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Australia's Relations with China: What's the Problem?
Dr Stephen Sherlock
Foreign Affairs, Defence and Trade Group
Major Issues
Preface - Implications of the Death of Deng Xiaoping
Introduction
Australia-China Relations in Retrospect
1996: A Year of Friction
The Taiwan Issue: One China or Two?
The Abolition of DIFF: Against 'Accepted Practice'
US-Australia Defence Links: The 'Claws of a Crab'?
The Visit of the Dalai Lama
The View from Beijing
Australia's Challenge: Dealing with an Emerging Great
Power
Conclusion
Endnotes
Australia's relations with China are amongst our most important foreign
policy issues. China is maintaining rapid economic growth even while entering
a period of political uncertainty. Economic growth is making the country
a key trading and investment partner for Australia and its success is
increasing Beijing confidence in asserting its position in regional and
global affairs. At the same time, however, the decline of Maoist ideology,
the growth of regional and social inequality and the decline of the Communist
Party's control over people's daily life is throwing the legitimacy of
the Party into question. The death of Deng Xiaoping will exacerbate divisions
within the Party and might see a difficult period of succession. A more
aggressive Chinese foreign policy could develop if a disruptive succession
led to the emergence of a weak leadership appealing to virulent nationalism
to shore up its position, especially in order to win the support of the
armed forces.
The Australia-China relationship has traditionally been dominated by
global geopolitical and strategic concerns, but since the 1980s the two
countries have built up a range of common bilateral and regional interests,
including strong economic ties. Nevertheless, as a growing world power,
China still views individual bilateral relations in the context of wider
global issues. In particular, Australia's alliance with the US means that
Australia's relations with China are directly linked to health of the
US-China relationship.
The relationship deteriorated severely during 1996 and Australia's policies
on China and the US were subjected to unusual and strident public criticism
by the Chinese Government. Using the metaphors beloved of Chinese commentary,
a Chinese publication compared Australia to a bat which gave its allegiance
to the mammals when they triumphed, but showed its wings and declared
itself a bird when the birds were victorious - in other words Australia
was torn between its connections with Asia and its traditional allegiances.
The tensions were reduced by the end of the year, but the issues at stake
were an indication of the underlying sensitivities in Australia-China
relations which will continue to be a challenge for Australia in the future.
A number of actions by the new Australian Government, elected in March
1996, led China to believe that Australia was changing its China policy
to one which was more pro-US and less friendly to China. Australia's support
for the US dispatch of naval forces into the Taiwan Straits in response
to Chinese missile tests during the Taiwanese elections was strongly criticised
by China. China began to react with increased sensitivity to any official
Australian dealings with the Taipei government. The Australian Government's
abolition of the Development Import Finance Facility (DIFF) aid scheme
was attacked by China as being 'against accepted practice' and may have
been seen as supporting US efforts to reduce China's access to concessional
development finance. The increased emphasis on the US-Australia alliance
by the Howard government was criticised in the Chinese press as part of
US anti-China strategy and as a move away from Australia's previous engagement
with Asia. The visit of the Dalai Lama to Australia was also attacked
as hostile to China.
Chinese perceptions of how it is regarded in international affairs are
still strongly influenced by suspicions that the US harbours a desire
to prevent China from taking its place amongst the major players on the
world stage. These feelings came to a head during a number of disputes
between China and the US from 1993 onwards, including trade issues and
China's membership of the World Trade Organisation, human rights, nuclear
weapons proliferation and US relations with Taiwan, especially the 1995
visit of the Taiwanese President to the US.
Given the key role of the US alliance in Australia's foreign policy,
China often interprets Australian actions in the context of US policy
objectives. Australia is appreciated for the occasions in the recent and
more distant past when it has acted independently of the US, but China
remains very sensitive to perceived changes in Australia's policies which
suggest a return to policies of the past. Along with managing a growing
Australia-China bilateral relationship, a key challenge for Australian
policymakers will be to balance the demands of the Chinese connection
while maintaining close ties with the US. The ambiguous status of the
US and Australian relationship with Taiwan will be a continuing issue
and the reunification of Hong Kong with China in July 1997 has potential
for political and economic problems.
China is an emerging great power which has not yet been fully integrated
into the established norms and institutions of international relations.
Suspicious of US attitudes, China regards any pressure over political
and economic reform or over issues such as Taiwan, Hong Kong or Tibet
as incursions into Chinese sovereignty. The problems which plagued Australia-China
relations during 1996 were an indication of the sensitive nature of the
relationship. In particular, Australia's relations with China will be
strongly influenced by the course of US-China relations during the second
Clinton administration.
This paper was completed just before the announcement of the death of
China's 'paramount leader' Deng Xiaoping on 19 February 1997. As Deng
became increasingly old and fragile in the years before his death, international
commentators devoted much discussion to the political implications of
the succession from Deng's leadership. The paper includes a discussion
of the growing political uncertainty in China with the decline of the
Communist Party's Maoist legitimacy and the Party's loss of direct control
over the economy and over people's daily lives, together with problems
developing with social and regional disparities and the suppressed popular
desire for democratisation. The death of Deng Xiaoping is discussed as
a factor which will contribute to this uncertainty, but the paper argues
from the position that his death is unlikely to have an immediate impact
on events.
Had Deng's death occurred before the policies of economic openness and
liberalisation which he championed from the late 1970s were fully established,
elements in the Party still influenced by Maoist economic ideas might
have been encouraged to attempt to regain ascendancy. Equally, had he
died before his designated successor, Jiang Zemin, had consolidated his
position, Deng's departure from the scene would have been more destabilising.
From information currently available, it seems unlikely that Jiang's authority
will be challenged in the immediate future and even less likely that there
would be any serious discussion of returning to the economic policies
of the past.
On the issue of economic policy, Jiang has recently been associated
with a 'neo-conservative' approach designed to dampen the effects of popular
resentment about corruption, crime, unemployment and the continuing underdevelopment
of interior regions. These negative aspects of the growth of recent years
have come to be identified with the freewheeling economic policies of
'Dengism', but it is significant that while attempting to tackle such
problems, Jiang's leadership has never suggested that there would be any
reversal of the fundamentals of Deng's economic strategy. Rather there
has been an effort (largely successful) to bring the economy to a 'soft
landing' after a period of overheating and the resultant high inflation
which eroded many people's incomes. Beijing has also attempted to direct
a portion of new investment into the interior to facilitate more even
development.
As far as the leadership is concerned, there seems little doubt that
Jiang Zemin is in firm control and has strengthened his position in recent
years. Jiang has sponsored a range of proteges into influential posts
in the Party, government and military and has established himself 'at
the core' of a collective leadership. This allows him to act as a broker
in the event of conflicting views between the conservative and moderates
in the Party. Jiang has also made efforts to build up a body of thought
in the tradition of 'Mao Zedong Thought' and 'Deng Xiaoping Thought'.
Focusing on the need to reaffirm cultural and family values as well as
the drive for prosperity, Jiang's ideas are designed not only to heighten
his own stature but to reinforce the idea of the Party as a moral and
political leader of the Chinese people. Jiang's efforts to reinforce his
political and ideological position is important in the lead-up to the
15th Party conference to be held in October 1997 where he will wish to
cement and formalise his dominant role. Jiang's main weakness is that
he does not have the military background which could reinforce his support
within the politically powerful People's Liberation Army. On the other
hand, any other likely contenders for power, principally Prime Minister
Li Peng, have the same disadvantage. Li Peng also suffers from his strong
popular identification with the suppression of the pro-democracy demonstrations
in June 1989.
It should be stressed that even if factional divisions were to emerge
in coming months or years, the terms of debate would not be about the
basics of economic philosophy such as those which marked the transition
from Mao's rule to that of Deng Xiaoping. The great legacy of Deng's incumbency
is the hegemony of an economic strategy based on opening China to the
world market and greatly reducing the role of bureaucratic planning and
direction in the allocation of resources for investment. The paradox which
Deng also bestowed on his successors, however, is that while expanding
wealth has provided new strength for the regime after the chaos of the
Mao years, social change and social problems accompanying this growth
have shown their potential to undermine support for the Party. Jiang's
Zemin's efforts to restore the Party's legitimacy and ideological leadership
are unlikely to see it return to the position it held during the post-revolutionary
years. With social discontent in the cities and growing dissatisfaction
in the interior, particularly amongst ethnic minorities in Tibet and Xinjiang,
the Party may have to rely increasingly on the Army to assert its control.
Relations with China are one of the most important aspects of Australia's
foreign policy. As an emerging great power in our region with whom Australia
is developing a major economic relationship, good relations with China
will become an increasingly prominent feature of Australia's international
interests. But maintaining good relations with China is also one of the
most difficult challenges for Australian policymakers. The recurring friction
in Australia-China relations which marked much of 1996 was a sign of the
sensitive nature of dealing with China and a good indicator of the range
of issues which can arise in managing the relationship.
Problems began to emerge in 1996 when China criticised Australia's policy
on China and Taiwan which it perceived was becoming too closely tied with
US policy and which it interpreted as throwing doubts on Australia's commitment
to a one-China policy. This perception grew out of the new Australian
Government's quick expressions of support for US actions in response to
China's military exercises in the Taiwan Straits during the March 1996
Taiwanese presidential election, as well as the upgrading of Australia's
defence ties with the US in July 1996. China also criticised the visit
to Taiwan by the Primary Industries Minister, Mr Anderson, and the discussion
about the possibility of Australia selling uranium to Taiwan. Adding to
the ill-feeling was the decision by the Australian Government, in April
1996, to cut part of Australia's aid program to China. The Chinese Government
also condemned the action by the Prime Minister, Mr John Howard, in meeting
the Dalai Lama during the latter's visit to Australia.
Concerned to prevent any further deterioration in relations, Mr Howard
moved, in November 1996, to reassure the Chinese Government that Australia
had not altered its China policy following the election of a Coalition
Government. He took the opportunity of the APEC summit in Manila to meet
with the Chinese President, Ziang Zemin, to discuss the issues which had
placed a cloud over the relationship between the two countries. The meeting
was reportedly very successful and the Chinese Foreign Ministry issued
a statement saying:
The Chinese Government attaches importance to the statements of the Australian
Coalition Government on placing emphasis on Sino-Australian relations,
adhering to a one-China policy [and] being against containment...We would
like to develop a long, stable relationship with Australia on the basis
of mutual respect, non-interference in each other's internal affairs,
and seeking common ground while reserving our differences.(1)
Ziang Zemin also invited Mr Howard to pay an official visit to China
some time during the first half of 1997.
Following the meeting with the Chinese President, some observers suggested
that the problems affecting Sino-Australian relations had been overcome.
Certainly, the meeting between the two leaders, together with other contacts
at ministerial and official level during the final months of 1996, helped
reduce misunderstandings which had developed in Beijing about the direction
of Australian policy.
The whole affair, however, underscored the inherently touchy nature
of the relationship with China. Despite the apparent passing of tensions,
Australia's relations with China will continue to have potential for friction
for many years into the future. This paper outlines the recent problems
in Sino-Australian relations and the light they shed on the challenges
which confront Australian policymakers. It provides a background against
which to understand the development of Australia-China relations and discusses
the nature of sensitivities in the relationship in the context of China's
relations with the United States and the country's recent economic growth
and political problems.
Australia's relations with China and Chinese at a non-government level
have been controversial for most of Australia's European history. Anti-Chinese
feeling, occasionally erupting into violence, was a feature of Australian
goldfields from the 1850s and a desire to prevent Chinese immigration
was one of the first motivations for the White Australia policy instituted
after Federation in 1901. At an official level, Australia-China relations
were, from their foundation during WWII until recently, dominated by the
concerns of wider strategic relationships. In 1941, China under the Nationalist
government of Chiang Kai-shek became one of the first countries with which
Australia established independent diplomatic relations. This relationship
was established in the context of China's struggle against Japan rather
than because of any significant commercial or political links between
the two countries. When the remnants of the Nationalist government fled
to Taiwan in 1949 after the revolution led by the Chinese Communist Party,
the politics of the Cold War led the Menzies Coalition Government to refuse
recognition to the newly established People's Republic of China (PRC).
It was not until 1966, however, that Prime Minister Harold Holt sent an
ambassador to Taiwan to seal Australia's recognition of the Chiang Kai-shek
regime as the sole legitimate government of China. By that time the question
of the recognition of China had become a major political controversy in
Australia and became linked to the issue of the Vietnam War and perceptions
of China as a threat to Australia's security and sponsor of communist
subversion throughout Southeast Asia. Despite hostile political relations,
Australia nevertheless continued to trade with mainland China, especially
with major sales of wheat.
The situation changed dramatically at the beginning of the 1970s with
the change of government in Australia and changes in US policies on China.
In 1971 Mr Gough Whitlam, then leader of the Labor opposition, visited
China just before it was announced that the US Secretary of State, Henry
Kissinger, had had secret talks in Beijing in July as the precursor for
a visit to China by President Richard Nixon the following year. One of
the first acts of the newly-elected Labor Government in 1972 was to recognise
the PRC as the sole government of China. This laid the foundations for
rapid growth of diplomatic, cultural and economic links between Australia
and China under both the Whitlam and Fraser Governments. These developments
were facilitated by China's efforts to strengthen its ties with the West
as a whole, firstly to find allies against the Soviet Union and, following
policy changes in 1978, to boost China's economic growth by opening up
to the world economy.
From the early 1980s Australia's dealings with China began to move away
from a preoccupation with global strategic issues and to concentrate on
regional issues and bilateral economic links.(2) Australia's objective
of broadening its connections with China meshed with China's new foreign
policy, enunciated in 1982, which gave greater weight to economic relationships.(3)
Under the Hawke Government China developed into a major trading partner
for Australia and development assistance, technical cooperation and
industrial investment was expanded. In political terms, the 'special relationship'
which Prime Minister Hawke considered had developed between Australia
and China came to an abrupt end, however, with the violent suppression
of the pro-democracy movement in Beijing in June 1989. Concerns about
human rights abuses in China ensured that diplomatic relations between
Australia and China were frosty for over a year, including a ban on ministerial
visits until early 1990. Nevertheless, the importance of the commercial
links which had grown up between Australia and China in the preceding
decade meant that there was little possibility of relations returning
to the kind of enmity and suspicion which had characterised the pre-1972
period. Trade and investment between the two countries were unaffected,
and the Australian Government emphasised that Australia 'remain[ed] committed
to a long-term cooperative relationship with China'.(4) By 1991 all restrictions
on official interchange, except in the defence field, had been lifted.
The focus of the Keating Government on deepening links with the countries
of Asia meant that particular attention was given to the relationship
with China. At the same time the government was sensitive to continuing
domestic and international concerns about China's human rights record
and emphasised that relations were maintained with a 'realistic, business-like
approach' rather than with the ideas of a 'special relationship' which
had marked the pre-1989 period. Prime Minister Keating conducted a successful
visit to China in June 1993, with an emphasis on trade and investment.
Following the election of the Howard Government in March 1996, Australia-China
relations encountered serious problems as the Chinese Government began
to react to what it saw as change in the direction of Australian policy
on China. China had expressed concerned about Australia's increasing contacts
with Taiwan during 1995, but the problems reached a new level in 1996.
The Chinese perception was fuelled by a number of actions by the Australian
Government which Beijing interpreted as together forming a shift away
from a previously supportive stance on China towards a position more closely
tied with US interests and less friendly to China. The issues over which
the misunderstandings developed were an indication of the sensitive nature
of the Australia-China relationship and the degree to which the relationship
is directly linked to the health of China's relations with the United
States.
The Taiwan Issue: One China or Two?
In March 1996 Taiwan held its first fully democratic presidential election.
The Chinese Government, in an effort to reassert its continuing claim
to sovereignty over Taiwan and to influence Taiwanese electors not to
vote for pro-independence candidates, began a demonstrative series of
missile tests in the Taiwan Straits. In response, the US Government moved
two aircraft carrier groups into the area to monitor the tests and to
affirm its interest in the security of Taiwan. One of the first foreign
policy actions by the new Coalition Government after its election in March
1996 was to call in the Chinese Ambassador to express its concern about
the mounting tensions between China and Taiwan. The new Minister for Foreign
Affairs, Mr Alexander Downer, also welcomed the US decision to move warships
into the Straits as a sign of US commitment to the security of the East
Asian region, as 'demonstrating [US] interest in participating in regional
security issues in a very practical way'.(5)
Mr Downer's statement represented the strongest support of US actions
by any government in the region. Chinese Government representatives did
not make any particular public response to the position of the government,
but subsequent events suggest that they took note of Australia's quick
support for the US and began to look for further signs that policy in
Canberra was changing with the new government, in particular that Australia
was moving away from its 'one China' policy. China began to register great
sensitivity to Australian dealings with the government in Taipei. In July,
the Mayors of Beijing and Shenzhen declined to attend an Asian cities'
conference held in Brisbane in protest against the attendance of the Mayor
of Taipei, Mr Chen Shui-bian, a leading figure in the pro-independence
Democratic Progressive Party. Mr Downer had issued a statement saying
that the federal government had no objection to a visit by Mr Chen.(6)
In August, reports (confirmed by Mr Downer) that the Australian Government
had authorised negotiations for the sale of uranium to Taiwan drew a strongly
negative response from Chinese Government representatives.(7) In September
the Chinese Government criticised the visit of the Minister for Primary
Industries, Mr John Anderson, to Taiwan with a business delegation, although
similar visits had been made by ministers of the previous Labor government.
The Abolition of DIFF: Against 'Accepted Practice'
The next event which marred Australia-China relations was the decision,
in April 1996, to abolish the Development Import Finance Facility (DIFF),
a concessional finance scheme for developing countries. Funded as part
of Australia's overseas aid program, the scheme had been controversial
for some time and the government decided to abolish it as part of efforts
to reduce budget expenditure.(8) Whatever the government's motivations,
the Chinese Government reacted with dismay saying it had not been forewarned
about the decision and that a number of Chinese agencies had put time
and money into investigating the feasibility of several DIFF proposals.
The Chinese Ambassador said the move would:
...not only cause financial loss on the Chinese side, but also do no good
to the Australian side in terms of its credibility and business interests
in China...We hope that the Australian Government will follow internationally
accepted practices and continue to support the projects in the pipeline...(9)
The fact that the Chinese Government particularly objected to what it
considered to be the peremptory nature of Australia's action was reiterated
by a Chinese Ministry of Foreign Trade and Economic Cooperation official,
Mr Wang Che, who told an Australian radio journalist that:
All these projects have been committed by the two governments. If they
are not to be carried out, then it won't be in line with international
practices.(10)
Thus the Chinese Government was concerned about loss of Australian economic
assistance and considered that the manner in which the decision was carried
out was a breach of international convention. But it has also been suggested
that the Chinese were particularly concerned that the cancellation of
DIFF funding was part of a wider campaign by Western countries to restrict
the flow of development assistance to China.(11) Australia's move came
at a time when other countries were reducing their concessional finance
to China and US representatives in the World Bank and the Asian Development
Bank were pressuring those institutions to rule China as ineligible for
soft loans on the grounds of its growing economic strength. Australia's
cancellation of projects in China financed through soft loans may have
strengthened fears in Beijing that Australian foreign policy was taking
on a new pro-US and anti-China character.
US-Australia Defence Links: The 'Claws of a Crab'?
Chinese concerns about Australian policy reached new heights following
the annual Australia-US defence talks (AUSMIN) in July 1996. Part of the
foreign policy agenda of the new Coalition Government was to re-emphasise
Australia's security relationship with the US. At the AUSMIN talks the
two countries signed a new security declaration and agreed to expand the
range of joint exercises, including regular participation by US personnel
on Australian soil. Chinese reaction to the development came quickly and
stridently, in the form of a commentary in the official People's Daily.
The paper noted that the US Secretary of Defence, William Perry, had described
Japan and Australia as the northern and southern anchors of US security
arrangements in Asia and concluded:
From this we can see that the United States is really thinking about using
these two 'anchors' as the craws of a crab...The recent moves by the US
in Australia show that the Cold War thought process has not changed much
in the minds of some people, who still hope to play the role of the global
policeman.(12)
Making it clear that Beijing saw the developments in US-Australia relations
as part of a policy shift by Australia, the People's Daily commented:
Whereas the previous Labor Government paid more attention to building
bilateral security relations, the new government has repeatedly emphasised
the importance of its traditional allies.(13)
The author of the People's Daily commentary did reassure the
Australian press that the main target of his criticism was the US, but
said he feared Australia was 'being used by the United States' for Washington's
strategic objectives.(14) Beijing gained what it considered to be confirmation
of its fears when the Minister for Defence, Mr Ian McLachlan, made a statement
in August arguing that China was a source of for the regional strategic
environment.(15) Chinese criticism was broadened into a general critique
of Australia's foreign policy in an article in World Affairs, a
publication of the Ministry of Foreign Affairs. Using the metaphors beloved
of Chinese commentary, the article compared Australia to a bat which gave
its allegiance to the mammals when they triumphed, but showed its wings
and declared itself a bird when the birds were victorious. 'It seems',
the article continued, 'that Australia is suffering from the same confusion
and embarrassment', and has never had 'a truly independent defence policy'.(16)
Still stronger criticism was voiced by the Guangming Daily, which
described Australia's support for US actions as 'parrot-like behaviour',
and said the Australian government's claims that relations with Asia remained
its highest priority were not reflected in 'concrete policies':
What countries have seen instead are aid cuts to Asia and speeches by
the MP, Pauline Hanson, full of anti-Asian and anti-immigration sentiment.(17)
The Visit of the Dalai Lama
The final element in the friction in Australia's relations with China
came with the visit of the Dalai Lama to Australia in September 1996.
As soon as it was announced that the Buddhist leader and symbol of the
Tibetan independence struggle would be visiting Australia, the Chinese
Government began protesting against any suggestion that the Dalai Lama
would meet the Prime Minister or any senior Australian Government figure.
When the Prime Minister said he would indeed meet the Dalai Lama, the
People's Daily launched a particularly strident attack on the Australian
government:
...the reason for this absurd decision is that those [Australian] politicians,
in league with the Devil, have ulterior motives and are unwilling to abandon
their evil intentions of interfering in China's internal affairs.(18)
The paper warned that the decision would 'inevitably affect political,
economic and trade relations' between Australia and China.(19) When the
thirty minute meeting between Mr Howard and the Dalai Lama did occur on
26 September the Chinese Government issued a statement expressing its
'strong displeasure and deep regrets' and protesting that despite repeated
Chinese objections, the Australian Government had 'not only allowed the
Dalai Lama to visit Australia and offered him forums for his anti-China
activities, but also arranged for its leaders to meet him'. The statement
repeated the warning that the decision would 'unavoidably produce a negative
impact on relations between China and Australia'.(20)
The strength of the Chinese reaction to the Prime Minister's meeting
with the Dalai Lama was an indication of the sensitivity of the Tibet
issue for Beijing. Nevertheless, senior members of previous Australian
governments and parliament had held meetings with the Dalai Lama without
the vituperation which marked their reaction to Mr Howard's meeting. The
Chinese have always opposed such meetings but their response on this occasion
was at a new level. It is quite unusual for Australian foreign policy
to be subject to a repeated critique in the Chinese press.
The View from Beijing
The change in the character of Chinese statements about Australia needs
to be understood as the product of a general perception in Beijing that
Australian policy was being redefined under a Coalition Government. A
number of individual actions without a united objective in mind were interpreted
by the Chinese authorities as a co-ordinated policy response. The Australian
Government did not appear to appreciate the extent to which Beijing would
read a single coherent meaning into the actions. The view from Beijing
was that Australia under a Coalition Government was becoming less sympathetic
to the Chinese position on highly sensitive issues such as Taiwan and
Tibet and was moving to re-emphasise traditional (especially US) relationships
at the expense of Asian connections. Of particular disquiet from Beijing's
point of view, Australia's renewed stress on the importance of the US
alliance was seen as a return to a less independent foreign policy which
would conform more closely to US interests. This was regarded with particular
concern at a time when China-US relations were being affected by a number
of disagreements.
Following the efforts of senior Australian Government officials and
the meeting between the Australian Prime Minister and Chinese President
in Manila in November 1996, the government of China brought an end to
the hostile public critique of Australian policy. A Chinese presidential
spokesman was reported as describing the Howard-Ziang meeting as 'very
friendly':
One meeting cannot resolve all the problems, but the two leaders have
reached a common understanding to overcome our difficulties and keep better
relations in the future. This is the beginning of another stage; that
we should keep the momentum going.(21)
In January 1997, the Chinese deputy Foreign Minister, Chen Jian, told
an Australian journalist that 'understanding had been enhanced' and there
were 'good prospects for the further development of Sino-Australian relations'.
His comments indicate that the Chinese Government has a generally positive
attitude towards the prospects for Sino-Australian relations.
Politically and militarily, China and Australia pose no threat to each
other. Economically, the two countries complement each other. Furthermore,
there are many opportunities for Australia and China to cooperate with
each other in international and particularly regional issues.(22)
At the same time, Mr Chen's remarks also showed that Beijing remains
extremely sensitive about a number of issues which it believes impinge
on Chinese sovereignty and on China's right to take its place amongst
the major powers in the world. He said the difficulties in 1996 were due
to the Australian government taking 'some actions which ended up hurting
the national feelings of the Chinese people'. He concluded that:
As long as the two countries respect each other's sovereignty and territorial
integrity, bilateral relations will continue to develop and the potential
for cooperation between the two sides will be enhanced.(23)
Mention of 'respect for sovereignty and territorial integrity' are diplomatically
phrased references to key questions such Taiwan and Tibet, but also to
Hong Kong and the general issue of China's role in the world community.
Although Australia's relations with China have undergone a qualitative
change during the last decade and are no longer framed in predominantly
geopolitical terms, the Chinese leadership still conducts all its international
affairs with broader regional and global implications in mind.
Containment, Engagement and Australia-China Relations
Chinese perceptions of how it is regarded in international affairs are
still strongly influenced by suspicions that the US (and to some extent
Japan and other Western powers) harbour a desire to prevent China from
taking its place amongst the major players on the world stage. Chinese
officials look back on a history in which China saw itself as the 'Middle
Kingdom' to which the rest of the world paid tribute, followed by a hundred
years of humiliation and incursions into its sovereignty by foreigners.
When the Chinese people 'stood up', as Mao put it in 1949, and embarked
on a new effort to rebuild their country, the US instituted a policy of
'containment' which the Chinese Government considered was an attempt to
keep China weak and isolated. 'Containment' had ceased to be official
US policy by the 1970s and the US now conducts its relations with China
under the banner of 'constructive engagement', but Chinese officials often
view attempts by the US and its allies to place pressure on China over
any contentious issue as part of a latent desire to keep China down.
These crucial underlying factors in China's relations with the countries
of the West became especially evident in the discord which affected US
relations with China beginning from 1993. Relations deteriorated over
a number of issues:
- doubts, during 1993 and 1994, about whether the US would extend Most
Favoured Nation (MFN) trading status to China because of its human rights
record;
- China's lack of protection for intellectual property rights;
- China's nuclear tests and alleged export of nuclear-weapons-related
technology;
- US pressure on China to change its trading rules and practices as
a condition for joining the World Trade Organisation (WTO);
- the visit of the Taiwanese President to the US in 1995; and
- the dispatch of US warships into the Taiwan Straits during Chinese
missile firings at the time of the Taiwanese elections.(24)
To the Chinese Government, the trade disputes were a manifestation of
US unwillingness to accord China due recognition for its growing economic
strength. US actions over Taiwan and strategic issues began to be read
as signs of a return to the policies of 'containment'. Beijing feared
that while professing to seek 'constructive engagement' with China, the
US actually wanted to contain the rise of a rival superpower.(25)
Given the key role of the US alliance in Australia's foreign policy,
especially in Chinese perceptions, Australian actions are often interpreted
in Beijing in the context of wider US policy objectives. Australia is
seen as a faithful long-term ally of the US which supported the US during
the Vietnam War and the Cold War and emulated the US policy of recognising
the Taiwan regime as the legitimate government of China. At the same time,
Australia is appreciated for its capacity to act independently of the
US, including trading with China during the 1950s and 1960s and recognising
the PRC in 1972, six years before the US. During the 1980s, Australia's
close relationship with China also played a small role in facilitating
China's economic and political opening to the world in the post-Maoist
era. Australia also expressed its disagreement with US efforts, in 1993
and 1994, to link China's MFN status with the issue of human rights. Nevertheless,
the Chinese authorities remain highly sensitive to any perceived changes
in Australia's strategic and economic outlook and are especially wary
of any moves to return to what could be seen as a slavish emulation of
the US. While Australia and China have, since the 1980s, developed a strong
bilateral relationship based on shared interests, China still handles
its affairs with individual countries in the context of global strategic
relationships. As Australia's bilateral and regional involvement with
China grows in the future, a key challenge for Australia's policy-makers
will be to balance the demands of the relationship with China while maintaining
close strategic and economic ties with the US.
One of the central dilemmas for both Australia and the US will continue
to be the question of Taiwan. China under the current regime would never
accept a formally independent Taiwan, but Taiwan has been effectively
independent for many years and is becoming an increasingly important economic
player in the region, lobbying with growing effectiveness for a more regularised
status in the international community. The contrast of Taiwan's transition
to democratic rule with the authoritarianism and suppression of human
rights in China has been instrumental in winning Taipei many supporters
in the US, particularly in Congress. Any change in policy on Taiwan in
either Washington or Canberra would jeopardise the even more important
relationship with Beijing, yet the pressures on the current ambiguous
arrangements can only grow in the future.
The issue of Hong Kong is not fraught with the complexities of Taiwan's
status, but the territory's reunification with China in July 1997 has
many potential problems, not only in terms of their implications for US-China
relations but because of Australia's direct bilateral interests. Hong
Kong is a very important trading partner for Australia whose economic
future is of great interest for Australia, and Australia will be unable
to stand aloof from the tensions which may develop over the issue of political
freedom and human rights in the territory under Chinese rule.
Economic Growth and Political Uncertainty
The growing importance of relations with China for Australian policy-makers
is set to continue because China is maintaining rapid economic growth
even while entering a period of political uncertainty. International attention
has focused even more on this uncertainty since the death of Deng Xiaoping.
The Chinese economy has sustained an average annual growth rate of almost
ten per cent over the last decade and is projected to become the world's
second largest economy within the next ten years. China's growth, together
with Australia's greater relative economic involvement in the Asia-Pacific
region, have led to a twenty per cent average annual increase in Australia's
exports to China over the last five years. China is currently Australia's
fifth largest trading partner and if the trade figures with Hong Kong
were to be added after reunification in July 1997, the total would rank
third after Japan and the US.(26) The vigorous growth in the Chinese economy
has continued to create opportunities for Australian investment in Chinese
manufacturing, services and primary industries. Chinese investment in
Australian agriculture and minerals has expanded considerably in recent
years.(27)
In addition to the direct commercial implications, China's emergence
as a major economic power is of key strategic significance for Australia
because it guarantees a material basis for greater Chinese prominence
in regional and global affairs. China's economic success has boosted the
confidence with which the Chinese Government is conducting its foreign
relations and asserting its position in regional territorial disputes
such as the Spratly Islands,(28) in its relations with powers such as
the US and Japan and over issues such as human rights. While China's military
capability is limited and its armed forces are only at the beginning of
what will be a long process of modernisation, the country's rapid economic
development provides the necessary conditions for its eventual rise to
the status of a major military power.(29)
Paradoxically, China's rapidly expanding economy is also likely to be
at the root of future problems of political stability. The effective debunking
of Maoist ideology following the rise to power of Deng Xiaoping has meant
that the legitimacy of the Chinese Communist Party has come to rely on
its capacity to deliver access to material wealth. But the benefits of
the new approach have not flowed evenly to the Chinese people. In contrast
with the shared backwardness of Maoist China, regional disparities are
widening as well-situated provinces take advantage of new opportunities
while poorer regions experience far less growth. The rise of market-driven
economics has uprooted millions of people in search of work and thrown
the future of millions of workers in old state-owned industries into doubt.
With rising visible poverty and crime, many Chinese perceive that the
benefits of economic growth are being monopolised by a corrupt minority.
The suppression of the pro-democracy movement in June 1989, which arose
partly to protest against such problems, further weakened the legitimacy
of the Communists and has led them to depend increasingly on the power
of the armed forces. The Party continues to shrink from any ideas of political
liberalisation for fear of the complete loss of control which brought
about the collapse of the Soviet Union. Meanwhile the continuous growth
of the privately-owned economy and of foreign trade is steadily diminishing
Beijing's control over the functioning of the economy and its capacity
to exercise power over the daily lives of the Chinese people.(30)
In the background to these looming issues of social change, economic
inequality and pressure for political reform is the question of the leadership
succession after the death of Deng Xiaoping. Although Deng held no formal
office from 1990, he was still a figure of immense authority until his
death on 19 February 1997. His passing may exacerbate internal tensions
and contest for power within the Party leadership. His death will, at
the very least, throw popular attention back onto the issue of the role
of the Party. It was the spreading of a factional dispute within the Party
into the streets in early 1989 which provided a catalyst for the mass
movement which culminated in the events around Tiananmen Square in June
1989. While Deng's death is unlikely to provoke an immediate crisis, the
future course of the process of political change in China could profoundly
affect the character of Chinese foreign policy. With the loss of Maoist
ideology, the Party leadership has already increasingly emphasised its
role as the defender of Chinese nationalism. As Michael Yahuda has argued,
trends towards aggressive nationalism in foreign relations could be heightened
if there is division or uncertainty during the process of succession:
The less disruptive [the succession] may be, the more likely it is that
a self-confident leadership will emerge that would be able to pursue China's
sovereignty claims with moderation... The more difficult the succession
the more likely that a weak leadership would respond erratically and assertively
to perceived challenges, especially if it were dependent upon the armed
forces who are imbued with more virulent nationalist sentiments.(31)
China went through an extraordinary history of political convulsions
from the first Revolution of 1911 through to the Cultural Revolution of
the 1960s and 1970s.(32) Although the country is now making rapid progress
towards economic modernisation, it has yet to establish political institutions
which do not depend crucially on the will and authority of a few key individuals.
China is rapidly integrating into the world economy, but the state structures
which made integration possible are slow to reform and adapt to the new
Chinese society that economic change is creating. The Chinese Government
understandably expects that the country's emerging status as a leading
world economy should be given due recognition in global institutions and
affairs, but some parts of the international community still consider
that China does not conform fully to the established norms of international
relations. For its part, the Chinese Government, mindful of the fear and
suspicion with which it is regarded in some quarters in the US, tends
to interpret any pressure to reform its institutions and politics as a
new form of anti-Chinese containment. Moreover, any policy or action by
a foreign power which suggests a questioning of Chinese sovereignty over
Tibet, Hong Kong or Taiwan is regarded as an act hostile to the interests
of the entire Chinese nation.
These issues are fundamental to the background against which Australia
must conduct its relations with China. As a key element in Australia's
economic and strategic environment, China will occupy an increasingly
central part of discussion about Australia's foreign relations in the
future. The experience of the last year of Australia-China relations was
an excellent indicator of the kind of issues which must be dealt with
in order to maintain a stable relationship. The issues of the status of
Taiwan and Australia's dealings with the Taipei government, human rights
and the treatment of the Tibetan people, the conduct of aid and economic
relations, and Australia's alliance with the US are all matters of great
sensitivity for Australia-China relations. Individually, they have generally
been managed without major incident and the relationship between Canberra
and Taipei is tacitly accepted in Beijing. The actions of the Chinese
Government last year, however, indicated that if the Chinese authorities
perceive any movement in Australian policy which they interpret as inimical
to Chinese interests, they will not hesitate to call existing arrangements
into question. In particular, given the complexities of the Chinese relationship
with the US and Beijing's sensitivity about the West's acceptance of China
as a world power, Australia's relations with China will be crucially affected
by the outcome of efforts to manage the problems in US-China relations
during the second Clinton administration. Having reaffirmed the importance
of the US-Australia alliance, a major challenge for the Australian Government
will be to avoid misunderstanding in Beijing about the nature of Australia's
dealings with the US.
- Canberra Times, 27 November 1996, p.2.
- Edmund Fung, 'Australia and China', in P.J. Boyce and J.R. Angel,
Diplomacy in the Marketplace: Australia in World Affairs, Melbourne,
1992, pp.280-84.
- Michael Yahuda, The International Politics of the Asia-Pacific,
1945-1995, London, 1996, pp.207-211.
- Colin Mackerras, 'China', in R. Trood & D. McNamara, Asia-Australia
Survey 1996-97, Melbourne, 1996, p.124.
- Financial Review, 13 March 1996, p.9.
- Financial Review, 11 July 1996.
- Age, 17 August 1996, p.1.
- For a discussion of the issues surrounding the abolition of DIFF see
Ravi Tomar, A DIFFerence of Opinion: Cancellation of the Development
Import Finance Facility, Parliamentary Research Service Current
Issues Brief No. 20, 1995-96.
- Financial Review, 17 May 1996, p.2.
- Transcript of interview on ABC Radio National program AM, 6
June 1996.
- Rowan Callick, 'Beijing reviews attitude to Australia relationship',
Financial Review, 19 November 1996, p.47.
- Quoted in Sydney Morning Herald, 8 August 1996, p.8.
- Australian, 8 August 1996, p.2.
- Age, 9 August 1996, p.8. Canberra Times, 25 August 1996,
p.8.
- Australian, 23-24 November 1996.
- Age, 30 October 1996.
- Australian, 5 November 1996, p.6.
- Sydney Morning Herald, 26 September 1996, p.1.
- ibid.
- Age, 27 September 1996, p.3.
- Australian, 29 November 1996, p.2.
- Sydney Morning Herald, 18 January 1997, p.21.
- ibid.
- For a comprehensive analysis of the recent problems in US-China relations
and the prospects for the future see Frank Frost, The United States
and China: Containment or Engagement?, Parliamentary Research Service
Current Issues Brief No. 5, 1996-97.
- ibid., p.23.
- DFAT, Composition of Trade, Australia, 1995-96, p.40.
- DFAT, Country Economic Brief: China, August 1996, pp.58-59.
- The Spratly Islands are a group of islands in the South China Sea
which are subject to competing claims for sovereignty by the littoral
states. For details see Alan Shephard, Seeking Spratly Solutions:
Maritime Tensions in the South China Sea, Parliamentary Research
Service Background Paper No. 6, 1993.
- For a discussion of military aspects of China's power see Gary Brown,
China as a Military Power: Peril or Paper Tiger?, Parliamentary
Research Service Research Paper No. 1 1996-97.
- For a comprehensive discussion of the changes occurring in Chinese
politics and economy see Brian Martin, China in Transition: The Politics
of Economic Reform and Political Succession, Parliamentary Research
Service Research Paper No. 17, 1994-95.
- Yahuda, op. cit., pp.218-219.
- Following the overthrow of the decayed Empire in 1911, the failure
of the first Republican government to consolidate its position resulted
in the collapse of much of China into the rule of regional warlords.
Then followed the ruinous slaughter and destruction of the Japanese
invasion and a decade of war, accompanied by sporadic civil war between
the Nationalists and Communists. The upheaval of the Revolution was
soon followed by the disastrous social experiments of the Great Leap
Forward and the Cultural Revolution, both of which cost millions of
Chinese lives and which ruined the lives of millions more.
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