Peter Dutton walks more softly on China, with election in mind

This week, when asked if a Coalition government would continue to foster trade relations with China, Peter Dutton stated unequivocally that “the relationship with China will be stronger than it has been under the Albanese government.” This statement highlights two things: Dutton's own assertive rhetoric, and his apparent confidence in the future of the Australia-China relationship.

It's not unusual for opposition leaders to make changes to their persona or policies as an election draws closer. Anthony Albanese lost weight and got new glasses. Earlier, he made Labor a small-target policy. Dutton is also trying to soften his image in some areas while maintaining a “tough guy” persona in others.

In the middle of last year, Dutton said, “I support China and the relationship we have with them. I want to see trade relations increase… We need to make sure that we strengthen trade relationships because there are many businesses here that rely on it. But we need to be realistic about working to maintain peace… We live in a very uncertain time. The Prime Minister has said we live in the most unstable time since World War II, and he is right, and we also need to work to maintain peace.” This contrasts with Dutton’s comments in 2021 when he was Defence Minister: “Does the Chinese government want to take over other countries? In my judgement, no. But they do see us as a vassal state. And it is that abandonment of sovereignty and any adherence to international rule of law that our country has fought against since federation.”

This is not to say that Dutton has changed his views about China. Rather, he is masking those views with a softer tone and by what he chooses to emphasize. Of course, the circumstances have changed – Australia now has a much better relationship with China. But importantly, Dutton needs to appeal to local Chinese-Australian voters.

The Liberal Party suffered a major hit among Chinese-Australian voters in the 2022 election. The party’s review of its election performance noted: “In the 15 seats with the highest proportion of people of Chinese ancestry, the swing against the party (on a two-party preferred basis) was 6.6%, compared to 3.7% in other seats. Today, there are more than 1.2 million people of Chinese ancestry in Australia. Rebuilding the party’s relationship with the Chinese community must be a priority during this parliamentary term.” The Liberal Party is targeting seats where Labor is vulnerable at the election, and where Chinese-Australian votes are significant, including Reid and Bennelong in NSW, and Chisholm and Aston in Victoria.

Dutton (and the Prime Minister) will attend Lunar New Year celebrations in Box Hill, Melbourne this weekend. Notably, Dutton’s new foreign affairs spokesperson, David Coleman, appointed last weekend, has worked extensively with the Chinese community. One of the contenders for the position was the high-performing James Paterson. There may be more substantial reasons for keeping Paterson in the home affairs portfolio, but his very hawkish stance on China may also have been a consideration. In talking about the Coalition’s positive record in relation to China, Dutton recalled the free trade agreement signed during the Abbott government and said “we want to have mutual respect in the relationship”.

During its years in government, the Coalition’s relationship with China swung between pragmatic friendship and negative sentiment of suspicion. After a relatively smooth period under Abbott, things started to deteriorate when the Turnbull government issued warnings to China over foreign interference, introduced legislation, and banned Huawei from participating in the 5G network. Then the relationship plummeted when the Morrison government called for an investigation into the origins and handling of the COVID outbreak in Wuhan.

Despite Dutton’s confidence, managing the relationship with China after the election, no matter who is in government, may be more tricky than it is now. The Albanese government can point to the significant improvement in the bilateral relationship as one of its key foreign policy achievements. China has moved Australia out of the deep freeze, removing trade barriers worth $20 billion it had previously imposed. Dialogue and ministerial exchanges have resumed. Anthony Albanese has been welcomed in China. But this week's speculation about China’s new artificial intelligence platform, DeepSeek, is a reminder of long-held security concerns about Chinese technological penetration. (Dutton, incidentally, has an account on Chinese-owned TikTok – even though the app is banned on official government devices – partly to engage with the local Chinese community as well as younger demographics.)

Australia’s mineral industry may be vulnerable to Chinese displeasure. The Senate will consider the government’s “Future Made in Australia” legislation in the next two weeks, which provides tax incentives for processing critical minerals. China has a global monopoly on this processing and has shown a willingness to weaponise it, for example, against Japan. China’s multi-billion-dollar investments in nickel processing in Indonesia have had a severe impact on Australian producers.

The change of government in Australia did facilitate an improvement in the bilateral relationship, but this improvement has also been driven largely by China’s own interests. Equally, the future of the relationship is more in China’s hands than Australia’s. “The relationship with China is inherently unstable,” says Richard McGregor, China specialist at the Lowy Institute. “The day-to-day relationship has returned to a degree of normality. But all the structural pressures that led to the confrontation are still there.”

Those pressures include China’s “military expansion in the region, the competition between the US and China, Australian concerns about foreign interference and hacking, China’s efforts to build its power in the Pacific at Australia’s expense. None of that has gone away,” McGregor says. The biggest change in recent years is that “China is more powerful and more willing to demonstrate its power”. On top of any issues in the bilateral relationship, Australia could find itself caught in the crossfire if US-China relations under Donald Trump were to seriously deteriorate, especially if his tariff policies lead to a trade war. Simon Jackman of the University of Sydney warns that if US policy hits the (already struggling) Chinese economy, this will impact Australian exporters.

“If US tariffs or import bans slow the Chinese economy, that will create some short to medium-term trouble for Australian exporters,” Jackman says. “As happened during the first Trump term and during COVID, if global supply chains have to be reconfigured to deal with volatility in US-China trade relations, the Australian export sector will find itself scrambling for other opportunities.” Ironically, the early moves to diversify markets when China was imposing restrictions on Australian producers will help exporters prepare for such a contingency.

Michelle Grattan is a Professorial Fellow at the University of Canberra and chief political correspondent at The Conversation, where this article first appeared.