Albanese Must Aim Beyond Bilateral Gains In China

The Australia–China economic relationship, because of its structure and importance to the Chinese steel industry and in energy use, invests special urgency in both countries to address the critical shared challenge of carbon emissions and their impact on climate change.

As both countries seek to achieve their decarbonization objectives and work with other countries towards a sustainable future, they will need to manage a major transformation in their trade and investment relationship to achieve energy transition faster and at a lower cost. This calls for upping dialogue through business, non-official and government channels to help chart the pathway forward.

With their different political systems, traditions and histories, the two countries have their disagreements, and they will disagree in the future, but the six principles upon which the relationship was built still provide the framework to secure deep economic and political cooperation in the future. Australia's appeal to those principles and the global trading rules have helped to overcome the recent bilateral ruptures and lift trade blockages.

The relationship is not only of direct importance to each country; its scale and character are of importance in global and regional economic affairs. Both Australia and China bear a responsibility to conduct their relationship in accordance with their obligations under the multilateral rules-based agreements they have both ratified. That global framework and joint commitment to it is central to getting the bilateral economic relationship right.

There will be no
stabilization of the Australia-China relationship
unless Australia embraces a global strategic path with these objectives and principles as a top priority in its dealings with China and generally.

Albanese began to articulate that strategy when he positioned Australia as a“constructive middle power with global interests” in his final speech in Washington before heading to Beijing.

His observation that it's“the responsibility of every nation that has benefited from the stability and prosperity of the international rules-based order ... to work together and protect it” was an important prelude to the expected summit meeting between President Joe Biden and Xi in San Francisco for APEC, just two weeks after his own visit to Beijing.

Australia was a prominent and active supporter of China's accession to the WTO and, together with China, commits to the principles of non-discrimination and equality, and the framework of mutual benefit and respect for non-interference in each other's internal affairs that underpin the WTO.

The multilateral trading system is a critical foundation for the prosperity and security of the Asia Pacific region and the basis for the two countries' longstanding cooperation in APEC, the G20, the East Asia Summit and broader ASEAN-centred agreements such as the Regional Economic Cooperation Partnership agreement.

China is also seeking to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which requires higher standard trade rules and deeper economic reforms.

That won't be easy, and it will take a long time, but this is the time for Australia to encourage, not discourage, China from that course and work on processes that will make clear the step-by-step progress needed towards it. The challenges of joining CPTPP are many of the same challenges that have to be dealt with in the reform of the Chinese economy and the global trading system.

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Australia and China also share common interests in the economic development and financial stability of the region.

This includes active participation in regional institutions such as the Asian Development Bank and the Asian Infrastructure Investment Bank (of which Australia is a vital and constructive member) and ensuring that global institutions like the IMF and the World Bank are adequate and remain representative of our region.

The Australia-China relationship has been fostered by people-to-people exchanges and abiding friendships over the years. These exchanges are important to its future.

Acknowledging and celebrating them is crucial to the success of the Albanese-Xi meetings in restraining policies and regulations in both countries that unnecessarily restrict openness and confidence in the exchange of people and ideas needed to manage the relationship going forward.

The strength of the education and tourism relationships reinforces these mutual interests. The promotion of business, academic, official, institutional and personal exchanges is critical to the value that both countries have derived from working together on many issues beyond, but central, to the health of the bilateral relationship over the years.

Shiro Armstrong is Director, and Peter Drysdale is Head, of the East Asian Bureau of Economic Research, The Australian National University.

A version of this article was first published
here
in The Australian Financial Review.

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