Australia (Commonwealth)_ The year 2024 witnessed significant strides in the stabilization of Australia-China relations, building on the diplomatic efforts initiated after the election of Anthony Albanese’s Labor government in 2022. The removal of trade restrictions, culminating in the resumption of live rock lobster exports in December, marked a milestone in overcoming Beijing’s economic coercion campaign. High-level bilateral engagements further underscored the improved rapport, with visits by prominent officials such as China’s Foreign Minister Wang Yi, Chinese Premier Li Qiang, and Australian delegations to China. The year also saw Australian Prime Minister Albanese meeting President Xi Jinping on three occasions, reflecting a sustained dialogue on critical matters.
Despite these positive developments, challenges persisted. Early in the year, Australian intelligence raised concerns over espionage and foreign interference activities linked to China. A dangerous aerial incident in the Yellow Sea in May involving a Chinese fighter jet and an Australian navy helicopter further strained ties. Beijing’s state media continued to criticize Australia’s participation in AUKUS, the Quad, and joint military exercises in the South China Sea, along with its procurement of Tomahawk missiles from the United States. However, these tensions, while notable, did not derail the overall trajectory of improving relations.
Looking ahead to 2025, the Australia-China relationship faces a range of uncertainties, shaped by domestic and international factors. Two pivotal developments stand out: the impending Australian federal election, which could bring a Coalition government with a contentious history regarding Beijing, and the unpredictable policy directions of the U.S. Trump administration. These dynamics highlight the intersection of Australia’s security alliance with the United States and its economic interdependence with China.
One critical area of focus is trade, particularly concerning crucial minerals. The U.S. administration’s increasingly protectionist stance, as exemplified by President Trump’s proposed tariffs on Chinese imports, adds complexity to Australia’s economic strategy. While Australia’s trade relationship with China remains vital, especially in resources like iron ore and lithium, Canberra faces mounting pressure to align with U.S. policies. The Reserve Bank of Australia’s warnings about the economic impact of an extreme trade war underline the stakes involved. Moreover, China’s dominance in refining and processing critical minerals, coupled with its significant investments in Australian mining, underscores the delicate balance Australia must strike between economic benefits and geopolitical concerns.
The Minerals Security Partnership, led by the U.S., aims to reduce reliance on Chinese-controlled supply chains, yet Australia’s economic reality complicates a complete pivot away from China. Key questions revolve around whether Australian policymakers will adopt a more strategic industry development approach and how Washington’s policies will influence these decisions. Australia’s aspirations to move up the value chain in critical minerals face hurdles, including Chinese dumping practices and restrictions on technology sharing.
The security domain also presents challenges, particularly in the context of AUKUS. While Australia’s participation in the trilateral security pact has not derailed relations with China, Beijing’s concerns are growing. China perceives the pact’s emphasis on nuclear-powered submarines and advanced technology cooperation as a threat to regional stability. Chinese state media has criticized AUKUS as part of a broader strategy to “NATO-ize” the Asia-Pacific, increasing tensions in an already volatile region. Trump’s potential “America First” approach could further complicate matters, potentially altering the terms of technology transfers and exacerbating Australia’s exposure to U.S.-China rivalry.
Tensions in the South China Sea remain another flashpoint. Aggressive actions by China’s coast guard in 2024, including confrontations with Philippine vessels, highlight the escalating risks. Australia’s expanded military cooperation with the Philippines raises the likelihood of entanglement in regional conflicts. The Trump administration’s approach to addressing Chinese aggression could significantly impact Australia’s involvement, particularly if the U.S. opts for direct intervention.
Other significant issues also loom large. Declining research collaboration with China, cyber threats, espionage, and competition for influence in the South Pacific add layers of complexity. Canberra’s role in navigating China and Taiwan’s accession bids to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will also test its diplomatic acumen. Moreover, the perennial risk of conflict in the Taiwan Strait remains a critical concern.
As 2025 unfolds, it is evident that the Australia-China relationship demands cautious management. Balancing security alliances, economic interdependence, and regional stability will require nuanced strategies. With global and domestic dynamics in flux, Canberra must remain vigilant in navigating this intricate relationship.
