Australia in China's Crosshairs
Beijing is targeting Canberra (and its relationship with Washington)
The rapidly escalating US China War is disrupting many economic, military, and geopolitical relationships. The cross currents of the conflict are creating a complicated cocktail in which the economic interests of nations are increasingly taking a back seat to military and political considerations. Nowhere in the world is this development more obvious than in Australia.
Canberra is one of Washington’s closest allies and has been a steadfast partner on military and geopolitical matters. In fact, “Australian and American soldiers, sailors, marines, airmen and women have served alongside one another in every major conflict” since World War I, something that is often noted by leaders in both Washington and Canberra. Australia is also a member of the Five Eyes, an intelligence sharing pact formed following World War II that includes the United States, the United Kingdom, Canada, Australia, and New Zealand.
In addition, a mere 11 miles from Alice Springs in the Northern Territories (close to the geographic center of the Australian continent) lies Pine Gap, a joint Australian-America surveillance base created more than 50 years ago that collects signals intelligence, provides early warning information on ballistic missile launches, gathers and disseminates battlefield intelligence, and served as the inspiration for the eponymous international political thriller on Netflix.
And in 2021, Canberra, London, and Washington formed AUKUS (Australia-United Kingdom-United States), a defense collaboration with two main efforts: "The first initiative under AUKUS is a commitment to support Australia in acquiring nuclear-powered submarines for the Royal Australian Navy. The second initiative intends to enhance joint capabilities and interoperability, focusing on cyber capabilities, artificial intelligence, quantum technologies and additional undersea capabilities.” Given the sensitive technologies involved, AUKUS is further evidence of the strength of the Canberra-Washington relationship.
For decades, Australia has also benefited economically alongside the rise of China, as the Middle Kingdom voraciously consumed billions of dollars worth of commodities. In fact, China remains Australia’s largest trading partner today, importing iron ore and coal as well as precious metals and agricultural products. But it’s not just commodities that China is buying. The country has also been aggressively purchasing Australian assets.
A 2022 review of Chinese activity in Australia provided a concise summary: “Between 2007 and 2021, China's state-owned enterprises and private companies poured a total of $158 billion into Australia.” Chinese companies have purchased mines, electricity generation assets, the rights to operate major ports such as Darwin and Newcastle, agricultural land, dairy processors, and even the rights to water. According to Government reports, China now owns 2.3% of Australia’s farmland and about 1.5% of Australian water entitlements.
For years, the global community has encouraged such economic entanglement with China, theorizing that a more prosperous Beijing would politically drift towards democracy and become a responsible member of the rules-based international world order. The opposite has transpired, as China has hijacked multilateral institutions, consistently violated human rights expectations, failed to protect property rights, and used economic coercion to compel political compliance.
Australia is now squarely in China’s crosshairs.
Consider Beijing’s reaction to Canberra’s 2020 request for an independent inquiry into the origins of COVID19, an investigation that would have threatened China’s narrative of the outbreak and its source. China exercised their enormous economic leverage over Australia to impose a A$24bn (equivalent to 5.5% of exports) hit to Australia’s economy by massively slowing imports of barley, wine, timber, coal, and even lobsters. But as The Economist eloquently described in 2023, Australia “did not succumb. And like a surfer surviving a shark attack with no more than a lightly gnawed board, Australia is now emerging from three years of Chinese bullying in remarkably good shape.”
Actually, China has had its crosshairs focused on Australia for a while. Specifically, it has been targeting the country since August 2004 when CCP secretary Hu Jintao declared that Australia was part of China’s “overall periphery.” Given Beijing’s long term security concerns about its periphery, this designation spurred a ton of effort. Vice Minister of Foreign Affairs Zhou Wenzhong visited Australia shortly thereafter and convened a meeting of senior PRC officials working and high level ministry staff. The inclusion of Australia, it was argued, was essential to develop a reliable supply source of inputs needed to power China’s economic development over the next twenty years. The longer term goal was to drive a wedge between the United States and Australia. By 2005, Beijing had begun what Clive Hamilton later referred to as “a systematic campaign to infiltrate, influence and control the most important institutions in Australia.”
How do we know this? Because Chen Yonglin, who at the time was First Secretary for Political Affairs at the PRC Consulate in Sydney, was at that meeting and shortly thereafter sought political asylum in Australia. He summarized his thoughts in a 2016 piece entitled “Australia as China’s Backyard.” In it, he describes the four primary reasons that China has targeted Australia: (1) it was the nearest major Western democratic ally with a relatively weak national power, (2) Australia had a sizable population of Chinese migrants, nationals, immigrants and others who had been ideologically exposed to CCP thinking and might be easily coerced, (3) it had multicultural policies that would allow for infiltration under the guise of cultural engagement, and (4) there was no “foreign agent registration act” that might impact trip up Chinese influence operations.
Chen’s article notes that Australia was perhaps “the earliest experimental base for the Chinese Communists in expanding their soft power abroad.” By at least one measure, the efforts have been working: only 42% of Australians polled in 2023 said they would support “sending Australian military personnel to Taiwan to help defend it from China.”
To better understand the breadth and depth of Chinese efforts in Australia, I highly recommend Clive Hamilton’s book Silent Invasion: China’s Influence in Australia. The book was published in 2018 and ended with Hamilton calling for his country’s leaders to effectively open their eyes and rethink what was happening:
There is a widespread view that China’s rise is unstoppable, that our economy’s fate is in Beijing’s hands, and that China’s size means it must dominate Asia. So it’s best if we go along with this historical inevitability, because we don't really have any choice, and it won’t be such a bad thing anyway. So we pursue ‘friendship and cooperation,’ accept the flood of money, sell our assets, jump when China’s diplomats shout, look the other way when our technology is funneled offshore, recruit Beijing’s agents into our political system, stay silent on human rights abuses, and sacrifice basic values like free and open inquiry in our universities….Has there every been a greater betrayal by our elites?
Within a couple of years of the book’s publication, Professor Hamilton’s views were becoming more common. In a 2019 paper titled “The future of the US-Australia Alliance in an Era of Great Power Competition” published by the United States Study Center, Dr. Charles Edel and Dr. John Lee note China’s ultimate objective is the establishment of a Sino-centric Indo-Pacific. They further highlight that Beijing is pursuing this goal by “diluting the credibility, effectiveness, and relevance of US alliances in Asia, while simultaneously undercutting the will of Washington’s regional allies to accept the risks and costs associated with countering growing Chinese power.”
A more pressing issue, however, may be China’s rapidly slowing economy. China’s youth are increasingly disillusioned with their future prospects, there are almost 35 million more males than females, and frustration with the Chinese Communist Party has been rising since the COVID lockdowns. The pressures building on Beijing are enormous. Might the situation spur the CCP to accelerate its plans to militarily “reintegrate” Taiwan as it seeks to divert attention away from domestic economic malaise? Should this happen, I suspect it would lead to greater US-Australia cooperation and a stronger alliance. Just like the global approach to politically reform China via economic inclusion, China’s strategy of putting a wedge between the United States and Australia seems to have backfired. The mateship would likely emerge stronger.
While the AUKUS agreement and Australia’s resilience in the face of Chinese economic coercion provide evidence of a strong US-Australia alliance, China’s recent activity on the Solomon Islands has raised eyebrows, specifically its establishment of a comprehensive strategic partnership. The history here is relevant. During WWII, the battle for Guadalcanal, the largest of the Solomon Islands, was a major turning point where Allied forces stopped Japanese expansionism. The islands are among the most strategic in the Indo-Pacific region, which is why China de facto controlling them is so concerning. They are also close to Australia.
Surprise and deception are deeply embedded elements of Chinese military philosophy. Recall the 36 Stratagems. Strategy #6 (Shēng dōng jī xī) is loosely translated as “Make a sound in the East, then strike in the West” and is about attacking where least expected.
Is it possible that China is making a sound in Taiwan but planning to strike elsewhere? Might Beijing be more interested in securing needed raw materials than reunifying with Taiwan? Could Australia actually be China’s target? As previously noted, the country has a large population of ethnic Chinese, ports that are managed by Chinese companies, and many of the energy and agriculture resources needed to fuel Chinese expansionism. Has China’s “silent invasion” of Australia over the past fifteen years laid the groundwork for more visible action?
While it’s impossible to know Beijing’s intentions or plans, it would be imprudent to only focus where they’ve directed our attention. As the noise around Taiwan gets louder, it’s worth looking Down Under to see where China may possibly strike.
About Vikram Mansharamani
Dr. Mansharamani is a global generalist who tries to look beyond the short term view that tends to dominate today’s agenda. He spends his time speaking with leaders in business, government, academia, and journalism…and prides himself on voraciously consuming a wide variety of books, magazines, articles, TV shows, and podcasts. LinkedIn twice listed him as their #1 Top Voice for Global Economics and Worthprofiled him on their list of the 100 Most Powerful People in Global Finance. He has taught at Yale and Harvard and has a PhD and two masters degrees from MIT. He is also the author of THINK FOR YOURSELF: Restoring Common Sense in an Age of Experts and Artificial Intelligence as well as BOOMBUSTOLOGY: Spotting Financial Bubbles Before They Burst. Follow him on Twitter or LinkedIn.