This paper focuses on the recent developments in Australia-China relations, particularly within the context of the Asia-Pacific region. It analyzes the economic, trade, and diplomatic dimensions of the bilateral relationship, with special attention to Australian Prime Minister Anthony Albanese’s visits to China in 2023 and 2025. Through a comprehensive review of these events, the paper explores the prospects and challenges for the further development of Australia-China relations and their implications for the economic and diplomatic landscape in the Asia-Pacific and Oceania regions. Australia and China, as two pivotal nations in the Asia-Pacific, wield significant influence over regional and global economic and diplomatic dynamics. In recent years, particularly since Australia’s 2022 government transition, bilateral relations have witnessed positive shifts. Prime Minister Anthony Albanese’s visits to China have emerged as critical catalysts for advancing ties, drawing widespread international attention. These developments reflect a broader recalibration of Australia’s foreign policy and China’s willingness to engage constructively with key regional partners, underscoring the importance of their relationship in an era of global uncertainty. The significance of Australia-China relations extends beyond bilateral interests. As major economies with complementary strengths—Australia as a resource and agricultural exporter, China as a manufacturing and consumer powerhouse—their cooperation directly impacts supply chains, energy security, and economic stability across the Asia-Pacific. Diplomatically, their engagement sets precedents for regional conflict resolution, multilateralism, and responses to transnational challenges such as climate change and pandemics. Thus, understanding the trajectory of their relationship is essential for grasping the future of the region.

The diplomatic ties between Australia and China, established in 1972, have evolved through phases of cooperation and tension. In the decades following normalization, bilateral relations flourished: trade expanded exponentially, educational exchanges grew (with China becoming Australia’s largest source of international students), and cultural links deepened through sister-city partnerships and tourism. By the early 2010s, China had solidified its position as Australia’s top trading partner, a status it has retained for 16 consecutive years.

However, the 2010s marked a period of strain, exacerbated during Scott Morrison’s premiership (2018–2022). Geopolitical frictions, including Australia’s alignment with U.S. strategic priorities in the Indo-Pacific, disputes over Huawei’s 5G participation, and allegations of Chinese interference in Australian politics, led to a downturn. The Morrison government’s decisions—such as calling for an independent inquiry into the origins of COVID-19 (seen by China as politically motivated)—further strained ties, resulting in Chinese tariffs on Australian goods like barley, wine, and coal, and a freeze on high-level dialogue.

This period of tension highlighted the vulnerability of bilateral relations to external pressures and domestic politics. It also underscored the costs of strained ties: Australian exporters lost market share, while Chinese students and tourists, once a cornerstone of people-to-people exchange, faced obstacles. The 2022 Australian federal election, which brought Albanese’s Labor government to power, marked a turning point, with the new administration signaling a commitment to “stabilizing” relations through pragmatic engagement.

Despite past disruptions, economic complementarity remains the bedrock of Australia-China relations. In 2024, bilateral trade reached nearly 312 billion Australian dollars, accounting for one-third of Australia’s total trade. Australia’s exports to China are dominated by resources and agriculture: iron ore (60% of China’s imports), coal, natural gas, beef, and wine. China, in turn, exports electronics (smartphones, laptops), machinery, and consumer goods to Australia.

This interdependence is mutually beneficial. For Australia, China’s demand for resources drives economic growth and employment in mining and agriculture. For China, Australian iron ore fuels its steel industry, critical for infrastructure and manufacturing. However, China’s green transition poses challenges: as it reduces carbon emissions in steel production, demand for “green iron ore” (produced with lower emissions) is rising. Australian miners, such as BHP and Rio Tinto, are investing in low-carbon technologies to retain market share, signaling a shift toward sustainable cooperation.

Bilateral investment is also rebounding. A 2024 survey by the China-Australia Chamber of Commerce found 70% of Australian firms in China rank it among their top three global investment markets. Sectors like renewable energy, healthcare, and digital technology are attracting growing interest. For example, Australian solar energy firms are partnering with Chinese counterparts to develop projects in both countries, leveraging Australia’s solar resources and China’s manufacturing expertise.

Albanese’s 2025 visit underscored this trend: a 14-member business delegation, including executives from BHP and Rio Tinto, held talks with Chinese steel giants Baowu and Ansteel, agreeing to explore green iron ore supply chains. Such collaborations reflect a recognition that long-term economic ties depend on aligning with global trends like decarbonization.

Albanese’s visits to China—first in 2023 (the first by an Australian prime minister in seven years) and again in 2025—have been pivotal. The 2023 trip focused on stabilizing relations, with agreements to resume ministerial dialogues and ease trade restrictions. The 2025 visit, longer in duration and spanning Beijing, Shanghai, and Chengdu, deepened engagement: the two sides signed memoranda on climate cooperation, agricultural quarantine, and educational exchanges. A joint statement emphasized “mutual respect, equality, and win-win cooperation” as guiding principles.

These visits signaled a return to pragmatic diplomacy. For example, China lifted tariffs on Australian barley and wine in 2024, while Australia eased restrictions on Chinese investment in critical minerals. Such steps, coupled with regular high-level communication, have rebuilt trust and created a framework for addressing disputes.

Both nations have reaffirmed their commitment to multilateralism, a departure from the unilateralist trends of the 2010s. They collaborate in forums like the UN, WTO, G20, and APEC, advocating for free trade and coordinated responses to global challenges. In APEC, Australia and China have jointly pushed for digital trade liberalization and pandemic preparedness. At the 2023 G20 summit, they co-sponsored a resolution on debt relief for low-income countries, reflecting shared interests in global economic stability.

This multilateral engagement is strategic: as the U.S. and Europe turn toward protectionism, Australia and China recognize that regional prosperity depends on open, rules-based systems. For Australia, partnering with China in multilateral forums balances its alliance with the U.S., while China gains a regional ally in promoting its vision of globalization.

Australia-China cooperation drives growth across the Asia-Pacific. China’s imports of Australian resources stabilize regional supply chains: for example, Australian coal and LNG ensure energy security for China, which in turn supplies manufactured goods to smaller economies like Vietnam and Malaysia. Australian investment in Chinese renewable energy projects, such as wind farms, also supports China’s green transition, reducing regional carbon emissions.

In Oceania, their partnership has tangible impacts. Chinese infrastructure investment in Pacific nations (e.g., ports, roads) often relies on Australian raw materials, creating a regional economic ecosystem. For instance, Australian iron ore used in Chinese steel may end up in bridges in Papua New Guinea, linking local economies to global markets.

Improved Australia-China relations set a precedent for regional integration. Their agreements on customs harmonization and agricultural quarantine (e.g., streamlined inspections for Australian beef) reduce bureaucratic barriers, benefiting other nations. For example, RCEP members like Thailand and Indonesia can leverage Australia-China trade routes to access new markets, boosting intra-regional trade.

Investment flows between Australia and China also spill over into the region. Australian pension funds, which invest heavily in Chinese tech firms, indirectly support innovation in Southeast Asia, while Chinese venture capital in Australian biotech startups fosters medical advancements that benefit Pacific nations.

A cooperative Australia-China relationship mitigates geopolitical tensions in the Asia-Pacific. In the South China Sea, for example, Australia’s constructive engagement with China—rather than confrontational rhetoric—encourages dialogue between claimant states. Similarly, their joint support for the ASEAN-led Regional Comprehensive Economic Partnership (RCEP) strengthens ASEAN centrality, a key pillar of regional stability.

In Oceania, where China’s growing influence has sparked concerns among some nations, Australia’s role as a trusted partner to both China and Pacific island states helps balance interests. For instance, Australia and China have collaborated on disaster relief in Fiji, demonstrating that great-power engagement can prioritize local needs over strategic competition.

Australia and China’s joint advocacy for reform of global institutions amplifies the Asia-Pacific’s voice. At the WTO, they have pushed for rules to address digital trade and subsidies, reflecting the region’s economic priorities. In climate negotiations, their pledge to phase out coal financing (announced at COP27) has pressured other nations to strengthen commitments, advancing regional climate goals.

Their cooperation also counters the “Indo-Pacific” vs. “Asia-Pacific” divide, promoting a unified regional identity. By working together in forums like the East Asia Summit, they foster inclusive diplomacy, ensuring smaller nations have a seat at the table.

Domestic politics in Australia remain a hurdle. The “China threat theory” persists in some political circles, with opposition parties criticizing Albanese’s engagement as “soft on China.” For example, his 2025 agreement on green iron ore faced backlash from MPs who claimed it “compromised national security.” Such debates create policy uncertainty, delaying projects like joint AI research initiatives.

Public opinion is also divided: while Australian businesses support closer ties, surveys show 40% of citizens view China as a “security risk.” This split complicates long-term planning, as governments must balance economic interests with public perceptions.

U.S. influence in the Indo-Pacific complicates Australia-China relations. The AUKUS alliance (Australia, U.S., UK), focused on countering China, requires Australia to align with U.S. strategic goals, potentially straining ties. For example, U.S. pressure to restrict Chinese access to critical minerals could force Australia to choose between its alliance and economic interests.

The U.S.-China tech war also impacts bilateral relations. Australia’s bans on Chinese tech firms (e.g., TikTok) at the behest of the U.S. have drawn Chinese criticism, highlighting the difficulty of balancing sovereignty and alliance obligations.

Emerging sectors offer avenues for deeper engagement. In healthcare, Australian biotech firms and Chinese pharmaceutical companies are collaborating on mRNA vaccine research, building on Australia’s scientific expertise and China’s manufacturing scale. In AI, joint projects on climate modeling (e.g., predicting cyclones) leverage Australia’s data and China’s computing power, benefiting regional disaster response.

Green energy is another frontier. Australia’s vast solar resources and China’s leadership in renewable tech make them ideal partners for hydrogen production: Australian solar farms could generate green hydrogen, exported to China via dedicated pipelines, reducing reliance on fossil fuels.

RCEP’s implementation (2022) provides a framework for expanded cooperation. As members, Australia and China can reduce tariffs on goods like Australian seafood and Chinese electric vehicles, boosting trade. They can also coordinate on RCEP’s digital trade rules, setting standards for cross-border data flows that benefit the entire region.

The Asia-Pacific Economic Cooperation (APEC) forum, too, offers opportunities. Australia and China can lead efforts to liberalize services trade, supporting sectors like education and tourism—both critical for post-pandemic recovery in nations like Thailand and Fiji.

Australia-China relations have entered a phase of pragmatic engagement, driven by economic interdependence, high-level diplomacy, and shared regional interests. The positive momentum from Albanese’s visits and the resumption of cooperation in trade, investment, and multilateral forums lays a foundation for stability. However, challenges persist: domestic political divisions in Australia, U.S. geopolitical pressures, and lingering distrust require careful management.

The opportunities, though, are significant. New frontiers like green energy and digital technology offer pathways to deepen ties, while regional frameworks like RCEP provide institutional support. For the Asia-Pacific, a strong Australia-China relationship is essential for economic growth, stability, and collective action on global challenges.

Looking ahead, both nations must prioritize dialogue over division, focusing on mutual interests while respecting differences. By leveraging their complementary strengths and committing to multilateralism, Australia and China can write a new chapter of cooperation—one that benefits not just their citizens, but the entire Asia-Pacific region.

By Zhao Xi