Dutton walks more softly on China, with election in mind

When Peter Dutton was asked this week  whether a Coalition government would continue  to foster trade relations with China, he declared unequivocally that “the relationship with China will be much stronger  than it is under the Albanese government”.

Two points stood out: Dutton’s own positive rhetoric, and his apparent confidence about the future of Australia-China relations.

It’s not unusual for opposition leaders to undertake a makeover, to their person or policy, as an election approaches. Anthony Albanese lost weight and acquired new glasses. Earlier, he’d made Labor a small policy target.

Dutton is simultaneously attempting a softening on some fronts – while retaining the “hard man” image on others.

Mid-last year Dutton said: “I’m pro-China and the relationship that we have with them. I want that trading relationship to increase. […] We need to make sure we strengthen the trading relationship because there are many businesses here who rely on it. But we have to be realistic about working to keep peace […] we live in a very uncertain time. The Prime Minister also says that we live in the most precarious period since the Second World War, and he’s right, and we need to work hard at peace as well.”

Contrast Dutton as defence minister in 2021. “Does the Chinese government wish to occupy other countries? Not in my judgement. But they do see us as tributary states. And that surrender of sovereignty and abandonment of any adherence to the international rule of law is what our country has fought against since Federation.”

It’s not that Dutton has changed his views on China. Rather, he’s camouflaged them with a softer tone, and in what he chooses to emphasise. Of course circumstances have changed – Australia now has a much better relationship with China. But significantly, Dutton needs to appeal to the local Chinese-Australian voters.

At the 2022 election, the Liberals took a big hit among voters of Chinese heritage.

The party’s review of its election performance, undertaken by former party director Brian Loughnane and frontbencher Jane Hume, said: “In the top 15 seats by Chinese ancestry the swing against the Party (on a 2PP basis) was 6.6%, compared to 3.7% in other seats. There are more than 1.2 million people of Chinese heritage living in Australia today. Rebuilding the Party’s relationship with the Chinese community must be a priority during this term of Parliament.”

Marginal Labor seats that are targets for the Liberals, where the Chinese vote is significant, include Reid and Bennelong in NSW and Chisholm and Aston in Victoria.

Dutton (and the PM) will attend a Lunar New Year celebration in Box Hill in Melbourne this weekend.

It’s notable that David Coleman, named by Dutton last weekend as the opposition’s new spokesman on foreign affairs, has worked extensively with the Chinese community. One of the contenders for the post was the high-performing James Paterson. There may have been stronger arguments for keeping Paterson in home affairs, but his very hawkish stand on China might have been in the mix.

Talking up the positive side of the Coalition’s record on China, Dutton harked back to the signing of the free trade agreement under the Abbott government, and said “we want there to be mutual respect in the relationship”.

Over its years in government the Coalition’s relationship with China has varied between pragmatic friendship and suspicious negativity. After relatively smooth sailing in the Abbott period, things soured when the Turnbull government called China out over foreign interference, introducing legislation, and banned Huawei from the 5G network. Then relations plunged dramatically when the Morrison government demanded an inquiry into the origins and handling of the outbreak of COVID in Wuhan.

Despite Dutton’s confidence, it’s more than possible that managing the China relationship after the election could be trickier than it has been during this one, no matter who is in power.

The Albanese government can claim the greatly-improved bilateral relationship as one of its major foreign policy achievements. China has brought Australia out of the deep freeze, lifting the $20 billion worth of trade barriers it had imposed. Dialogue and ministerial exchanges have resumed. Anthony Albanese has been welcomed in China.

But this week’s speculation relating to the new Chinese artificial intelligence platform DeepSeek is just the latest reminder of perennial security suspicions about the penetration of Chinese technology.(Incidentally, Dutton has an account on the Chinese-owned TikTok – despite it being banned from official government devices – in part to engage with the local Chinese community, as well as with younger people generally.)

Australia’s minerals industry is potentially vulnerable to Chinese displeasure. The Senate in the next fortnight will consider the government’s Future Made in Australia legislation, that provides a tax incentive for processing critical minerals. The Chinese have a global stranglehold on this processing – and have shown a willingness to weaponise it, for example against Japan. China’s multi-billion dollar funding of nickel processing in Indonesia has had a dire impact on producers here in Australia.

The change of government in Australia certainly facilitated the improvement in the bilateral relationship, but that improvement was also strongly driven by China’s own interests. Similarly, the future of the relationship is more in China’s hands than in Australia’s.

China expert Richard McGregor, from the Lowy Institute, says:“ Relations with China are inherently volatile.

"The day-by-day relationships have returned to  a degree of normality. But all of the structural stresses which created antagonism are still there.”

These include China’s “military assertiveness in the region, competition between  the US and China, Australia’s concern about foreign interference and hacking, China’s efforts to build their power in the Pacific at the expense of Australia. None of that has gone away,” McGregor says. The single biggest change of recent years “is that "China has become much more powerful and is far more willing to throw its weight around”.

Separate to any hiccups in the bilateral relationship, Australia could find itself caught in the crossfire if there is a serious deterioration in the US-China relationship under Donald Trump – notably if his tariff policy leads to a trade war. Simon Jackman, from the University of Sydney, warns that if US policy hit the (already struggling) Chinese economy, that would affect Australian exporters.

“US tariffs or import bans that slowed China’s economy would cause some short to medium headaches for Australian exporters,” Jackman says. “As in Trump Mark 1 and COVID, Australian export industries would find themselves looking for opportunities elsewhere, if global supply chains had to re-equilibrate in response to an upheaval in the US-China trade relationship.”

Ironically, the earlier search for diversified markets when the Chinese imposed their restrictions on Australian producers would have helped prepare exporters for such a contingency.