RUBY:

From Schwartz Media, I’m Ruby Jones, this is 7am.

This year we’ve seen relations between Australia and China plummet. Tensions between the two countries - which have been bubbling over for months - reached a crescendo with a tweet referencing allegations of war crimes, which drew a furious response from the Prime Minister.

But the story of Australia’s increasing friction with China goes back much further than that.

Today, world editor for The Saturday Paper Jonathan Pearlman on how serious the current situation is, and whether there’s a solution to the scuffle.

**

RUBY:

Jonathan, when was the last time then that you recall things being cordial between Australia and China?

JONATHAN:

Well, it seems like a long time ago now, but I would go back to 2014 with the last time that Australia had a visit from a Chinese president.

Archival Tape -- Newsreader

“We begin with President Xi Jinping’s ongoing state visit to Australia…”

JONATHAN:

This was the visit by Xi Jinping, he'd been here for the G20 summit and then stayed on for the State Visit. He was here with his wife. They went across the country, including to Tasmania.

Archival Tape -- Newsreader

“Tasmania is looking forward to gearing up ties with China and boosting the tourism industry, as China is Tasmania’s largest trading partner...”

JONATHAN:

And during that visit, he and Tony Abbott celebrated the signing of a free trade deal, which had been a long time in the making.

Archival Tape -- Newsreader

“The two leaders declared they will lift bilateral ties to a comprehensive strategic partnership…”

JONATHAN:

This was the first of China's free trade deals with a major economy. It cut dairy tariffs, it cut some agricultural tariffs, it was really seen as an important agreement for Australia.

Archival Tape -- Tony Abbott

“With free trade negotiations concluded, and with a comprehensive strategic partnership established, this is a historic and memorable day.”

JONATHAN:

And Abbott said to Xi Jinping that no other Chinese leader had ever been anything like such a good friend to Australia.

Archival Tape -- Tony Abbott

“No Chinese president has ever known more about Australia than President Xi.”

JONATHAN:

A lot has changed since then. Scott Morrison is on track to become the first Australian Prime Minister not to visit China since the two countries established diplomatic ties in 1972. And that's because he hasn't been invited.

RUBY:

So - as you say diplomatic ties were established back in 1972. Can you tell me more about what Australia’s relationship with China was then?

JONATHAN:

Well, Australia's actually had very long relations with China going back to the early 1970s under Gough Whitlam.

Archival Tape -- Gough Whitlam

“The hopes of that region rest upon not only a better understanding with China, but a better understanding of China.”

JONATHAN:

This was really early days for a Western country to be opening up diplomatic ties with communist China.

Archival Tape -- Gough Whitlam

“China, Australia, and all the countries in our region will be the beneficiaries of a better mutual understanding.”

JONATHAN:

And the relationship continued, it grew slowly. And of course, China wasn't the economic powerhouse then that it is today. And then in the 90s, and particularly in the late 90s, early 2000s, the relationship really became overtaken by the trade dimension. China started to boom. It was desperate for Australian resources.

Archival Tape -- John Howard

“The opportunities for deepening the relationship are almost limitless…”

JONATHAN:

China overtook Japan as Australia's largest trading partner around 2008/2009, and the relationship really started to blossom on the basis of that two way trade relationship.

Archival Tape -- Newsreader

“China is Australia’s largest trading partner, largest export market, and largest source of imports. Bilateral trade peaked at about 140 billion US dollars…”

RUBY:

Mm ok so we’re now in a situation where China is our largest trading partner, but the Prime Minister of Australia has not been invited to visit, despite our longstanding diplomatic ties. When did the relationship begin to break down?

JONATHAN:

The really serious breakdown began in late 2017.

Archival Tape -- Newsreader

“ASIO says espionage and foreign interference against Australian interests is extensive, unrelenting, and increasingly sophisticated…”

JONATHAN:

At the time, Australia was becoming increasingly worried about Chinese foreign interference.

Archival Tape -- Secretary of Defence, Dennis Richardson

“It is no secret that China is very active in intelligence activities directed against us…”

JONATHAN:

There was the Sam Dastyari affair where a Labour MP took a pro-China position after accepting political donations from a Chinese donor.

Archival Tape -- Newsreader

“...by revelations a company with links to the Chinese government reimbursed a Labor frontbencher’s debt…”

JONATHAN:

And Australia then under Malcolm Turnbull introduced foreign interference legislation, which was aimed at Beijing. It was seen as aimed at Beijing. Despite the public denials of that, that was a major development. And China had been very angry about a series of decisions by Australia to block foreign investments in gas, in infrastructure and in agriculture. And then in 2018, Australia became the first country in the world to ban Huawei, the Chinese telecommunications firm, from participating in the rollout of the 5G network. So all those developments led to a serious breakdown in the relationship, but things have become a lot worse in the past year.

Archival Tape -- Marise Payne

“We have been clear and consistent in raising human rights concerns…”

JONATHAN:

Firstly, Australia has made statements about the mass detention by China of Uighurs...

Archival Tape -- Marise Payne

“...more remains to be done to address these. Including concerning reports of repressive measures enforced against Uighurs and other ethnic minorities in Xinxiang.”

JONATHAN:

...and also the treatment of protesters in Hong Kong and Hong Kong's new National Security Law.

Archival Tape -- Scott Morrison

“Let me say that our government, together with other governments around the world have been very consistent in expressing our concerns about the imposition of the National Security Law on Hong Kong…”

JONATHAN:

And then earlier this year, after the COVID-19 pandemic broke out, Australia made this call for an enquiry into the origins of the pandemic.

Archival Tape -- Scott Morrison

“Now it would seem entirely reasonable and sensible that the world would want to have an independent assessment of how this all occurred...”

JONATHAN:

And it was done in a fairly clumsy way and really seemed to point the finger at Beijing. So there were all these kind-of series of disputes that led to tensions, but I think it's also important to remember that there are more structural forces in play; that tensions are rising between Washington and Beijing. And Australia is a close ally of the US and Australia has responded by making a series of security moves.

So Scott Morrison made his first and only visit overseas during the pandemic to Japan to form a defence pact with Japan. And Australia has become part of the quad, this partnership with the US, Japan and India, which is growing. So China and Australia are sort of on opposite sides of the chessboard in Asia, and that's not helping the relationship either.

RUBY:

And so Jonathan, all of this has led up to the current moment of tension that we’re in. And right now - do you think that the relationship between Australia and China is genuinely at risk?

JONATHAN:

I do. I think that the relationship was already bad and it's now almost spiralling out of control. Josh Frydenberg has admitted that Chinese actions are damaging the Australian economy. There could be more economic punishments from China and the problems between these countries are structural.
They were also due to gripes and missteps and misunderstandings on the part of both countries which haven't helped. So it does seem right now that there's very little hope of any immediate or overarching repair.

RUBY:

We'll be back in a moment.

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RUBY:

Jonathan, we're talking about tensions in the relationship between Australia and China, which have recently come to the fore but have been growing for several years now, who has the most to lose here?

JONATHAN:

I think Australia. China is on track to become the biggest economy in the world. It is by far the largest buyer of Australian exports. It now accounts for...last year it accounted for 35 per cent of total purchases of Australian exports, which is really incredible. That is more than the next six countries combined, and that figure has been growing.

But what we've seen is that as the relationship has soured, China started to restrict purchases of some Australian exports.

Archival Tape -- Newsreader

“Australia’s often difficult relationship with our biggest trading partner is once again in the spotlight this morning, with Beijing making good on a threat to slap punitive tariffs of imports of Australian barley..”

JONATHAN:

And China has given different reasons for not letting these exports in or for imposing tariffs.

Archival Tape -- Newsreader

“The gloves are off in Australia’s trade dispute with China, with Beijing today slapping a huge tariff on our wine exports…”

JONATHAN:

It doesn't present them as punishments, partly because it's concerned about Australia taking action in response to that at the World Trade Organisation. China has also warned tourists and students to avoid visiting Australia, claiming they may be subject to racial discrimination. But there's also been diplomatic and political fallout. China has imposed a freeze on ministerial visits and contacts. There's been bars on visits by Australian MPs and some journalists.

We've seen Australian correspondents leave China so that the Australian media outlets don't have correspondents in China anymore. And some Australians in China have been detained or been given harsher sentences than they probably otherwise would. So there's been a lot of fallout from this serious breakdown of the relationship.

RUBY:

Okay and so do you think that the current strategy from the Australian government and from Scott Morrison, is going to work? It doesn’t really seem to be working so far.

JONATHAN:

Yeah, I doubt it. I mean, I'm not sure that much right now will really work. But definitely opinion in Australia is fiercely divided, including amongst MPs, but also commentators, analysts, experts. There are two really fiercely divided camps, and one thinks that China is making an example of Australia, that the government should strongly resist, and another that believes that what we are saying is China adjusting to its new position of power in the region and that Australia, too, is going to have to adjust.

It's going to have to learn to accommodate China's new position and become less confrontational. But either way, I think that the difficulties in this relationship are going to demand some very shrewd and clever diplomacy.

Archival Tape -- Newsreader

“Spokesperson for China’s foreign ministry Zhao Lijian posted this tweet, saying ‘shocked by the murder of Afghan civillians and prisoners by Australian soldiers…”

JONATHAN:

So, for instance, Morrison this week, rather than holding a press conference as soon as Zhao’s trolling tweet came out...

Archival Tape -- Scott Morrison

“The post made today, the repugnant post made today…”

JONATHAN:

...could have allowed a diplomat or a minister to respond.

Archival Tape -- Scott Morrison

“Of an image - a falsified image - of an Australian soldier threatening a young child with a knife…”

JONATHAN:

He didn't necessarily need to respond to this Chinese official’s tweet...

Archival Tape -- Scott Morrison

“It is deeply offensive to every Australian.”

JONATHAN:

...no matter how offensive it was.

Archival Tape -- Scott Morrison

“The Chinese government should be totally ashamed of this post”

JONATHAN:

But this, again, points to the fact that navigating this relationship is difficult. And I think missteps are going to continue. And the problem for Australia is that the consequences are becoming more serious and more costly.

RUBY:

And Jonathan, what do you think China's long term strategy is here? Because we're seeing this pattern play out where there's an inflammatory comment or a tweet and that provokes a response from the Australian government and then there are sanctions in response to that. Is this cycle beginning to repeat itself? And to what end, what is the larger plan in Beijing?

JONATHAN:

One problem is that it's very difficult to know China's overall plan. Xi Jinping does not give almost daily press conferences like the Australian Prime Minister and can be hard to read and sometimes deliberately hard to read. I would be wary of saying all of this as part of some grand master plan by China. I do think it's important to bear in mind that China, like Australia - and even though it's a one party state and it's led by the most powerful president since Mao - has different cogs, it has different forces at work.

But China under Xi is powerful and it's proud, it's increasingly willing to show its strength. It is, I think, angry at recent Australian government actions. It's not all that concerned about showing its fury, even in ways, as we've seen this week, that are really crass and quite unbecoming. So it's very hard to know what China's overall plan is, but the overall direction of this relationship suggests that we are going to see this cycle repeat itself.

RUBY:

Jonathan, thank you so much for your time today.

JONATHAN:

Thanks, Ruby.

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RUBY:

Also in the news today...

The first international flight to land in Melbourne since June touched down at Melbourne Airport on Monday with passengers sent to the state's revamped hotel quarantine program.

It comes as Victoria achieved 38 days in a row with no new Covid-19 cases.

And Donald Trump’s personal attorney, Rudy Giuliani, has tested positive for COVID-19. Giuliani’s diagnosis prompted Arizona to close its congressional assembly after he visited the state last week.

I’m Ruby Jones, this is 7am.