On Tuesday 2nd July, AIIA NSW welcomed Philipp Ivanov, CEO of the Asia Society Australia, to discuss China under President Xi Jinping and the Australia-China relationship. Mr Ivanov outlined the transformations of China’s political system and foreign policy that have occurred under Xi’s rule and tied these changes into the Australia-China context.

Mr Ivanov highlighted some of the policy shifts that have bolstered Xi’s internal rule and heightened China’s international standing. One of the key areas undergoing change in Xi’s China has been the political system. President Xi has sought to aggrandize power through institutional means, including through removing presidential term limits and expanding the use of small leadership groups, such as the Leading Small Group on Comprehensively Deepening Reform. Ideologically, Xi has offered his own guiding visions, namely the Chinese dream and the great rejuvenation. Both Xi’s centralization of power and goals for the nation has been pursued through a variety of political campaigns, including the anti-corruption drive, PLA reforms, and the resurgence of ideological education to the forefront of political life.

Internationally, President Xi’s approach is ambitious in vision and assertive in implementation. Mr Ivanov argued that the singular guiding principle that threads through all of China’s foreign policies is maintaining the CCP’s ruling position. Furthermore, the execution of its foreign policy goals represents China’s new-found globalism, as evidenced in the South China Sea, the Belt and Road Initiative (BRI), the Asian Infrastructure Investment Bank, the global projection of the PLA, and the exercise of soft power and public diplomacy overseas.

Mr Ivanov acknowledged that while Xi has constructed a global agenda proportionate to China’s perceived civilizational gravity, this agenda has pulled the US-China relationship into more competitive territory. Given structural contradictions in US and China views of a desirable world order, a comprehensive reconciling between the powers is unlikely. Mr Ivanov noted that the intertwinement of Australia-China relations is not the outcome of Australia free-riding on China’s economic gains, but the result of Australian political, business, education, and cultural leaders, building human connections and engagement with China.

In 2016, as Xi’s agenda began to materialize, tensions in the relationship started to surface. A non-benevolent impact was acutely felt from China in the security policy domain. The combination of the Australia-China relationship’s pressure points (found in the South China Sea, Huawei, and influence operations) has pushed the Australia-China relationship into negative territory. The Australian polity’s response to this new set of circumstances has resulted in a public debate on the nature of Australia’s relationship with China.

Mr Ivanov acknowledged that it has taken polarizing and misinformed turns yet stressed that an open debate is necessary. The major outcome of this discussion has been a shift in Australian public opinion on China. National sentiment has calcified from a wary cautiousness to distrust of the Chinese government, with foreign interference being a major pain point.

Looking ahead, Mr Ivanov proposed a four-point strategy of “bounded engagement.” Australia should pursue “full spectrum engagement” with China that is clear-eyed in acknowledging that areas of disagreement will constrain cooperation in select areas. This requires Australia to be able to manoeuvre flexibly within these narrow boundaries. To achieve this, Australia must be clearer in articulating what its interests and values are and
invest more at home to address deficiencies in its own relationship-management capabilities.  Key areas of attention include language education, engagement with the Australian-Chinese community, the number of Australian businesses operating in China, and academic research on China.

In response to questions, Mr Ivanov argued that Xi’s main policy approach to Hong Kong is a gradual erosion of democratic principles and a shift of financial power from the Special Administrative Region (SAR) to the mainland’s east coast. When asked what type of power China will be in the Pacific, Mr Ivanov responded that China will have a relatively lower military presence while having a stronger social, cultural, economic and people-to-people presence. Finally, Mr Ivanov placed energy security at the core of the BRI and pointed to numerous efforts by the CCP to make the Chinese economy less reliant on the global economy for energy security.

Report by Toby Warden

AIIA NSW intern