13 Feb 2019
The Australian economy has had 27 years of recession-free growth, making it one of the most successful in the world, in no small way thanks to the expansion of its trading relationship with China. Former Australian Prime Minister John Howard oversaw 11 years of that relationship between 1996 and 2007, and late last year was back in Beijing to ensure this stays on track — despite a worsening series of diplomatic disputes.

Navigating differences

Speaking to Global-is-Asian, Mr Howard said one of the secrets to getting on with China as a one-party state, was agreeing to disagree where there is no common ground.

"It's often a mistake to just pretend the differences don't exist,” he said.

"China is an authoritarian country, while Australia is a very open democracy. We've got to accept on both sides that they are the realities.

“The Chinese often get irritated by what is in our media and I say to them 'well that's not gonna change’.”

Mr Howard said public criticisms in the Australian media of China went both ways.

“If you think [Australia’s] media is critical of China on occasion you ought to see what they write about Australia's leaders on occasion.”

The Australia-China relationship took a turn for the worse in 2018 when Australia’s former Prime Minister Malcolm Turnbull beefed up foreign interference laws, a move seen in Beijing as targeting China. New Australian PM Scott Morrison, who replaced Mr Turnbull after infighting in the ruling party, appointed Mr Howard to lead the annual high-level dialogue with China — where retired officials, academics and business figures from both countries discuss the relationship in a more frank forum than government talks.

In August 2018 Australia banned Chinese communications technology firm Huawei from participating in its 5G mobile network build over national security concerns.

The forum occurred immediately after the Canadian arrest of senior Chinese technology executive Meng Wanzhou, chief financial officer at Huawei, on charges brought in the United States. More recently China has detained an Australian writer on suspicion of endangering its national security.

Lee Kuan Yew School of Public Policy Assistant Professor Lu Xi points out that the meeting came at a very sensitive time. “The China and Australia relationship is highly dependent on what will happen in the China and US relationship,” he explains. Professor Lu believes that if the China/US relationship improves, then the dynamic between China and Australia will naturally get better.

But Australia's government has also changed its views on China, complicating matters. Says Lu, “the Australian government is trying to separate the standpoint of the economic relationship and the national safety,” a separation that will be “very difficult” for them to achieve.

"I made this very clear at the dialogue that we have differences, because we are fundamentally different political and cultural societies. And we have starkly different histories,” Mr Howard said on his return to Australia from the meeting.

"But circumstances have brought us together and it's, overall, been a very fruitful relationship."

Mr Howard said open democracies should not step back from their beliefs for the sake of moving the relationship forward but should focus on mutual interests.

"We should never retreat from our beliefs but if we want a productive relationship with China we should really focus on... where our interests coincide and where we have things in common,” he said.

"It's part of our democracy and not going to change. And China has obviously become in some respects even more of a one-party state in the past few years. But that's their decision and we have to work around our differences."

China as trade partner

Mr Howard recalled that trade with China was instrumental in staving off recession in Australia during the global financial crisis in 2008, allowing the country to retain its enviable growth record.

"China is our best export destination, two-way trade is enormous, and being able to sell a lot to China helped us through the global financial crisis. It was very, very material in preventing the crisis having a big impact on Australia,” he said.

Australia trading partners

Australia's Trade in Goods and Services, FY 2017-18. Source: Australia Department of Foreign Affairs and Trade (1USD=1.39AUD)

"I think we have a good relationship with China. We've had differences but I think it's in better shape than some of the pessimists suggest.”

China State Councillor Yang Jiechi, who met with Howard, agreed saying, "As long as the two sides adhere to mutual respect, equality and mutual benefit, they can push bilateral ties to maintain a stable development."

But the relationship continues to be tested. It’s reported that the arrest of Meng Wanzhou has cast a cloud over the dialogue session. And more recently, Australia’s defence minister Christopher Pyne announced in a speech in Singapore, Australia’s commitment to freedom of navigation exercises in the South China Sea.

Bucking the Asian trend

While intellectuals like Kishore Mahbubani and Parag Khanna extol the Asian Century and insist The Future is Asian, Mr Howard steers clear of generalisations.

He said middle powers like Australia should focus on country-to-country relations and not get hung up on “overdone” concepts about regions, especially one as diverse as Asia.

"Asia is not a homogenous identity - Indonesia, Japan, China, and India - they're all vastly different countries. The geographic region known as Asia has been home to this phenomenal economic growth and development and that's a good thing.
"What I think we overdo in our geo-strategic analysis are the attempts to put collective descriptions on growth and development in a whole lot of individual countries.
"We have a very positive and beneficial and rewarding trade and economic relationship with a variety of countries in Asia.

Australia's foreign policy goals include mentions of an “open, inclusive and prosperous Indo–Pacific region” as well as “a more resilient Pacific and Timor–Leste” and it's clear they see a strong relationship with the United States as key to achieving that, even while they recognise China’s greater capacity to contribute to regional security. Pragmatically, Australia sees good relations with as many countries as possible and adherence to rules as being in their best interest. Although different administrations may emphasise Asia more than others, Howard certainly doesn't want to get bogged down in any geographical limits.

Professor Lu sees a larger scenario. “Later on, I think Australia must make a choice between the US and China. We hope that these two big giants can get along with each other very quickly...then Australia will have a better situation then right now.”