A Role for ASEAN in Stabilising Australia-China Relation

While signs of a thaw in relations between Australia and China are to be welcomed, Colin Heseltine writes that a lot of work remains to be done and the strength of our economic, security and people-to-people relations with the immediate region will have a key role to play.

Xi Jinping’s meeting with Prime Minister Albanese in Bali has rightly been heralded in Australia as an important first step in moving relations between the two countries towards greater normality, after years of diplomatic freeze imposed by China.

The 50th anniversary of diplomatic relations between the two countries this month is a good time to reflect on how we might work together constructively - despite the many differences - in areas of common interest. Asialink this week held a forum to look at some of these, including the environment, water, health, biotech and culture. How Australia and China might work together constructively in the ASEAN region also was considered. In this regard, the Albanese-Xi meeting in Bali offers some significant possibilities.

It is understandable that the meeting would be welcomed by Australians. Some commentators, with an excessive sense of triumphalism, have even gone as far as referring to China’s “capitulation” to Australia’s resilience in pushing back against Chinese coercion.

It is important though, rather than viewing the meeting in narrow parochial bilateral terms, to see the meeting in the context of China’s broader regional and global position.

With the Chinese Communist Party’s 20th Congress out of the way, and with Xi securing control of the top Party institutions, the way has now been cleared for him to move on from his preoccupation with preparing the ground for a successful outcome at the Congress. No doubt, this has not been an easy process for the Xi leadership which has had to deal with many substantial and unexpected challenges in the past couple of years.

These have included the massive impact on the economy caused by COVID-19 and the domestic property collapse, as well as difficult longer term structural issues such as the transition away from infrastructure-led growth to greater services and consumption-oriented growth (or, as Xi puts it, more focus on quality and balanced growth rather than quantity).

Added to this are other even longer-term challenges such as an aging population and environmental degradation. We also have seen reports of protests and demonstrations occurring in most parts of China, often related to COVID lockdowns and peoples’ financial losses caused by the property crisis. Running China is not an easy business.

Now, with some free space after the Party Congress, Xi can focus on implementing his ambitious program for national rejuvenation as outlined in his report to the Congress. More than ever, he needs a stable and constructive regional and global environment in which to do this. China’s strident and assertive diplomacy and external actions in recent years may have served a domestic purpose for Xi as he appealed to nationalism to garner popular support for the CCP in the leadup to the Congress. But now is a time to tone down excessive nationalism and wolf warrior diplomacy.

It is likely therefore that Xi went to Bali with the intention to stabilize China’s diplomatic position in Asia and beyond. Southeast Asia, where China has vital economic and political-strategic interests, would have been a major focus of his diplomatic efforts. It is also the region that is most exposed to China’s growing power. The benefits this brings for the region’s economic growth must be tempered with concerns about China’s influence over the political, military, and cultural affairs of those countries.

Xi’s meeting with US President Biden, while not solving any of the key issues between the two countries, was apparently successful in taking some of the heat out of bilateral tensions, and possibly providing a start towards putting a floor under the relationship. This would have been welcomed by Indonesian host President Joko Widodo and other regional leaders, who fear being caught up in big power conflict.

It was therefore logical for Xi to also meet the Australian Prime Minister as a signal to the region that the diplomatic freeze with US ally Australia had ended, and that China was pursuing a more collegiate and constructive approach to regional relationships. To maintain the diplomatic freeze with Australia would have sent the wrong signal to the region.

This is good news for Australia which has standing in the region. The Albanese Government’s serious efforts in the past six months to intensify Australia’s efforts with ASEAN countries will have been noted in Beijing. Australia’s partnership with the region is significant. It would therefore have made no sense for Xi to meet Biden but to continue to blacklist Australia. This underscores how important it is for Australia to keep building its engagement with ASEAN countries.

The recent appointment of former Macquarie Bank CEO, Nicholas Moore, as envoy to Southeast Asia to focus on economic relations was an excellent and farsighted move. Australia’s trade and investment relationship with ASEAN, with a population of 660 million and a combined GDP of US $2.5 trillion (double that of Australia), is a significant economic force. But Australia’s two-way trade of $240 billion, while quite substantial, is still under-performing when the advantages of market proximity are considered.

Enhanced engagement with Southeast Asia works to Australia’s diplomatic benefit in two ways. Strong economic, security and people-to-people relations with the region improves our standing with China, which is also seeking to strengthen its ASEAN relationships. And, having a constructive, less adversarial, relationship with China, at the same time as maintaining our alliance relationship with the United States, improves our standing with Southeast Asian countries who want at all costs to keep big power conflict out of the region.

There are some in Australia who are dismissive of ASEAN because its consensus decision-making process makes it difficult to make hard political decisions (e.g. on Myanmar). But this misses the point: its member nations constitute a formidable, growing economic force, in a strategically vital region (especially for Australia).

This is the reason why China pays so much attention to ASEAN. Singapore’s former foreign minister, Sinnathamby Rajaratnam, once noted that ASEAN had to fill the region’s vacuum on its own “or resign itself to the dismal prospect of the vacuum being filled from outside”. ASEAN has had some success in filling the vacuum and wants to keep it that way. Australia too has an interest in this and can play a constructive role towards its achievement. If China, with its own interests in mind, can be persuaded to work constructively to this end with ASEAN and other regional countries like Australia, the region will be better off. It is too soon to assess whether this can be achieved but at least the Bali meetings were a step in the right direction.

Colin Heseltine was Australian Ambassador to the Republic of Korea (2001-05), head of Australia's representative office in Taiwan (1992-97) and deputy head of mission in the Australian embassy in Beijing (1982-85 and 1988-92). He is a senior adviser to Asialink.