Donald Trump's implacable belligerence has tutored traditional US allies to quickly adjust to new geopolitical realities or truckle to his ceaseless demands. An increased sense of urgency across Europe and the Indo-Pacific implies that they have decided to take up the gauntlet of diversifying their partnerships.
In a rare show of displeasure at US president's stubborn arrogance, Australian Prime Minister Anthony Albanese during his China visit sought to stabilize relations and manage differences to “contribute” to regional peace and prosperity, holding a “constructive” meeting with Chinese President Xi Jinping to underscore Beijing's importance for "our economy, our security and the stability of our region."
Beijing is Canberra’s largest trading partner with almost a third of Australia’s exports destined for China and bilateral trade hitting A$312 billion in 2024. The two economies are highly complementary, meaning China has a huge demand for Australian goods and services. This symbiotic bond, unlike the Australia-US parasitistic trade ties, provides a sound footing to tap the opportunity and strengthen the extensive relationship.
China’s investments contribute to infrastructure development, productivity and job creation in Australia; the East Asian nation’s development, opening-up and rising middle class unleash new vistas for Australian exporters. As members of Asia-Pacific Economic Forum and Regional Comprehensive Economic Partnership, both countries also have shared interests in safeguarding regional stability and prosperity.
In the face of a rising protectionism and unprecedented volatility in global trade due to Trump’s unilateral tariffs, a stable and strengthened Australia-China relationship would ensure the Australian economy to withstand and navigate strenuous trials and continues to make a positive impact on domestic workers, employers and industries.
The strengthening of Beijing-Canberra ties has ushered in a wave of optimism among Australian businesses with 75% of foreign firms in a poll by the Australia-China Chamber of Commerce reporting profitability in 2024. Their enthusiasm – as 70% rate China as one of their top three destinations for investment over the next three years – reinforces Beijing's appeal as a hub of innovation and industrial transformation.
Canberra’s intent to "do more business with China" was reflected in its Trade Minister Don Farrell’s interview in which he refused to budge to US pressure, emphasizing that Chinese trade was nearly 10 times more valuable to Canberra. "We'll make decisions…to engage with China based on our national interests and not on what the Americans may or may not want."
Nonetheless, disparity between Albanese's and the country's defense department's approaches risks derailing Australia's newfound charm offensive against China. For instance, Canberra has been accusing Beijing of spearheading the largest and most ambitious military buildup since the second world war. Its Defense Minister Richard Marles recently echoed such an assertion.
Yet this assessment has long been contested by none other than Australia’s own analysts and former diplomats who believe the Chinese strategy is essentially inward looking, focusing internal stability and external security. Even leading Western investigations reveal the US by far outspends China in defense spending and that Beijing’s military development and record of use of force are relatively restrained.
Conversely, Trump's return is spurring new challenges for the Albanese government. After the Biden administration wanted to get Canberra “off the fence” by locking it for the next 40 years through the AUKUS, Trump's AUKUS-skeptic undersecretary of defense Elbridge Colby is leveraging the trilateral partnership to hard-press Australia into making pre-commitments if a US-China war breaks out on Taiwan.
The Trump administration is also pressurizing Australia to increase defense spending to 3.5% of the GDP. Canberra has hitherto resisted the US pressure for it would cost Australia tens of billions of dollars. For an economy that will remain in a structural deficit through 2034-35, a defense splurge would indeed imperil Albanese' social policy agenda.
Trade with China has helped Australia to put the cost of living on a downward trajectory. Studies show that this trade relationship has increased disposable income of Australian households by an average of A$2,600, supporting around 600,000 jobs. While US maintains 10% baseline tariff on Australian goods, 25% on automobiles and 50% on steel and aluminum – Beijing thanks to the China-Australia Free Trade Agreement applies an average of just 1.1%, urging Canberra to rethink before jumping on Washington's bandwagon vis-à-vis Beijing.
No wonder, China is seen as a more reliable trade partner than the US by Australians with a sizable majority of them (71%) agreeing the country’s relationship with Beijing is important. This comes as Trump has upended the long-held assumption that America could be a dependable ally, stoking a belief in many Aussies whether it could even act responsibly.
Establishing diplomatic relations, Beijing and Canberra in 1972 agreed to develop the relationship on the basis of the principles of mutual respect for sovereignty, mutual non-aggression, non-interference in internal affairs, equality and mutual benefit and peaceful coexistence.
These fundamental tenets laid the foundation of a robust Beijing-Canberra relationship as people across the two countries lived together peacefully through decades. Should Australia chuck out its schizophrenic ambivalence, both nations can still pioneer the way for a resilient strategic partnership and a secure and thriving Indo-Pacific.
*My article that first appeared in the "Express Tribune"