According to the Australian Broadcasting Corporation (ABC), Australian Prime Minister Albanese made an official visit to China from July 12 to 18, covering Shanghai, Beijing, and Chengdu. Notably, this visit marks his second visit to China since becoming Prime Minister in 2022, and it is his first foreign trip after re-election in May, coinciding with the second decade of the China-Australia Comprehensive Strategic Partnership.

How can Australia maintain its economic relations with China while strengthening its security alliance with the United States? Australia once had the idea of "replacing China with India," but what challenges did it face later on? Observer Net spoke with Yu Lei, a professor at Shandong University and an expert on Asia-Pacific issues, about these topics.

On July 12, Australian Prime Minister Albanese arrived in Shanghai, China. Reuters

"Two Courts" Strategy: The Influence of the Commonwealth Tradition on Geographical Perception

"Australia has been deeply influenced by the British Empire, forming its unique regional security perspective," Yu Lei pointed out. Since the establishment of the Australian Federation in 1901, Australia has divided the Asia-Pacific region into two strategic zones: the South Pacific was seen as its "backyard," while Southeast Asia was regarded as its "front yard." This "Two Courts" strategy has profoundly influenced Australia's foreign policy orientation. Based on this geopolitical perception, Australia, for a long period after the formation of the federation, always viewed Britain as the hegemon in the Asia-Pacific region and positioned itself as a secondary hegemon in the region.

After World War II, as the United States became the global hegemon, Australia's positioning also changed, viewing itself as one of the four "middle powers" in the Asia-Pacific region. During President Bush's administration, he openly stated that the United States was the "sheriff" of the Asia-Pacific region, while Australia was the "deputy sheriff." This statement not only reflected the U.S. emphasis on Australia but also showed that as a "middle power," Australia had its own strategic considerations and security thinking in the region.

Therefore, Australia has consistently adhered to the position that the United States is the most solid military ally, believing that the military alliance with the United States is the cornerstone of its military and foreign policy, forming a deep strategic bond with the U.S.

During the late Cold War, due to China's opposition to Soviet expansion, there was a certain consensus between China and Australia and the U.S., so Australia did not have a clear "side-taking" issue at that time.

"The Largest Trading Partner Is Not a Military Ally": Australia's Dilemma in Choosing Sides

According to official data released by the Department of Foreign Affairs and Trade (DFAT) of Australia, China had become the third-largest commodity trading partner of Australia by 1997, following Japan and the United States. By 2009, China's trade volume with Australia had surged, surpassing Japan and the U.S. for the first time, becoming Australia's largest trading partner.

Entering the 21st century, with the end of the Cold War and the continuous rise of China's economy, Sino-Australian economic and trade relations rapidly deepened. Thus, "how to maintain balance in the U.S.-China relationship" gradually became an important topic in Australian domestic politics. Former Prime Minister John Howard publicly stated that Australia should not take sides between the U.S. and China, emphasizing that "Australia has its own national interests, which are not entirely equivalent to those of the U.S."

In 2004, the U.S. further pressured the Howard government to clarify its stance: "If a conflict arises between the U.S. and China, would Australia stand on the U.S. side against China?" In response, then-Australian Foreign Minister Alexander Downer pointed out that the U.S.-Australia Alliance Treaty did not mean that Australia must automatically intervene in a war involving a third country. The treaty only had binding force when a third country launched an armed attack on the U.S. or Australia's territory. Yu Lei analyzed that this response from the Howard government clearly demonstrated its strategic caution, trying to maintain Sino-Australian economic cooperation while avoiding challenging the security alliance with the U.S.

In 2009, Australia faced the reality that its most important trading partner was not a formal security ally, leading to intense domestic debates on how to coordinate national security and economic interests. Under this context, the governments of Rudd and Gillard after Howard basically continued the "balanced diplomacy" strategy, striving to deepen Sino-Australian economic and trade relations while maintaining the strategic security link with the U.S., aiming to maintain a relatively flexible diplomatic space between the U.S. and China.

This "balanced state" roughly lasted until the second half of 2016. At that time, former Prime Minister Turnbull publicly expressed concerns that the lease of Darwin Port to a Chinese enterprise might threaten national security, drawing widespread attention. The subsequent Morrison government took a more hardline stance on China, questioning Chinese students' involvement in espionage activities, restricting Chinese investments in Australian companies, and pushing for multiple review measures, thereby escalating tensions in Sino-Australian relations and increasing bilateral trade friction.

According to data from the Australian National University (ANU), Chinese enterprises invested approximately 16.5 billion Australian dollars (about 12 billion U.S. dollars) in Australia in 2016, reaching a historical peak. However, as Sino-Australian relations increasingly deteriorated, investment plummeted. Investment dropped to about 2.5 billion Australian dollars in 2019 and further declined to about 1 billion Australian dollars in 2020, with decreases of 47% and 61%, respectively.

Yu Lei analyzed that this economic impact triggered widespread dissatisfaction in Australia, objectively creating favorable conditions for the Labor Party led by Albanese to win the election. After the new government came to power, its foreign policy showed a clear "pendulum reversal" characteristic, on one hand using conciliatory diplomatic language to ease tensions with China, and on the other hand continuing to deepen military alliances with the U.S., trying to find a new balance point between national security and economic interests.

"Replacing China with India"? A One-Sided Wish of Australia's Former Prime Minister

Therefore, in recent years, there has been intense debate within Australia about whether it can replace the Chinese market.

In August 2021, Australian-India Trade Envoy and former Prime Minister Tony Abbott wrote in The Australian newspaper: "The answer to all problems with China lies in India," and advocated that "India can completely replace China." He believed that signing a free trade agreement with India would not only help the country's economic development but also be an important signal for democratic countries to "break away from dependence on China."

However, "from a data perspective, this concept is not realistic," Yu Lei pointed out. The total value of goods Australia exports to China annually is about 160 billion Australian dollars, while according to official Australian forecasts, Australia's exports to India will only reach 35 billion Australian dollars by 2035. In other words, even by 2035, the capacity of the Indian market still cannot replace the existing Chinese market.

In fact, China is currently Australia's largest export market. About 33% of Australia's exported goods go to China, and China is also its largest trading partner, accounting for 25% of Australia's overall international trade. More importantly, China is the largest source of Australia's trade surplus, bringing about 70 billion Australian dollars in surplus income annually, and occupying an irreplaceable position in Australia's foreign exchange structure.

"From this, it can be seen that the Chinese market is irreplaceable for Australia. This reality forces Australia to make a balance and coordination between economic interests and strategic considerations when handling Sino-Australian relations," said Yu Lei.

"Additionally, China has always advocated peaceful development in the Asia-Pacific region, emphasizing regional stability and common prosperity. In multilateral regional cooperation, China promotes the 'three processes' of economic integration, trade liberalization, and investment facilitation," Yu Lei believes. This concept is highly consistent with Australia's long-standing position. As a typical export-oriented economy, Australia is highly dependent on external markets, especially valuing institutional openness and cooperation mechanisms in the Asia-Pacific region. On the level of concepts, China and Australia have highly consistent goals in promoting the prosperity of the Asia-Pacific economy."

However, Yu Lei also pointed out that although the two countries share many commonalities, the involvement of some external major powers has made the Asia-Pacific situation increasingly complex. The tension in regional security has brought more challenges to Sino-Australian cooperation and increased the uncertainty of future development.

Strategic Choices and Balanced Pathways: Albanese's Practical Considerations

According to Reuters on July 11, Australian Prime Minister Albanese stated before departing for Beijing that Australia would firmly advance the AUKUS nuclear submarine project and would not waver due to changes in the U.S. domestic political situation, maintaining deep defense cooperation with the U.S. and the UK.

AUKUS is a military security alliance established by Australia, the UK, and the U.S. in 2021. Its core content includes helping Australia acquire nuclear-powered submarine technology and sharing advanced military technologies in areas such as cybersecurity and artificial intelligence. This alliance is seen as an important strategic move to counter China's influence in the Indo-Pacific region.

On July 14, joint military exercises involving 19 countries including the U.S., Japan, and others were ongoing in Australia. Associated Press

Yu Lei stated that this position continued the policy direction of former Prime Minister Morrison, who had highly praised AUKUS cooperation, highlighting Australia's deep reliance on the U.S. in the security field.

According to Associated Press on July 14, Australia is conducting the "Talisman Sabre" joint military exercises with 18 countries including the U.S., Japan, South Korea, and the UK in Queensland and surrounding waters. This exercise is the largest in the series of exercises, and the public generally believes that this move aims to respond to China's growing military presence in the South China Sea and the Western Pacific region.

In addition to defense cooperation, Australia is also increasingly strengthening coordination with the U.S. and Western countries in economic security. In 2023, the Biden administration launched the "Critical Minerals Alliance," and Australia, as a major mineral resource country, actively participated in it, aiming to play a key role in this multilateral platform. By strengthening cooperation with U.S. and Western countries in the critical minerals sector, Australia not only hopes to consolidate its position in the global strategic resource supply chain but also aims to enhance its economic security and industrial chain resilience.

"However, this strategic layout has obvious shortcomings. Although it has abundant resources, Australia is severely dependent on China in terms of refining and processing," Yu Lei pointed out. Currently, the most advanced mineral refining technology is basically concentrated in China. In key areas such as rare earths and iron ore, although Australia has the world's leading resource reserves, it cannot fully realize the value of its resources due to the lack of China-led high-end purification and deep processing technology.

"Looking back at recent years, before Trump's second term, U.S.-Australia relations remained stable. The U.S. was committed to integrating the strength of its allies, consolidating its dominance in the Indo-Pacific region, and continuously pushing forward the strategy of containing China. However, the Trump administration implemented an aggressive 'America First' policy, shaking Australia's confidence in the U.S. security commitment."

Yu Lei believes that this uncertainty has instead prompted the Australian government to gradually strengthen the diversity of its foreign strategy, beginning to explore a more balanced diplomatic path, actively expanding cooperation space with China in regional affairs and economic and trade fields. Therefore, facing the increasingly intensified competition between the U.S. and China and the real constraints of structural dependencies, Australia is increasingly inclined to maintain a "vague side-taking" posture, seeking greater strategic flexibility in the great power game.

Under this context, the "pendulum reversal" of the Albanese government is a manifestation of Australia's flexible adjustment of its foreign strategy. On one hand, it strengthens the security alliance with the U.S., and on the other hand, it cannot avoid the reality of China as its largest trading partner. In the future, how Australia balances security and economics, values and practical interests in the complex and changing international landscape, will remain a core challenge for its foreign policy.

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