Australia now stands at a unique crossroads in its approach to an increasingly assertive China, our largest and critical export market. Australia is at a pivotal moment with both opportunities and obstacles ahead. It will have to balance economic interdependence, rising military assertiveness and regional security threats. The environment has become more dangerous as China continues accelerating its military buildup and intimidation of Taiwan. At the same time, the country steps up its systematic repression across the country—including in Hong Kong, Tibet and Xinjiang.
China’s role doesn’t stop at its borders Recently, China’s part in the Belt and Road Initiative has had a serious impact on global trade and environmental relationships. As the world’s largest emitter of greenhouse gases, China leads in renewable energy production, contributing 70% of the world’s electric vehicles (EVs) and 80% of solar panels. This duality of China’s position creates a difficult conundrum for Australia, which now must weigh the economic benefits of continuing cooperation against the growing geopolitical implications.
Economic Interdependence
China is still Australia’s most important trading partner, taking more than a third of Australian exports. The economic relationship between the two nations has been both mutually beneficial and fraught with tension. Recent months have brought this nuance to the fore. In this regard, the case of Australian writer Yang Hengjun, imprisoned in China and in declining health, should not be overlooked.
Australia’s federal government is very concerned about this trend. Yet, at the same time, they recognize the vibrant economic ties that bind the two countries together. Prime Minister Anthony Albanese has emphasized the importance of keeping Australia’s interests at the forefront, stating, “We’ve made it very clear that we will see the Port of Darwin return to Australian hands. That’s what we committed to during the election.”
The interdependence between Australia and China goes beyond the obvious—all-important sectors such as agriculture, mining, and education are connected. With Australia continuing to export record amounts of iron ore and coal, the economic stakes couldn’t be higher. Growing criticism over human rights abuses in China makes it harder for Australia to keep the relationship largely economic in nature.
Military Tensions
— leaving Chinese troops near their border, which contributed to their decision to warn against military expansion. During the past year, the People’s Liberation Army Navy made news by largely circling Australia. This mighty showing is a powerful signal of a force that is not to be ignored. This military assertiveness comes alongside bullying rhetoric directed at Taiwan from the PRC, increasing concern for the stability of a key regional flashpoint.
Richard McGregor, an expert on China’s role in global affairs, commented on these developments: “China’s not a trusted security partner for Australia, so engaging too much with Australia is really out of bounds.” He further noted the balancing act that Australia must perform, stating, “So it’s a very perilous path we have to tread.”
These military accomplishments are happening at the same time as China’s otherwise nuclear and conventional military build-up. The implications for Australia are significant as it grapples with how to respond to China’s increasing assertiveness while ensuring its own national security.
Renewable Energy and Climate Cooperation
Rising tensions in other aspects of the bilateral relationship. There is huge room for joint partnership on clean energy and other climate action. China has made large investments in all types of renewable energy technologies and is actively working to decarbonize its industrial production. As noted by Caroline Wang, “In two days in May this year, China installed [the same] amount of renewables that Australia installed in the whole of 2024.”
China’s Ambassador to Australia, Xiao Qian, made headlines this week with these welcome remarks about China-Australia cooperation. This includes smart moves in artificial intelligence and other tech advances. These acts, which together have the potential to support more pragmatic, bipartisan solutions to pressing global challenges, should inspire the development of similar prongs.
Penny Wong highlighted China’s central role in tackling various international issues: “China’s size and weight makes it central to solving global challenges, from climate change to global public health, from international trade to the energy transition.” This recognition of China’s significance is a welcome sign that meaningful engagement between the two countries might be possible.
