China and Australia face difficult diplomatic path after trade dispute

China and Australia face difficult diplomatic path after trade dispute

China's likely lifting of final major tariffs on Australian goods in coming weeks will end bitter three-year trade war. That alone is unlikely to usher in a new era in relations between the two countries.

Chinese Foreign Minister Wang Yi's first trip to Australia in seven years to meet his counterpart Penny Wong in Canberra on Wednesday It is the latest sign of a tentative improvement in relations. During his trip, Wang will attend the Australia-China Strategic and Foreign Dialogue, which was postponed for years during a diplomatic freeze.

At the beginning of her meeting with Wang on Wednesday, Australian Foreign Minister Wong said thate it was important that communication “never be withheld as a punishment or offered as a reward.”

As you know, dialogue allows us to manage our differences; We both know it doesn't eliminate them. “Australia will always be Australia and China will always be China,” she said.

Wang's visit comes just over a week after China announced it was considering scrapping trade tariffs of up to 218% on Australian wine, removing the last major penalty imposed after relations frayed in 2020. But even as economic disputes subside, some experts warn that the relationship still faces headwinds due to lingering political differences and increased competition between China and Australia's main ally, the United States.

They have tried to take the very obvious and direct economic disputes off the table“But that doesn't mean the two sides have kissed and made an arrangement in some fundamental sense,” said Richard McGregor, senior East Asia researcher at the Lowy Institute think tank.

Australia and China have rapidly improved their diplomatic relations since the election of the center-left Labor government in May 2022, including the restoration of high-level official meetings and the lifting of trade sanctions imposed by Beijing at the height of tensions.

In October, China released Australian journalist Cheng Lei after detaining her for three yearsfollowed shortly after by a visit to Beijing by Prime Minister Anthony Albanese, the first by a sitting Australian leader in seven years.

However, a Beijing court's decision to give Australian writer Yang Hengjun a suspended death sentence in February took the Canberra government by surprise, casting fresh doubt on the relationship.

Since then, the list of disputes between Beijing and Canberra has not narrowed. Amid rising tensions in the South China Sea, where the Chinese government claims vast swaths of territory, Australia signed a maritime security memorandum of understanding with the Philippines. President Ferdinand Marcos Jr gave a defiant speech to the Australian parliament, where he said he would not give up “not one square inch” of territory.

After Australia and Vietnam deepened ties by agreeing to a comprehensive strategic partnership, Chinese Foreign Ministry spokesperson Wang Wenbin warned against building “exclusive circles.” Australia's ambassador to Vietnam, Andrew Goledzinowski, made a rare public rebuttal, saying on his official social media account that China was overreacting.

“Vietnam has always valued self-sufficiency. If strengthening ties with Australia contributes to that, why should another country oppose it? he said.

Some experts urge Australia and China to continue focusing on improving relations. Former Australian diplomat Jocelyn Chey said that despite political differences, the two countries' economies were “deeply complementary”.

Certainly, on Australia's part, we really can't do without Chin“said Chey, now a visiting professor at the University of Sydney. “Trust has to be rebuilt and the only way to rebuild it is to work together.”

But McGregor warned there were many “geopolitical trapdoors” both sides could fall into in the coming years. While China and Australia had agreed to put aside their differences for the moment and focus on what they could agree on, he said, the shared agenda going forward “remains quite limited.”

“The big question is how China behaves and whether it can develop a modus vivendi with the United States,” McGregor said.