Albanese and Xi ignored one name. It still loomed large

Sydney Morning Herald

18-07-2025

Donald Trump's name wasn't mentioned by Anthony Albanese or Xi Jinping during the prime minister's tour of China this week. Not that they needed to. The noise emanating from Washington is echoing in capitals everywhere.
Few countries are in a position to benefit as decisively from the shifting global order as China, where the president is duchessing world leaders while Donald Trump creates friction with even the United States' close allies including Australia and Japan.
Albanese's visit, which concluded on Friday, was the culmination of Labor's 'stabilisation' policy on China that came after a period of frostiness under the Morrison government.
A renewed tone of cautious friendliness was bolted back on to the relationship with Australia's biggest trading partner. Analysts say Albanese's posture towards China and his recent emphasis on independence within the US alliance mark a new phase of Australian diplomacy. Call it stabilisation plus.
The Australian delegation moved from east to west over six days. Albanese spruiked the emerging green steel sector that could aid Australia's key iron ore exports in years to come. In Beijing, a rare lunch banquet with Xi followed more formal bilateral talks with the authoritarian leader shaping China in his image. On the same evening, dinner with Premier Li Qiang. Later in the week, symbolic images of the prime minister on the Great Wall and admiring pandas in western China. In both cases Albanese was retracing the steps of Labor icons Gough Whitlam and Bob Hawke, who forged unique bonds with Chinese leaders in their time.
Xi has signalled he senses huge opportunity in Trump's treatment of world leaders and has been inviting them to Beijing. But he 'doesn't invite many of them to lunch', notes Lowy Institute senior fellow Richard McGregor.
Albanese's camp believes the week exceeded expectations. Day one was somewhat overshadowed by the prospect of the Pentagon using the AUKUS submarine pact to tie Australia into any potential conflict over Taiwan. And back home the federal opposition criticised a lack of major tangible deals or assurances from China not to repeat the provocative live-fire drills its navy ships conducted off the coast of Australia in February.
But a series of memorandums of understanding on trade and tourism, plus the unexpectedly warm welcome at the Great Hall – where Albanese was treated to roast duck and Chinese covers of his pub rock favourites from Midnight Oil and Paul Kelly – left the prime minister upbeat.
On a drive from Chengdu airport on Wednesday (on a 38-degree afternoon that the weather service said felt closer to 48 in the humidity), Albanese was in awe of the nightlife-loving western Chinese city described by some expats as 'China's answer to Melbourne'.
'China sees itself as confident,' Albanese said in Chengdu on Thursday. 'It struck me that there was more innovative architecture than any city I have been to around the world. New, dynamic, creative.'
An Australian official involved in planning the trip, who did not want to be identified, said the Chinese government's friendlier tone towards Australia was invaluable for businesses who had found it harder to gain a foothold in China recently.
The thaw in relations has allowed trade to resume in areas such as beef and barley, which were hit by Chinese trade strikes under the previous Coalition government, but Labor hopes two-way trade can bounce back further. 'The upside is huge and the signal that's been sent to the Chinese system, which flows on to consumers and business, is tangible,' the official said.
As an example, Australia's world-class med-tech firms, such as Cochlear and ReMed, have identified areas for vast growth by tapping into the Chinese middle class as it becomes more health-conscious.
Both have operations in Chengdu, which has the largest general hospital in the world. For Cochlear, the hearing device company, an estimated 10 million customers are up for grabs. Approximately 170 million Chinese suffer from sleep apnoea, which ResMed helps treat.
But growth is not what is once was in China. Eight per cent yearly GDP surges have given way to growth of less than 5 per cent, according to estimates compiled by Reuters. With a population the size of China's, that still means millions each year gaining new tastes for overseas exports, albeit from average incomes still lower than the West.
Albanese's visit shone a spotlight on the duality of China, however. Walking through the country's neon-lit and EV-filled cities, systems of restriction and surveillance were pervasive. CCTV cameras abounded: one man in Beijing could be seen using a remote-controlled camera that wheeled around like a toy pet. Watchful security officials, both in uniform and plain-clothed, were ever-present. Reporters travelling with Albanese were patted down upon entry into most buildings, including hotels.
McGregor, the Lowy Institute China expert, said if Albanese gave the appearance that he was favouring Beijing over Washington (he is yet to visit to meet Trump in either man's current term) he would leave the government open to criticism.
The question of how to strike a balance between Washington and Beijing dominated reporters' queries to Albanese during his visit.
Former home affairs secretary and China hawk Mike Pezzullo said Albanese was trying to rekindle the glory days of the bilateral relationship with China 'when Australian leaders would stroll along the Bund in Shanghai and marvel at the skyline while dreaming of endless prosperity'.
'On the other [hand], back at home we saw the start of the largest peacetime military exercise with the United States [the Talisman Sabre war game], which is aimed at honing our approach to fighting a war against China.'
Pezzullo, who was sacked from his role at Home Affairs in 2023 for breaching the code of conduct after this masthead reported text messages in which he lobbied for a conservative to be his minister, said there was a deep tension at the heart of Australia's relationship with China.
'This contradiction at the heart of Australian policy can only be sustained for so long as great power competition does not escalate to conflict,' Pezzullo, who remains influential in national security circles, said.
'We have therefore made ourselves hostage to either the great power peace being maintained, or a great power war dragging us into an abyss for which we will be unprepared.'
Albanese is not the first Australian leader to be accused of being entranced on a trip to China. Liberal prime minister Malcolm Fraser was called out by some conservatives when he visited the Great Wall in the 1976 while Whitlam was attacked for front-running the US on calling for recognition of Chairman Mao's People's Republic.
Long-time foreign policy watcher James Curran of the University of Sydney said a new Australian foreign policy strategy was emerging in which Australia spoke in frank terms to both the US and China. 'The PM is now talking about developing the relationship so that it is a subtle departure from the tight formulas of his first term, and he said clearly he won't allow the differences to define the relationship,' Curran said. 'He wants to ringfence the points of tension while growing the trade ties.'
James Laurenceson, a more dovish expert who runs the Australia-China Relations Institute, said that between Trump's tariffs and the emergence of views within the Pentagon that Australia should commit to back the US in war over Taiwan just as Albanese was heading to China, Australia might need to treat US diplomatic tactics with similar suspicion to China's.
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McGregor, meanwhile, said countries like Australia and Japan were considering closer ties with Beijing in part to show Washington that they had other options aside from the US.
'Both dislike Trump but still strongly support the US alliance, according to opinion polling. No one wants a divorce from America, which is essential to regional stability. Neither country trusts China.
'But Trump is forcing everyone to think the once unthinkable.'