Australia

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China’s unfair trade measures against Australia have indeed ceased, but its broader strategy of compulsion is unchanged. It is still applying pressure through implicit coercive threats, military intimidation and exploitation of political and economic vulnerabilities.

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Since taking office in 2022, the government of Prime Minister Anthony Albanese has restored diplomatic dialogue with China. In doing so, it has aimed for the goal of ‘stabilisation’ and been guided by the principle of cooperating with China where possible and disagreeing where necessary. Communication between national leaders and their teams is indeed vital, so the repairing of ties has been a clear positive.

But structural asymmetry in the relationship persists. China still pursues its objectives through coercion. The cessation of tariffs on Australian wine and the lifting of import bans on beef and lobster during the government’s first term in office has been welcome, but they distract from Beijing’s strategic use of implied threats to influence Australian decision-making.

In the first two decades or so after the Cold War, European countries mistakenly thought deeper economic ties with Russia would reduce its propensity towards tension and conflict. Globally, most countries made just the same miscalculation in regard to China, thinking that bringing it into the multilateral international system would promote its political liberalisation and stifle any latent aggression. Later they saw that China had begun changing the multilateral system to suit itself—and that its territorial ambitions had become ever more obvious.

Now Australia is obdurately making the same mistake again.

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Because the government isn’t candid, there’s little public understanding of China’s coercive behaviour. Canberra gives the impression that punishment is coercion only when it’s in effect—so, now that Beijing has restored trade rights and ministerial communications, coercion has ended.

Wrong. The threat of future punishment is a potent and ongoing form of coercion. Beijing relies on implicit threats to influence foreign decision-making, and it knows that the tactic works. It punished South Korea in 2017 for accepting deployment of a US THAAD missile-defence battery. Seoul stood its ground. But years later, South Korean law enforcement cited fears of renewal of the 2017 economic sanctions as one justification for punishing a South Korean company for helping Taiwan to build submarines.

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This form of latent coercion is subtle but potent. Australia’s decision to suspend two cases in the World Trade Organization against China just before expected rulings in its favour allowed Beijing to avoid international censure and save face. Australia missed a chance to learn from both Japan and the Philippines, which not only began international cases against China but had the courage to see them through. In doing so they defied China’s pressure and achieved rulings that identified behaviour in breach of international rules.

China itself pursued, and won, a WTO case against Australia on steel. So Australian obsequiousness achieved not reciprocal goodwill but a reputational win for Beijing. Australia also lost an opportunity to reinforce global rules in its WTO case.

Relationships depend on a willingness of all sides to compromise. But why should China compromise with Australia when it can stand its ground and wait for Australia to retreat?

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Beijing’s coercion of Australia has not ended; it has evolved. Pressure through trade measures has been replaced with implied threats, military intimidation and the systematic use of narratives that portray Australia, not China, as the party whose exercise of sovereign decisions puts the future of the relationship at risk. Australia cannot afford to misread this moment. Strategic clarity, not diplomatic comfort, must guide the next phase of Australia’s China policy.

The era of seeing China through the narrow lens of economic opportunity ended long ago. We must not return to it.

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Australian politicians and officials need to show long-term resolve, make the necessary commitments to strengthen national resilience and prioritise the national interest. By doing so, Australia can weather Beijing’s pressure. The short-term costs of occasionally upsetting Beijing and risking some economic pain are small compared with incrementally losing our strategic freedom in a region in which power and influence will be heavily contested for many years to come.