The Albanese Government’s stabilisation approach has successfully reset Australia-China relations, demonstrating that economic engagement and strategic caution can coexist. By maintaining stability while reinforcing security measures, Australia ensures it can navigate great-power competition without unnecessary provocation, preserving its national interests in the long term.
Since entering office in May 2022, the Albanese Government has approached its China policy through the prism of stabilisation. Its objective has been to normalise relations after a period of friction under the previous government, particularly by ensuring the cessation of trade being used as a bullying instrument. If stability was its aspiration, the Government has succeeded. All trade barriers have been lifted, high-level meetings have resumed, and Australian journalist Cheng Lei–who spent three years in a Chinese jail on trumped-up charges–was released.
Now Australia-China relations have stabilised, is there a need to pivot to a next phase? Some Australian commentators have suggested that stabilisation plays directly into Beijing’s hands and that Australia ought to place strategic competition and deterrence, rather than stability, at the centre of its China policy. Emphasising stabilisation, however, does not come at the expense of contributing to a regional strategic balance. It suggests that Australia can continue to treat China with caution, implement the necessary safeguards needed to manage future coercive actions from Beijing, while at the same time leaving the door open for China to consider Australia’s interests and for the countries to engage in constructive ways. It is clear, then, that Australia’s interests vis-à-vis its China policy are best served when guided by such a framework.
Stability as a foundation
Critics of the Albanese Government’s stabilisation policy overlook the point that, even while mending Australia’s strained relationship with China, it has not reversed any of the strategic-focussed policies the previous government implemented, such as foreign interference laws, making universities and sub-national governments register their engagements with foreign entities, AUKUS, the Quad, and developing the Guided Weapons and Explosive Ordnance Enterprise. In fact, the current government has doubled down on the approach of contributing to the blunting of Chinese influence in the Indo-Pacific. Its major white papers–the 2023 Defence Strategic Review and the 2024 National Defence Strategy–clearly identify China as a strategic challenge. Meanwhile, defence spending has increased, cooperation on regional security with partners has been expanded, and the Foreign Investment Review Board has been reformed to effectively bar Chinese investment in Australia’s critical minerals sector. These efforts have not, however, deepened the freeze that began in 2020. Rather they have occurred alongside the thaw in relations, indicating that China’s willingness to re-engage with Australia was not directly inspired by a change in Australian policy.
As the above indicates, the coercive measures imposed on Australia in 2020 cannot have been solely motivated by strategic policy change. One view is that this was partly the result of ill-disciplined diplomacy that saw Australia’s most senior politicians unilaterally call for an investigation, with powers akin to weapons inspectors, into the origins of Covid-19. But look at the actions that have caused China to escalate cross-strait tensions in recent years. It has not been the United States strengthening its economic ties with Taiwan, or US arms sales or military aid. It was not even American troops rotating on and off the island nation. In fact, China has only sought to increase the intensity of military exercises around Taiwan in direct protest against widely publicised symbolic assertions of Taipei’s sovereignty–contradicting Beijing’s long-held “core interest” that sees Taiwan as a Chinese province. This has consisted of high-level meetings between US and Republic of China (ROC) leaders, most recently in December 2024, and speeches delivered by President Lai Ching-te that were perceived by China as inflammatory.
The takeaway from this is that atmospherics and rhetoric matter in relations with China. Moving forward, Canberra must carefully manage the frame through which its policy, rhetoric, and intentions are perceived by Beijing. This will require Australia to demonstrate the necessary respect for China’s interests–as all middle powers must when dealing with a superpower. As the recent years under Labor’s stabilisation policy have shown, doing so will place Australia in the most favourable position to continue responding to the strategic challenge posed by China without these decisions prompting retaliatory coercive measures.
Stabilisation as a long-term framework
There is a clear tension between Australia’s security and economic interests in its China relationship. On one hand, a functioning and a constructive relationship with China is very important to Australia. The Chinese and Australian economies remain highly complementary. And, as a multipolar order now fundamentally exists, it is essential that Australia can engage with the most consequential country in its region. On the other, however, Canberra has cause for concern over a region that is dominated by China. If this were to arise, the status quo of international trade, underpinned by US power, that has unquestionably benefited Australia, and China for that matter, would be upended. China could also project its power far deeper into, and far more effectively in, Australia’s immediate region–heightening a sense of insecurity.
The stabilisation policy has already been seen to provide the manoeuvrability needed for the Australian Government to respond to strategic challenges while maintaining dialogue with China. Relevant Australian ministers have been able to publicly voice their displeasure with PRC actions viewed as aggressive. At the same time, progress on areas of shared benefit has been achieved.
Maintaining this policy in the long term would see Australia continue to be more predictable with its concerns and its policy responses. As disputes inevitably arise, Australia should never accept actions contrary to its interests, but great efforts should be made to mitigate, manage, and resolve these issues through established channels.
What this framework lacks in imagination, it gains in serving Australia’s interests. Opportunities will be opened to remain engaged with China on areas of bilateral cooperation like research collaboration and trade, and broader global challenges like climate change and technology governance. This will not, however, be traded off for policy concessions. A framework of stability will allow Australia to continue to back the United States in its geostrategic competition, support friends in the region with their endeavours to maintain their strategic space, and contribute to the balancing of China’s influence in Australia’s immediate region.
Emphasising stabilisation has already proven to be an effective approach to managing relations with a superpower. The Albanese Government conceded nothing of substance to calm tensions and both countries have been better off since. It is yet to be seen whether the Coalition’s Shadow Foreign Affairs Spokesperson will take the same approach to valuing tone as Simon Birmingham did. But they are well advised to do so because, as Australia and China are on distinctly opposing sides in the competition for strategic influence in the Indo-Pacific, valuing stability long term affords Australia the space to assert its worldview while not unnecessarily harming relations. Ultimately, this will see Australia best-placed to navigate the complexity of its relationship with a rising China.
Ethan Pooley holds a double bachelor’s degree in Social and Political Science, and International Studies from the University of Technology Sydney. In 2024 he interned at the Australian Institute of International Affairs.
This article is published under a Creative Commons License and may be republished with attribution.
