Improving Business ties between Beijing and Canberra

Improving Business ties between Beijing and Canberra

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Improving Business ties between Beijing and Canberra

By

Roland Boer

The last five years of China-Australia business relations have not been easy. The reason has been the increasingly aggressive “anti-China” line from Canberra, although this line simply did not make sense to the Australian business community. As Peter Arkell, former chair of the Shanghai-based Australia-China Chamber of Commerce (Austcham), observed in 2021, Australian companies in China have for 50 years “invested money and sweat in the bilateral relationship that has delivered in spades for the Australian economy for decades.” 

The ideological turn in Canberra was like putting on “short-sighted” lenses that were detrimental to Australia’s best interests. By and large, businesses are not interested in ideology and the direction of the political wind in Canberra – unless it interferes with their primary concern: economic engagement and business relations.

That “dark cloud” now seems to be passing. As I write, the tone in the Australian business community is increasingly upbeat. In the wake of bilateral meetings by the two countries’ leaders, as well as meetings between the respective foreign and trade ministers, a steady stream of business leaders have begun making their way to China to re-start stalled projects and develop new ones. 

A good way to gauge this change of tone is to consider the Australia-China Business Council (ACBC), which is the “premier bilateral business organisation in Australia dedicated to the Australia-China economic relationship.” ACBC has more than 700 member organizations, more than 20,000 professional members focused on China, and has branches in every Australian state and territory.

Its regular reports keep making the case for deepening and extending ties with China. Most recently, they have been promoting their “green channel” initiative, hosting well attended events that seek to develop Australia-China collaboration in green energy, electric vehicles, green partnerships for industrial parks, and joint action on climate change.

The news is full of China being “back in business” and of business and university leaders “flocking to China.” The bottom line for ACBC is “collaboration is the key.” In their eyes, China has been for many years Australia’s number-one trading partner and the two economies are highly complementary.

Why has a pragmatic and more balanced approach returned to Australia-China business relations? One reason has to be China’s successful transition from the pandemic in the last few months, but another reason is a change of government in Australia. In May 2022, a Labor government at long last took office in Canberra. There are many constraints and pressures – internal and external – on any government in Australia, and they usually have relatively little room to move. However, I would like to emphasize two points.

First, the Labor Party in Australia has always preferred a more independent foreign policy. In 1971, the Labor leader Gough Whitlam met premier Zhou Enlai, and when Labor formed government in the following year, one of Whitlam’s first moves was to recognize the PRC. Australia’s first ambassador to China, Stephen Fitzgerald, has more recently suggested that the Xi-Albanese meeting in Indonesia’s Bali late in 2022 is a comparable moment.

Over the years since, many in the Labor Party have found it galling that a foreign country – especially the UK and more recently the US – should set the agenda for Australia’s foreign policy. They prefer an approach that is genuinely in Australia’s best interests. Many former leaders and senior government ministers have been vocal about the need for independent and pragmatic relations with Australia’s primary trading partner, China, and with all of Australia’s neighbours. The experience of such people has considerable influence within the Labor Party, so we can say it is in the Labor Party’s “genes” to be more independent and pragmatic in terms of international relations.

Second, from time to time the Australian business community has favored the approach of a Labor government. From an Australian perspective, this is a somewhat strange condition, since the Labor Party is not seen as the “natural” friend of business. However, in the last few months it has become clear that the relatively new Labor government’s more pragmatic and independent approach suits the business community. Simply put, this is good for business.

At a more philosophical level, I suggest we understand these recent developments as follows: business, industry, and trade form what may be called the economic base. At this level, a win-win approach to China-Australia engagement is relatively easy, and indeed preferred by the Australian business community. Business is business, and political “winds” should not get in the way. 

However, when we move to matters of culture, philosophy, politics, and so on – what may be called the superstructure – the situation becomes more complicated. At this level, understanding and appreciating each other’s cultures takes much patience and time. Of course, the situation is always complex and there are many “cross-winds” that can derail the process. But I for one hope that the return to a win-win approach at the economic base will lead over time to a renewed desire for greater cultural and philosophical understanding.