [7]

Rather than take the usual easy way Rudd sailed right into controversy by raising the issue of Tibet.

He used considerable skill aided by his knowledge of Chinese history and language to say a good friend is open and direct.

As one commentator put it, he set new rules for dealing with China: "...he chose to address the students on the broad basis for a truly sustainable relationship with the economically booming yet politically autocratic state that is China. In doing so, he rewrote the rules of engagement in a way that can only benefit Australia and our relationship with this important country." [8]

The direct talking didn't seem to damage the relationship.

Rudd and Premier Wen Jiabao agreed to resume negotiations toward a bi-lateral free trade agreement.

Talks had barely made any progress in three years, with China openly accused by Australia's negotiating team of stalling.

Discussions would have canvassed other touchy subjects.

China's industrialists are chafing at the high prices of iron ore and coal.

Australian suppliers BHP-Billiton and Rio Tinto are pushing for price rises of around 80 per cent.

For the former in the current round of annual contract negotiations, while the latter, at least coking coal, has trebled in price in one year.

So concerned is China about future resource security and the ever increasing pricing power of exporters, its seeking direct shareholdings in Australian (and other) resource sectors. [9]

Back home in Australia, the PM addressed a public summit he had called to discuss and set priorities for the future.

One of the half dozen sessions dealt with Australia's place in the world.

During his speech he said the challenges Australia faces are "unprecedented in complexity and intensity".

The first of these is climate change, the second: "The rise of China. The rise of India. The great economic and geopolitical transformation of the 21st Century which those two rises represent. Quite apart from the rolling structural vulnerabilities of an increasingly inter-dependant global economic order." [10]

Since the beginning of its opening to the rest of the world 30 years ago, China's focus has been on stability domestically and internationally.

In this context, says Rudd, the single most important element of China's foreign relations is its relationship with the United States.

In forging Australia's foreign policy, he intends to play a role in encouraging China's increasing engagement in the international rules based system.

In the strategic area, Australia is suggesting an extension of the Six-Party Talks mechanism to advance a broader regional security framework to help remove "some of the brittleness that might otherwise characterise security policy relationships across what remains a strategically fragile theatre".

One that puts China more prominently in Canberra's view of a multi-lateral security system in the Asia Pacific region.

Important bilateral relationships with Japan, Indonesia, and increasingly with India will also get their fair share of attention.

Yet it will be most interesting to watch how, at the same time the "creative middle power" Australia forms closer ties with Beijing, future strategic arrangements take shape which work to remove that brittleness.

Karon Snowdon is Radio Australia's Finance Correspondent and spent two weeks in China on a Jefferson Fellowship, sponsored by US research organisation the East-West Center, Hawaii

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