Chinese Premier Li Qiang arrives in Australia as Beijing looks to mend ties

Chinese Premier Li Qiang arrived in Australia on Saturday on a relations-mending mission with panda diplomacy, rock lobsters and China’s global dominance in the critical minerals sector high on the agenda.

His visit is the first by a Chinese premier in seven years and is expected to pave the way for President Xi Jinping’s first journey to Australia since 2014.

This is the second leg of his tour after New Zealand and will end in Malaysia.

Before leaving New Zealand, Li told an audience in the city of Auckland on Saturday that his country was committed to creating a first-class business environment and supporting foreign enterprises to develop in China, according to Chinese state media.

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Li said there was vast potential for China and New Zealand to collaborate in areas such as green development and that Beijing welcomed New Zealand enterprises, such as dairy company Fonterra, that seized such opportunities, the Xinhua News Agency reported.

During the Australian leg of his travels which ends on Tuesday, China’s most powerful politician after President Xi Jinping is expected to visit Adelaide Zoo in the South Australia state capital where his Air China flight landed from Auckland.

Australian Foreign Minister Penny Wong and South Australia Premier Peter Malinauskas greeted Li on the Adelaide Airport tarmac.

Li will also visit a Chinese-controlled lithium processing plant in the Kwinana Beach industrial estate in Western Australia state, as well as Australia’s Parliament House in the national capital Canberra.

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China initiated a reset of the bilateral relationship after Prime Minister Anthony Albanese’s center-left Labor Party was elected in 2022.

The relationship collapsed during the previous conservative administration’s almost decade in power over legislation that banned covert foreign interference in Australian politics, the exclusion of Chinese-owned telecommunications giant Huawei from rolling out the national 5G network due to security concerns, and Australia’s call for an independent investigation into the causes of and responses to the COVID-19 pandemic.

Beijing imposed an array of official and unofficial trade blocks in 2020 on a range of Australian exports including coal, wine, barley and wood that cost up to 20 billion Australian dollars ($13 billion) a year.

All the trade bans have now been lifted except for Australian live lobster exports. Trade Minister Don Farrell predicted that impediment would also be lifted soon after Li’s visit with Chinese Commerce Minister Wang Wentao.

“I’d be very confident that the visit this week will result in a very successful outcome for lobster producers,” Farrell told reporters Wednesday.

Many observers expect Australia will be more cautious about its future economic relationship with China after being subjected to what many see as economic coercion in recent years.
Australian National University China expert Benjamin Herscovitch describes an “emerging expectations gap” between Beijing and Canberra.

“Beijing, now that the coercion campaign is over, wants to … turn the page and launch into a more expansive, more positive, more cooperative bilateral relationship,” Herscovitch said.

“Canberra’s saying: ‘Look. Hold on. We want the trade restrictions gone and we want high-level diplomacy restored. But we’re not interested in deeper science and technology cooperation with China because we see that potentially from an Australian point of view as a security threat,’” Herscovitch added.

Li intends to visit Tianqi Lithium Energy Australia’s processing plant south of the Western Australia capital Perth on Tuesday to underscore China’s interest in investing in critical minerals, news media have reported. The plant produces battery-grade lithium hydroxide for electric vehicles.

Australia shares the United States’ concerns over China’s dominance in the critical minerals, which are essential components in the world’s transition to renewable energy sources.

Citing Australia’s national interests, Treasurer Jim Chalmers recently ordered five Chinese-linked companies to divest their shares in the rare earth mining company, Northern Minerals.

Less controversially, Li is expected to make a visit Sunday to Adelaide Zoo, which has been the home of China-born giant pandas Wang Wang and Fu Ni since 2009.

The Adelaide Advertiser newspaper has reported Li will announce the pandas will be replaced by another breeding pair after they return to China in November.

While the bilateral economic relationship is recovering from plumbing new lows in recent years, the security relationship between the two free trading partners appears more tense.

An annual poll by the Sydney-based Lowy Institute foreign policy think tank released in June found that 53 per cent of Australian respondents saw China as more of a security threat than an economic partner.

Albanese has said he will raise with Li during an annual leaders’ meeting on Monday recent clashes between the two countries’ militaries in the South China Sea and Yellow Sea which Australia argues endangered Australian personnel.

The premier spent three days in New Zealand, a free trade partner with which China has enjoyed a more harmonious relationship than it has with Australia. Li described China and New Zealand as “good friends.”

His next stop will be Malaysia, where bilateral relations are further complicated by competing territorial claims in the South China Sea.

New Zealand Prime Minister Christopher Luxon told Li on Saturday: “China is one of New Zealand’s most important and consequential relationships.”

Li used the trip to express concerns at New Zealand’s contemplation of joining a military technology-sharing arrangement under Australia’s AUKUS pact with the United States and Britain. The pact’s primary aim is to provide Australia with a fleet of submarines powered by US nuclear technology.