Australia’s Resolution to the China Dilemma – POLITICO

SYDNEY — When Mak Sai Ying sailed into Sydney Harbor in February 1818, he wasted little time settling into Australian life. The first recorded Chinese-born settler to arrive in Australia later anglicized his name to John Shying, married an English woman and eventually turned his hand to running that most Aussie of establishments: a good boozer.

After a long journey from China’s Guangdong province, the soon-to-be publican would have passed Potts Point, a stop of land jutting into Sydney’s famous harbor that today hosts a reminder of how the relationship between China and Australia is changing.

Potts Point is home to the Australian Navy’s Fleet Base East — the main operational base for the navy on the country’s east coast. It was here, in July, that the U.S. Navy commissioned the USS Canberra — the first American warship to be placed into active service in an ally’s territory.

The unusual deployment was part of a geopolitical balancing act being carried out by Australia’s Prime Minister Anthony Albanese. This week, he will be the guest of U.S. President Joe Biden, on an official visit to Washington, as the allies seek to further cement ties following the 2021 announcement of the AUKUS alliance between Australia, the United States and the United Kingdom.

But as Albanese sits down to a lavish dinner with the leader of the free world, his mind may be on another trip. He will fly to Beijing in early November — becoming the first Australian prime minister to visit China since 2016.

Albanese’s dual trips highlight his country’s precarious geopolitical position, as China’s ambitions in the Indo-Pacific — and its saber-rattling toward Taiwan — heighten tensions in the region, and around the globe. Australia, a member of the Five Eyes intelligence alliance and the QUAD partnership, has long been one of Washington’s closest allies. But it has also developed deep, if sometimes rocky, economic ties with Beijing, with exports to China reaching a record $102.5 billion in the first half of 2023.

Having neither the option of indifference nor the luxury of irrelevance, Australia’s solution to its China puzzle has been to hug Beijing close, but to try to do so from a position of strength.

Albanese has spoken of his government’s efforts to “stabilize the relationship” between the two countries. In dealing with China, he said Australia must “cooperate where we can,” but “disagree where we must … always engaging in our national interest.”

So far, the strategy appears to be working.

Velvet glove

The relationship between China and Australia stretches back centuries. Chinese traders reportedly visited the north coast in the 1750s or earlier — well before Captain James Cook arrived to claim the island for Great Britain.

When Mak arrived in Sydney, he kicked off a long history of Chinese migration south. Australia is home to 1.4 million people with Chinese ancestry, comprising 5.5 percent of the total population. Today, Sydney’s Chinatown sits in the heart of the city, in the neighborhood of Haymarket, just south of the Chinese Garden of Friendship, inaugurated in 1988 to celebrate the ties between the two countries. With its entrance flanked by two stone lions, and surrounded by a moat filled with koi fish, the garden looks like a cross between a city oasis and a fortress.

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“We’re one of the few authentic Chinese gardens outside of China,” a cheery guide will tell you, pointing to the fact that the surrounding region of New South Wales is twinned with Guangdong — the province Mak left behind in 1818.

The unusual deployment was part of a geopolitical balancing act being carried out by Australia’s Prime Minister Anthony Albanese | James Elsby/Getty Images

More recently, the most important flow between the two countries has been in goods, mostly raw resources like iron ore, coal and gas moving from Australia to China, and a smaller river of manufactured goods eddying back. In June 2023, China took in a whopping 40 percent of Australia’s exports.

Canberra’s economic dependence on its northern neighbor was brought into sharp focus during the COVID pandemic, after then Prime Minister Scott Morrison angered Beijing by calling for an investigation into the origins of the virus. The result was a trade war, with China slapping tariffs and bans on Australian agricultural products and other commodities.

While the two countries remain at odds on some issues, including an Australian ban on the use of the Chinese tech giant Huawei’s technology in 5G networks, relations have been slowly improving. Beijing still forbids imports of copper and timber, but has returned to purchasing Aussie oil, beef, wheat and barley. A dispute at the World Trade Organization has been halted following China’s decision to review its tariffs on Australian wine.

Albanese’s upcoming visit to China is widely seen as an effort to smooth over the remaining tensions. The signs are positive — earlier this month Beijing released Cheng Lei, a Chinese-born Australian journalist who had been detained in China for over three years.

“We made clear since we were elected that we wanted to stabilize our relationship with China,” Australian Foreign Minister Penny Wong said following the journalist’s release. “I think you’ve seen some of the benefits of engagement.”

Iron fist

If Albanese’s visit to Beijing represents one pillar of Australia’s China solution, the other involves sinking military roots in the north of the country.

Australia plans to move around 4,500 troops to Townsvillein northern Queensland, as part of a major restructuring of the country’s armed forces.

The Australian Defense Force “needs to be able to project power further than it has been able to in the past,” said a spokesperson for Deputy Prime Minister and Defense Minister Richard Marles. The Indo-Pacific region, the spokesperson added, is seeing “the biggest conventional military build-up since the end of the Second World War.”

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As part of the plans, the army’s 3rd Brigade, based in Townsville, will be reformed for amphibious operations alongside the Australian Navy. The 1st Brigade — currently based in Darwin in Australia’s hot, expansive Northern Territory — will become a light combat unit with quick deployment capabilities.

“We’re always preparing for conflict,” said Nick Foxall, the 1st Brigade’s commander. The brigadier said his unit has been transformed from a mechanized brigade to a light littoral brigade fine-tuned for coastal defense within 14 months. “I have not seen this pace of change in my career,” he said.

The changes give Australia’s government “more usable options on the lower end of the escalation scale,” Foxall added.

While Foxall focuses on Australia’s northern coastline, other units will be readying more aggressive options.

Today, Sydney’s Chinatown sits in the heart of the city, in the neighborhood of Haymarket | Lisa Maree Williams/Getty Images

The army’s armored attack units and medium-lift aviation will be based in Townsville. In the south, Adelaide will become a “future-focused” base, consolidating Australia’s long-range strike capabilities. High Mobility Artillery Rocket Systems, or HIMARS, will be based here, along with missile defense systems.

Currently, Australia’s artillery can only strike a target a paltry 40 kilometers away. The defense ministry wants that range to increase to 1,500 kilometers through the purchase of Tomahawk missiles from the U.S. “Our army was very well set up for the previous fight, and not for the future fight,” said Foxall.

The goal doesn’t have to be spelled out: By boosting its ability to strike further away, Australia is hoping to force China to rethink the costs of any military action it might undertake in the Indo-Pacific.

Betting on Washington

Australia’s China strategy has a third pillar too: Enlist a powerful friend.

As part of the AUKUS alliance, Australia will acquire three nuclear-powered submarines by the late 2030s. In late 2022, it was also confirmed that the U.S. will station up to six nuclear-capable B52 bombers at RAAF Tindal, in the Northern Territory. Australia and the U.K. will also deliver newly built nuclear-powered submarines by the early 2040s.

The spokesperson for Marles, the defense minister, described AUKUS as a “whole-of-nation project.” It’s an apt description, as Canberra forecasts it will cost the Australian taxpayer up to 368 billion Australian dollars ($235 billion) by the 2050s.

And yet despite the scale, the cost and the potential to drag the country into any U.S. military confrontation with China, AUKUS enjoys a surprising degree of domestic political backing. The agreement was kickstarted under the previous administration led by Morrison. Albanese’s government happily picked up the baton when it came to power in 2022.

In fact, there are only a few dissenting voices to Australia’s geopolitical trajectory across politics, media and think tanks. One is Sam Roggeveen, a director at the Lowy Institute and author of “The Echidna Strategy,” a book that calls for a rethink of the current foreign and defense policy consensus. He worries about Australia further hitching its military wagon to the U.S.

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“There is a great deal of opportunity cost with regard to the actions we have taken in regard to AUKUS,” said Roggeveen. He said Australia should instead be focusing on closer relations with Indonesia, the Pacific Islands and other nations in the region, rather than relying too much on the U.S. alliance.

“The success of our own policy rises and falls on the question of whether the United States truly is committed to maintaining its leadership position in Asia,” he added. “I think that’s too big a bet.”

Lessons for Europe

If Australia thinks it’s solved the China puzzle, it’s working hard to convince other countries to join its effort.

The government has been on a diplomatic offensive across the Indo-Pacific. Since coming to office in 2022, Albanese has visited 11 countries across the region, landing in India, Indonesia, Fiji and Japan more than once. Wong, the foreign minister, has spearheaded a refreshed foreign policy drive — one that deepens engagement with many nearby Pacific Island nations while forging closer ties with bigger fish like Indonesia.

If Australia thinks it’s solved the China puzzle, it’s working hard to convince other countries to join its effort | David Gray/AFP via Getty Images

The government has one strategic goal in mind: To make it increasingly costly and not worthwhile for countries in the region to fully throw their lot in with Beijing.

More broadly, Australia’s middle-way strategy — to engage China while making clear it won’t be pushed around — could serve as a model for others.

The European Union for instance has long struggled to define a clear-eyed China strategy. Like Australia, the bloc has tried to balance its approach — referring to Beijing as both a “partner for cooperation and negotiation” and a “systemic rival.”

But where Australia has been clear where it stands diplomatically and militarily, in Europe the message has been more of a muddle, leaving cracks in the consensus for Beijing to widen. Approaches to China range from Lithuania’s provocations, such as vocally backing Taiwan, to Germany’s doveishness, driven largely by economic concerns.

Then again, the jury is still out on whether Australia’s balancing act will hold. China has grown more assertive in recent months, especially over Taiwan. And the AUKUS pact has raised tensions in the region.

Albanese will be hoping for a successful visit to the U.S. this week, but it’s his trip to Beijing that will be more closely watched.