China’s deputy ambassador to Australia, Wang Xining, delivered an ambiguous speech about Australia–China relations to the National Press Club last week. While Wang made positive comments about the relationship, describing it as “longstanding and weight-carrying”, he also expressed Beijing’s dissatisfaction with Canberra’s proposed inquiry into the origins of COVID-19, which he says unfairly “singled out” China and was announced without any prior consultation with the Chinese government. While Wang was overly melodramatic at times, describing the betrayal felt by Chinese people in Shakespearian terms, he avoided the antagonistic rhetoric used by some Chinese diplomats and media outlets. It seemed to offer the opportunity for a de-escalation of recent tensions between the two countries. 

But in the days following Wang’s speech, the downward spiral in the relationship continued. The very next day, seemingly in response to the speech, the federal government introduced a bill that would allow it to veto agreements with China (and other foreign governments) made by state governments and universities. It has also initiated a parliamentary inquiry into foreign interference in universities. Meanwhile, China has stepped up its curbs on Australian farm exports. And on Monday, the Australian government confirmed that Australian journalist Cheng Lei had been detained in China in the two weeks prior to Wang’s speech.

The unnervingly fast deterioration of Australia–China relations highlights the need to find an eventual channel for the two countries to quietly resolve their differences. This will be challenging, given the decline in personal contact between representatives of the two governments. 

It would help if Canberra were clearer about how and why it reaches certain policy decisions relating to Beijing. Its previous stances on cybersecurity and the Chinese telecommunications company Huawei, for example, were made after lengthy and technical intelligence agency assessments.

Unfortunately, the federal government’s new foreign relations bill appears to reflect its long-running discontent with universities and political battles with Labor state governments as much as it does genuine concern about foreign interference. This is not the way to reduce tensions with China. It also does nothing to persuade neighbouring countries to work with Australia to manage China’s rising regional influence. 

Indeed, the agreements reached between other countries and Australian universities and state governments, which are currently in Canberra’s firing line, could be beneficial. As power is devolved to the provincial level in countries such as Indonesia and India, subnational agreements have a role to play in building the people-to-people links between nations that can help Canberra ride out periodic diplomatic rows.

Abe era ends

On Friday, Japan’s longest-serving prime minister, Shinzō Abe, resigned due to health issues. During his almost eight-year-long second stint in office, Abe became a pillar of regional diplomatic stability, just as Australia was experiencing unstable leadership at home. Five Australian prime ministers had relationships of varying degrees of closeness with him during this time. 

Security ties between the two countries were deepened through initiatives such as the recent plan for a reciprocal access agreement for their militaries and through their cooperation as members of the Quadrilateral Security Dialogue, along with the United States and India. Commercial relations were also strengthened, particularly as Japanese investment in Australia offset declining Chinese investment. Both of these developments reinforced Japan’s status as Australia’s closest ally in the Asia-Pacific. 

But history suggests Australia should now prepare for a return to higher prime ministerial turnover in Japan, as Abe did not groom an obvious successor. This may make Japan a less reliable partner. 

This uncertainty, and the fact that the ambitious Abenomics reform agenda is unfinished, means that Australia will need to think more about some longer-term challenges facing Japan, including the implications of its declining population and its persistently poor relations with South Korea. 

Pacific worker delay

Two years ago, Australia introduced a scheme that granted short-term visas to Pacific islanders, allowing them to work in regional areas of the country. The government suspended the scheme due to COVID-19, but announced plans two weeks ago to reintroduce it, in a move to address labour shortages, mostly in the horticulture sector. However, the government is facing unexpected resistance from Vanuatu, which has concerns about the coronavirus being brought home from Australia.

The short-term visa scheme is an increasingly vital part of Australia’s development policy for the Pacific, because it can inject revenue into the region with no cost to the aid budget.

Guest workers’ remittances to their families are important for economic growth in low-income countries and were forecast to overtake both foreign direct investment and aid as their largest source of external financing in the past year. After a decline in remittances early in the pandemic, new research by the Development Policy Centre shows remittances to some Pacific countries are now in recovery.

The increase in the flow of remittances and the reintroduction of the short-term visa scheme would be welcome developments for the region as it endures the pandemic, but Canberra will first need to reassure Vanuatu that it can manage quarantine matters better than some state governments have.