In a recent speech at the University of Adelaide's Confucius Institute, Department of Foreign Affairs and Trade Secretary Frances Adamson tackled the controversial issue of Chinese students in Australia. Her comments were both shrewd and part of a larger pattern of Australian government policy signalling toward Beijing, in which Canberra is showing a more vocal defence of the country's liberal values and of its preferred international order.
But in the question and answer session with Adamson, a rather more muddled aspect of Australia's China policy reared its head. In response to a question about China's 'Belt and Road Initiative' (BRI), the Secretary's comments revealed the scepticism that exists in Canberra about the initiative and the lack of strategic thinking about just how to respond to what is the most important international gambit of Xi Jinping's presidency.
While the coverage of Adamson's BRI remarks was not as widespread as her comments about students, they nonetheless prompted some commentary in traditional and social media. Reactions ranged from support for Australian caution to calls for Australia to sign an memorandum of understanding (MOU) and seize the opportunity to strengthen strategic and economics ties by joining BRI.
Australia's response to BRI remains surprisingly unclear. Given the importance of BRI to Beijing, the significance of the bilateral relationship with China and the obvious economic opportunities BRI represents, why is the Australian government unable to work out either a larger strategic engagement with the program or even a reasonable set of speaking points that act as a convincing interim holding measure?
One problem is that BRI is still a work in progress. Announced in two speeches in 2013, it initially had a nebulous and aspirational quality. Existing programs, such as the Khorgos inland port, were retrofitted as BRI-affiliated, while new projects were bolted on as the initial ideas solidified into a massive program. It now has at least four broad aims: to build connectivity; develop China's hinterlands; export surplus capital and capacity; and increase Chinese strategic influence. Indeed, the Chinese government insists that the program is not limited to the already vast purview of Eurasia – any country in the world can take part.
Given this, some reticence is not entirely unreasonable. And yet more than 60 countries have signed MOUs (some very specific, while others quite open), while Australia's diplomatic signalling remains indecisive and beset with suspicion. Trade Minister Steve Ciobo, not exactly a cabinet heavyweight, was dispatched at short notice to play a minor role in the Belt and Road Forum, and recent reports indicate that Australia and China are establishing a working group to figure out how Australia can participate.
Australia's response to BRI seems to mirror the earlier uncertainty about the Asian Infrastructure and Investment Bank (AIIB). As former Australian Ambassador to Beijing Geoff Raby has said, Australia is 'again, as with the AIIB, having the worst of all worlds – neither in with influence, nor out with our principles.' And this gets at the deeper issue – Australian policy toward China seems stuck in in the confines of the Howard government's compartmentalised approach. Having been chastened by his response to the Taiwan Straits crisis, Howard devised an approach in which Australia would focus on shared interests and would bracket out or compartmentalise issues over which Australia and China had differences, such as human rights, democratisation and strategic policy. Rather than confronting vexed issues, the two would work collaboratively on areas of common interest and not publicly disagree about other matters.
What began as a sensible attempt to keep the two facets of Australian policy on separate tracks has, over time, badly limited Australian policy thinking. If a policy issue neatly fits in one of the tracks the government knows what to do, but if it is an issue that cuts across the political, strategic and the economic, then the play sheet that has driven China policy is of little use. This is a key reason for the current uncertainty over BRI.
Notwithstanding its sprawling qualities, BRI is the most important policy development in China and will be the most important element of China's international policy in Xi's second term. At once it represents economic opportunity, economic risk, strategic challenges and security risks. Australia need not leap into an MOU, although as any Australian university will tell you, MOUs can be entirely obligation-free. But it does need to work out where it stands in relation to the initiative's different dimensions and find ways to manage the risks, maximise the opportunities and continue to build a strong and effective relationship with Beijing.
BRI represents the kind of complex issues that will increasingly define the Australia-China relationship. Trying to bracket off the hard political issues from the easy economic ones will no longer work. It's time to develop a much more nuanced approach to managing one of Australia's most important relationships.