On September 8th two Australian journalists living in China fled that country to return to their homeland. The journalists— Bill Birtles of the Australian Broadcasting Corporation and Mike Smith of the Australian Financial Review—left China with assistance from the Australian government. According to reports, Australian diplomats had advised the two to leave the country several days before Chinese authorities confronted them as “persons of interest” in an unspecified national security case. These developments follow confirmation on August 31st that China had detained Cheng Lei, an Australian television anchor working for China Global Television Network, an English-language Chinese state media channel.
The developments are striking, both for their details—Mr Birtles and Mr Smith sought shelter at Australian diplomatic compounds, and were able to leave China only after diplomatic intercession—and the nature of the case. Chinese authorities interviewed Mr Birtles as part of the conditions for his departure, but reportedly addressed neither his reporting nor his conduct in China, despite the official allegations. The Economist Intelligence Unit interprets the moves as a Chinese attempt to intimidate Australia amid a recent sharp downturn in official relations.
Bilateral relations are under increasing strain. On September 1st China cited pest detection to broaden its ban on Australian barley imports—a rationale it has used previously to justify economic retaliation amid diplomatic rows. Australian public perceptions of China are also worsening: a poll carried out in June by an Australian think-tank, the Lowy Institute, found that sentiment towards China has fallen to its lowest level since the survey began in 2005. These actions will exacerbate these views, and will complicate future efforts to repair Australia-China ties.
This deterioration comes despite enduring economic ties elsewhere. Australia remains China’s largest source of imported iron ore and coal—important commodities that are tied to China’s infrastructure development (and its post-pandemic relief programme). These trends will persist despite the foreign policy spat, owing to difficulties in diversifying away from Australian suppliers. Nevertheless, this will not prevent further deterioration in political ties, which is driven primarily by Australia’s calls for an international inquiry into the origins of the coronavirus. Worsening ties will also keep other Australian exports—such as aluminium, copper and gold, upon which China is less reliant—vulnerable to future Chinese trade actions.
The developments align with our forecast that Australia-China ties will worsen over 2020‑24, even as some trade links remain robust.
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