From Freeze to Recovery: What a Decade of Australia–China Relations Reveals

In November 2022, on the sidelines of the G20 summit in Bali, Australian Prime Minister Anthony Albanese and Chinese President Xi Jinping shook hands for the first time. The meeting lasted only minutes, but it marked the beginning of the end of one of the most severe diplomatic freezes between two economically interdependent nations in recent history. For nearly three years, from late 2019 through mid-2022, the Australian and Chinese governments conducted no high-level diplomatic engagement. Not a single ministerial meeting. Not one bilateral dialogue. Complete silence.

Yet during those same three years, bilateral trade continued. Chinese students kept studying at Australian universities. Business chambers maintained their operations. The economic relationship, worth more than AUD $300 billion annually (AUD $308.7 billion in FY25), proved more resilient than the political one.

This paradox – deep economic integration coexisting with profound strategic competition – defines one of the most consequential bilateral relationships in the Indo-Pacific. And the 2015-2025 period provides a complete cycle through which to understand it: from high cooperation through severe crisis to managed recovery. This article analyses that decade using 472 official diplomatic engagement records, comprehensive trade data, and documented incidents to reveal patterns that have direct implications for how Australia navigates great power competition in an era of complex interdependence.

I. THE STAKES: WHY THIS RELATIONSHIP MATTERS

Understanding Australia-China relations isn’t just an academic exercise. The numbers reveal why this relationship demands serious attention from policymakers, business leaders, and citizens alike.

These figures represent more than economic statistics. They translate into real-world impacts, such as mining jobs in Western Australia, agricultural livelihoods in regional communities, university funding structures, and the price Australians pay for consumer goods. When China imposed trade restrictions on Australian wine, barley, coal, and lobster in late 2020, the economic pain was immediate and measurable. When those restrictions lifted between 2023 and 2024, the relief was equally tangible.

But the relationship extends beyond economics into fundamental questions about Australia’s strategic orientation. The same decade that saw bilateral trade grow 113% (see Table 2) also witnessed profound security competition: the 2018 Huawei 5G exclusion, the 2020 call for a COVID-19 investigation, and most significantly, the 2021 AUKUS announcement of nuclear-powered submarine cooperation with the United States and United Kingdom. Each security decision triggered diplomatic consequences, revealing the structural tensions inherent in a relationship characterised by economic convergence and strategic divergence.

For Australian policymakers, this creates a complex balancing act. For Chinese officials, it raises questions about a partner that trades intensively while strengthening military ties with Beijing’s strategic competitor. For other middle powers watching from Southeast Asia, Europe, and beyond, Australia’s experience offers insights into how nations manage economic dependence alongside strategic autonomy in an era of great power competition.

II. THE DECADE IN FOUR ACTS: COOPERATION, COOLING, CRISIS, RECOVERY

The 2015-2025 period seems to naturally divide into four distinct phases, each characterised by measurable shifts in diplomatic engagement, economic cooperation, and strategic interaction. Understanding these phases provides the foundation for identifying the patterns that emerge across the complete relationship cycle.

The Golden Era (2015-2017): Peak Cooperation

The China-Australia Free Trade Agreement (ChAFTA) entered into force on December 20, 2015, marking the pinnacle of bilateral cooperation. President Xi Jinping had visited Australia in 2014 for the first time, addressing the Australian Parliament to announce the successful conclusion of ChAFTA negotiations and to elevate the relationship to a ‘comprehensive strategic partnership’. The terminology mattered: it signalled that both governments viewed the relationship as extending beyond commerce into broader strategic cooperation.

During this period, high-level meetings occurred on average 4 to 5 times annually, often in prestigious venues like Beijing’s Great Hall of the People or Australia’s Parliament House. Premier Li Keqiang visited Australia in March 2017, participating in a full state visit and the China-Australia CEO Roundtable – a prominent high-level government-business forum – along with State/Provincial Leaders Forums and extensive business engagement. Chinese Foreign Minister Wang Yi made regular trips to Canberra, and Australian ministers travelled frequently to Beijing for consultations spanning economic, security, and social cooperation areas.

The diplomatic language reflected this positive trajectory. The official Chinese statements from this period often included partnership terminology like ‘comprehensive strategic partnership’, ‘win-win cooperation’, ‘mutual benefit’, and ‘natural cooperative partners’. Wang Yi’s statement at the February 2017 Strategic Dialogue emphasised that ‘bilateral relations are embracing important opportunities’ and called to ‘further enhance strategic dialogue, boost political mutual trust’. These patterns were consistent with the optimism surrounding the entry into force of ChAFTA in December 2015, which was highlighted in ambassadorial speeches as a milestone in the bilateral relationship. See Figure 2 for additional examples of prominent terms that frequently appeared in diplomatic statements.

Economically, ChAFTA delivered immediate benefits. Australia’s total trade surplus with China has increased from AUD $25.7 billion in FY15 to AUD $68.7 billion in FY25, while we have a trade deficit of AUD $52 billion with all our other partners combined in FY25 (refer to Table 2). The agreement’s tariff reductions created new market access for Australian beef, dairy, wine, and services. Chinese student numbers in Australia grew from 95,000 in 2015 to 240,000 in 2016. Tourism boomed, with Chinese visitors exceeding 1 million annually by 2017. Business utilisation rates for ChAFTA provisions exceeded 90% in both directions, indicating genuine commercial value rather than symbolic agreement.

The Cooling Period (2017-2019): Emerging Tensions

In December 2017, Prime Minister Malcolm Turnbull introduced foreign interference legislation, marking a pivotal moment in the relationship. While the laws applied to all countries, Turnbull’s comments, including his use of the phrase ‘the Australian people stand up’, which echoed Mao Zedong’s 1949 proclamation, were interpreted by Chinese officials as provocatively targeting China. The diplomatic response was immediate: official statements emphasised the need for ‘mutual respect’ and warned against ‘politicising’ normal cooperation.

Throughout 2018 and 2019, observable changes in diplomatic patterns began to accumulate. The frequency of high-level meetings declined from 4-5 annually to 2-3. More significantly, the nature of meetings shifted. The August 2018 encounter between Foreign Ministers Wang Yi and Julie Bishop occurred ‘at request’ on the sidelines of regional meetings in Singapore, which was a departure from scheduled bilateral visits, signalling reduced relationship priority. Bishop felt compelled to clarify that negative media reports about Australia’s China policy did not represent her government’s position, revealing underlying strain.

The diplomatic language evolved systematically. Language emphasising ‘partnership’ became less frequent in official statements. References to ‘core interests’, ‘sovereignty’, and ‘territorial integrity’ became more common. This was not random fluctuation. It represented a deliberate shift in how Chinese officials framed the relationship. When Wang Yi met with the new Foreign Minister Marise Payne in September 2018, his statement explicitly referenced needing to ‘learn from past lessons’, confirming that tensions had reached levels requiring conscious repair efforts.

Policy disagreements multiplied. Australia tightened foreign investment screening procedures, particularly for critical infrastructure. The August 2018 decision to exclude Huawei from Australia’s 5G network prompted strong Chinese protests. Australia intensified its concerns about South China Sea militarisation and human rights issues in Xinjiang. Each issue individually might have been manageable, but their accumulation created a pattern that Chinese officials interpreted as alignment with U.S. strategic objectives rather than independent Australian policy.

Yet during this cooling period, the economic relationship continued to grow. Bilateral trade reached AUD $235 billion by 2019. Chinese students numbered approximately 200,000. Tourism reached 1.43 million. ChAFTA mechanisms continued to operate. The diplomatic chill had not yet translated into economic consequences, a lag that would prove significant for understanding how relationship deterioration unfolds.

The Crisis Period (2020-2022): Complete Breakdown

If the cooling period raised warning flags, the crisis period triggered alarm bells. In April 2020, Prime Minister Scott Morrison called for an independent international investigation into COVID-19’s origins. The proposal had merit on public health grounds, but its timing, as China faced global criticism over virus management, and its framing created maximum diplomatic friction. Within weeks, Chinese officials publicly linked Australia’s call to its broader pattern of provocative policies.

By November 2020, China had implemented sweeping trade restrictions. Wine exports faced anti-dumping duties exceeding 200%. Barley encountered an 80.5% tariff. Coal shipments faced indefinite delays at Chinese ports. Lobster exports stopped entirely. Timber, copper, and other products faced various barriers. The Chinese embassy in Canberra provided Australian media with a list of ‘14 grievances’, an extraordinary diplomatic action that explicitly documented Chinese concerns spanning investment restrictions, telecommunications decisions, media coverage, academic freedom, and parliamentary activities.

The diplomatic language during this period escalated to a crisis tone. References to ‘third-party interference’, absent during the Golden Era, became common in Chinese statements about Australia. Connotations around ‘partnership’ virtually disappeared from the language, replaced by repeated emphasis on ‘sovereignty’ and ‘core interests’. When Australia criticised Hong Kong or Xinjiang policies, responses accused Canberra of ‘political manipulation’ and ‘ideological prejudice’.

Then came AUKUS. On September 15, 2021, Australia, the United Kingdom, and the United States announced a security partnership centred on providing Australia with nuclear-powered submarines. For China, these actions crossed a fundamental red line. Within two weeks, Foreign Minister Wang Yi had conducted phone consultations with Malaysian and Bruneian counterparts to coordinate opposition. He briefed EU representatives at the China-EU strategic dialogue. He articulated a systematic critique: the ‘five harms to the region’ including nuclear proliferation risk, arms race acceleration, regional stability undermining, nuclear-weapon-free zone violations, and strategic balance disruption.

“We have to ask ourselves, who is actually creating security concerns in the region? Who is forming blocs and provoking confrontation? Who is undermining regional peace and stability?”

– Foreign Minister Wang Yi, September 28, 2021

High-level diplomatic contacts ceased after September 2019 and remained frozen throughout 2020-2021. From the last Wang Yi–Payne meeting in September 2019 through the Australian federal election in May 2022, zero bilateral meetings occurred at any level. Requests for discussions went unanswered. Australian ministers seeking dialogue found no Chinese counterparts available. China suspended participation in the Strategic Economic Dialogue indefinitely. The message was unmistakable: this was not a routine disagreement requiring ministerial management but a fundamental breach requiring political-level intervention.

Yet even during this nadir, the economic relationship demonstrated surprising resilience. Total bilateral trade for 2021 reached AUD $231 billion, down from 2019’s peak but still substantial. Sectors unaffected by restrictions continued trading normally. Chinese students, though reduced to 131,400 due partly to COVID-19, remained Australia’s largest international student cohort. ChAFTA technical committees maintained some operations despite high-level contact cessation. Business communities in both countries, recognising their stake in relationship recovery, maintained alternative communication channels when government dialogue ceased.

The Recovery Period (2022-2025): Managed Normalisation

The May 2022 Australian federal election provided the catalyst. The incoming Albanese government signalled willingness to stabilise relations through reduced confrontational rhetoric and renewed emphasis on economic engagement. This mattered not because Labor changed Australia’s fundamental policies, as AUKUS continued, Huawei exclusion remained, investment screening stayed strict. But because the new government demonstrated that relationship management was a priority.

The first cautious step came in September 2022, when Foreign Minister Penny Wong met Wang Yi on the sidelines of the UN General Assembly. Wang’s statement acknowledged that both sides ‘stressed the importance of China-Australia relations’ and ‘reaffirmed the positioning of a comprehensive strategic partnership’, signalling that partnership language could return to the diplomatic lexicon. But the statement also emphasised the need to ‘follow the spirit of mutual respect’, which is the code for expecting policy adjustments.

The breakthrough came at the November 2022 G20 summit in Bali, where Prime Minister Albanese and President Xi held their first bilateral meeting, the first between Australian and Chinese leaders since 2016. The 30-minute discussion focused on ‘stabilising’ relations, introducing new diplomatic language that would characterise the recovery phase. Within weeks, trade normalisation began. Coal imports resumed in January 2023, just two months after the Xi–Albanese meeting. This rapid turnaround on a strategically significant commodity signalled that economic recovery could proceed quickly once political will existed.

But different sectors recovered at different rates. Barley restrictions were lifted in August 2023, nine months after the Bali meeting, which was a medium timeframe reflecting technical negotiations. Wine duties remained until March 2024, sixteen months post-Bali, demonstrating that some premium agricultural products that are perceived as symbolic targets of the trade restrictions required more sustained diplomatic work. Live lobster exports, the last to normalise, did not fully resume until December 2024, nearly 48 months after initial restrictions and 25 months after recovery began.