Julia Gillard’s China Policy: An Analysis, Eurasia Review

Julia Gillard’s China Policy: An Analysis

June 13, 2013

AUSTRALIA'S JULIA GILLARD

By Eurasia Review

By Aveivey D.

Introduction

Eyebrows were raised in the minds of some analysts and policy makers in the Asia pacific region when Australia’s Prime Minister Julia Gillard suddenly decided to pay an official five-day visit to China in April 2013, a time which did not quite seem opportune as tensions had heightened in the Korean peninsula over Pyongyang’s bellicose rhetoric and war cry and maritime tensions over Scarborough Shoal with the Philippines and over the Senkaku/Diaoyu Islands with Japan had created a volatile situation. All these developments were taking place at a time when Gillard was sculpting her government’s strategy for shared prosperity in a peaceful Asian century.

Economic factor

What propelled Gillard to take this sudden decision to travel to Beijing? From the composition of her team that travelled with her, it transpired that economic consideration was the main driver. The level of economic complementarity that has developed between the two countries, it is in neither country’s interest to allow political consideration to intervene in economic matters. The nature of the economic relationship between the two is such that while Australia needs a reliable market to sell its raw materials, which China provides, and China needs a reliable source for uninterrupted supplies for critical raw materials that its burgeoning economy needs, which Australia makes available. Looked from another side, Australia provides a reliable market for Chinese manufactured products. No wonder, Gillard took with her a team of ministers – foreign affairs, defence, trade and financial services – so that bilateral ties can be deepened in all dimensions. Gillard probably thinks that if the economic ties are kept under solid foundation, this will facilitate differences on security issues to disappear.

The question that arises: Is such a policy in sync with Australia’s other partners in the Asia Pacific region whose perspectives of China are in variance with that of Australia? True, China is Australia’s largest trading partner. Its export of iron ore alone fetches almost $43 billion a year, which easily dwarf most of the world’s bilateral aggregate trade relationships. Also, by signing a historic pact with China for direct annual meetings with Premier Li Keqiang, Gillard scored a foreign policy coup of sort. Both the leaders also pledged for formal cooperation on climate change, international aid and currency trading. The deal represented one of the most significant breakthroughs in the Australia-China relationship since Gough Whitlam recognized the communist state more than 40 years ago.

The annual talks will feature the Prime Minister, the Treasurer and the Foreign Minister in face-to-face gatherings with their Chinese counterparts. According to Gillard, the new partnership was “a big step forward” and would build on the existing level of cooperation. She observed: “It’s a step forward for us as a nation. It’s important to peace, stability, the ability to talk about those things, the ability to talk about our economic relationship in a structured dialogue every year,” Ms Gillard said. Some see the agreement as potentially the greatest single leap in relations for the two countries since diplomatic recognition back in 1972. Apart from Australia now, China only has this type of yearly dialogue with Russia, Germany, Britain and the EU.

Strategic Partnership

Another major victory for Gillard during the Beijing sojourn was the agreement to build a strategic partnership, which was pending for the past two years. Even a month before Gillard’s departure, her office was not sure if the Chinese were prepared to make a commitment and thus the suspense had remained. The fact that she clinched the deal was another landmark victory for her.

Since China was in the midst of a leadership transition during this time, the Chinese indecision could have been because of that. The Party Congress had to decide in November 2012 the new leaders of the Communist Party of China. Then the National People’s Congress (NPC) had to meet in early March 2013 and the appointment of the new State Councilor in charge of foreign affairs (Yang Jiechi) and China’s new foreign minister (Wang Yi) were announced on 16 March. It was only after the conclusion of the NPC did Premier Li inform Gillard prior to her departure that the strategic partnership will be inked.

Until now, bilateral ties focused only on economic issues and political relationship with China was not a priority. But given China’s rise and increasing role in regional and global affairs, political engagement became inescapable for Australia. By clinching such a deal soon after the leadership transition in China, it was a diplomatic coup for Gillard.
Having signed the strategic partnership deal with China, Gillard’s real challenge begins now. Gillard may have sent the message across Australia’s friends that Australia welcomes China’s rise but how she deals with the big strategic challenges of the Indo-Pacific Asia in the coming months is to be seen. Australia’s relations with China had soured during the period when Kevin Rudd was Prime Minister. But Australia being a middle power, democracy, a US ally, a non-permanent member of the UN Security Council, it is to be seen how Gillard protects Australia’s interests in addressing three critical zones of armed tension in Asia where China has shown recent belligerence: the South China Sea, the East China Sea and North Korea’s war rhetoric and nuclear weapons program, all of which threaten to destabilize peace and order in the Indo-Pacific Asia.

So, was Gillard’s China trip was successful? There is no denying the fact that Gillard’s signing of the strategic partnership was the hallmark of her diplomacy and complements the $130 billion trade turnover that both the countries have achieved thus far. Apart from this, both Australia and China agreed to have military-to-military dialogue. The first US-China-Australia military exercises were first explored way back in 2009 but not much progress was made. This time around, in view of the elections in coming September, the considerations could be different. The former US Defense Secretary Leon Panetta invited an Australian warship to RIMPAC exercises in Hawaii in 2014, where China could join as an observer. It would in the fitness of things if Australia invites China to join as an observer to this multilateral military exercises on Australian soil.

With China and Australia signing the strategic partnership, the 2014 Pitch Black exercises provide an ideal occasion to set up military-to-military cooperation, which will serve the strategic goal of building confidence and decreasing regional tensions. If Chinese PLA-Air Force pilots are able to train in these multilateral exercises, this will contribute to confidence building and decreasing regional tensions. If the US and Australia invite China to join the three-nation military exercises, that would allay China’s fears.

The deal was the works for more than a year following personal letters between Gillard and former president Hu Jintao and phone calls to current Premier Li. Gillard was aware that China was under a leadership transition and the formal processes would take some time. Foreign Minister Bob Carr hailed the agreement as “a milestone” in the countries’ relationship. Carr said Australia will benefit from a formal avenue for consultation between the two countries. Indeed, the agreement would give the ties tremendous momentum and impetus. Welcoming the deal, even former Prime Minister Malcolm Fraser said that what Gillard achieved was a big China deal.

Of other issues that Gillard clinched deal with China was closer cooperation on climate change to set up a joint experts group to share information on carbon markets. Indeed, these outcomes will build the comprehensive relationship that Australia has envisaged in the “Australia in the Asian Century White Paper”. Also, from 2015 there will be a trial of allowing Chinese e-passport holders to use the SmartGate system, which is currently only available to Australian, New Zealand, and US passport holders. There is also a new memorandum of understanding to drive cooperation on controlling the use of chemicals which can be used to make illicit drugs.

That Australia-China relationship is now placed in a robust footing cannot be denied. But political differences within the ruling party Australia could threaten and impact the great effort by Gillard to make China relevant to Australia’s interests. There are fears that if Kevin Rudd returns as Prime Minister in the September 2013 elections, frictions between Australia and China might reoccur. That is what Chinese scholars fear. The Mandarin-speaking Rudd has a negative reputation in China. China would feel concerned that if Rudd returns to power, he would support President Obama’s Asian ‘pivot’ policy as well as Japanese ‘designs’ for the Pacific cooperation, thereby further complicating regional strategic issues. Ralph Cossa, President of the Pacific Forum in Honolulu, run by the Centre for Strategic and International Studies observes: “’The Chinese certainly have Rudd pegged on where he stands vis-a-vis China and presumably he’s let them know this anyway”.

During Rudd’s term as Prime Minister, the relationship between the two countries was rocked by a series of disputes over foreign investment, defence postures, human rights and the arrest of Australian citizens. Rudd openly criticised Beijing over human rights in Tibet and Xinjiang during an official visit to China and he delivered that message in Chinese. The Defence White Paper from the Rudd era also suggested that China was a security threat. The relationship hit a low point in mid-2009, after the Chinese state-owned giant Chinalco failed to acquire a substantial part of Rio Tinto, and the subsequent arrest and conviction of the Rio Tinto executive Stern Hu.

Assessment

Gillard’s China policy may be in conformity with Australia’s national interests but if some elements of that appear to be in variance with its other partners in Southeast Asia and in the Pacific region that would be new challenge for her. Having released two important White Papers defining what Australia’s role would be in the Asian Century as well as what would be Australia’s National Security Strategy, Gillard has to craft Australia’s China policy that would comply with the policy prescriptions defined in the two above-mentioned policy documents. One needs to watch in the coming months if Gillard lives up to her own expectations and to the expectations of the people of the country.

Ms. Aveivey D. is a doctoral candidate at the East Asian Studies, School of International Studies, JNU, New Delhi. E-mail: aveivey@gmail.com