In international diplomacy, few relationships have experienced such a rapid and tumultuous transformation as the relationship between Australia and China over the last five years. What once stood as a robust economic partnership with burgeoning trade ties morphed into a complex dance of political tensions, economic uncertainties and strategic recalibrations.

The genesis of this downturn can be traced back to the ascension of Xi Jinping to the presidency of China. Xi is the most ideological leader of China since Mao. He is a Marxist-Leninist whose political priorities are power, not economics. Just as his domestic strategy is to consolidate his personal power across China, so too is his international strategy to challenge and diminish the global power of the U.S. and its allies.

Just as Xi’s domestic strategy is to consolidate his personal power across China, so too is his international strategy to challenge and diminish the global power of the U.S. and its allies.

For some time, Xi employed fiercely confrontational tactics internationally. So aggressive was his diplomacy that it became known as wolf-warrior diplomacy. Chinese ambassadors harangued host governments – including heads of state – Beijing issued denunciations of those with whom it disagreed and, on the ground, a range of punitive measures were introduced to bring recalcitrant nations into line.

Australia was a victim of this approach. Starting with Australia’s decision to ban Chinese tech giant Huawei from its 5G network in 2018, the stage was set for broader confrontations. The subsequent years witnessed a crescendo of disputes.

The ideological fault lines widened as Canberra took an assertive stance on issues central to China’s core interests. Whether it was Australia’s vocal calls for an independent inquiry into the origins of the Covid-19 pandemic or its condemnation of Beijing’s actions in Hong Kong and Xinjiang, the antipodean nation found itself navigating treacherous diplomatic waters.

Whether it was Australia’s vocal calls for an independent inquiry into the origins of the Covid-19 pandemic or its condemnation of Beijing’s actions in Hong Kong and Xinjiang, the antipodean nation found itself navigating treacherous diplomatic waters.

Human rights concerns emerged as a particularly contentious battleground. Australia’s insistence on holding China accountable for alleged human rights abuses clashed head-on with Beijing’s refusal to countenance what it viewed as unwarranted interference in its domestic affairs. The result was a diplomatic impasse marked by rhetoric, sanctions and a palpable sense of mutual mistrust.

Security considerations also played a pivotal role in the deterioration of relations. As the geopolitical landscape in the Indo-Pacific region underwent seismic shifts, Australia’s alignment with the U.S. in countering China’s assertiveness added fuel to the fire. From joint military exercises to the Quad alliance, Canberra’s strategic choices fuelled suspicions in Beijing, amplifying the strategic rivalry that now defines their relationship.

The ‘Quad,’ comprising the U.S., Japan, India, and Australia, had become a particular focal point in the strategic recalibration of the region. While Australia’s participation in this alliance is driven by concerns over regional stability, it has been interpreted by China as part of a containment strategy, further deepening the mistrust that pervades Sino-Australian interactions.

Trade, the lifeblood of the Australia-China relationship, bore the brunt of these diplomatic squabbles. Beijing’s response was swift and impactful, with a series of economic reprisals targeting Australian exports. Barley, beef and wine found themselves ensnared in a web of tariffs and regulatory hurdles, leaving Australian producers grappling with unprecedented challenges.

The economic repercussions reverberated across both nations. China, traditionally Australia’s largest trading partner, sought to diversify its imports, exploring alternative sources for key commodities. Simultaneously, Australia, heavily reliant on Chinese demand for its exports, faced the stark reality of a recalibrated economic landscape. The symbiotic relationship that had underpinned prosperity for both countries for years suddenly seemed precarious.

China, traditionally Australia’s largest trading partner, sought to diversify its imports, exploring alternative sources for key commodities. Simultaneously, Australia, heavily reliant on Chinese demand for its exports, faced the stark reality of a recalibrated economic landscape.

Yet, amid the turbulence, there remained glimmers of pragmatism. Economic interdependence, despite being strained, prevented an outright rupture. Chinese students continued to flock to Australian universities. And bilateral trade, while diminished, persisted. The economic calculus tempered the political rhetoric to some extent, underscoring the delicate balancing act that both nations must navigate.

A little over a year ago, China started to change its tactics toward Australia. It became clear to Beijing that wolf-warrior diplomacy and sanctions on Australian exports were not going to change the stance of the Australian government. There was nothing to gain for China in continuing to bully Australia. Australia had too many allies who rallied to its side. What is more, Beijing’s tactics toward Canberra alarmed regional neighbours.

China’s change of tactics did not relate only to Australia. Beijing has started to conduct more traditional and civilized diplomacy, including with Western nations. Indeed, given that the G7 comprises a third of the global economy and that China’s hostile anti-Western positions had led to the redirection of supply chains away from China and a steep decline in Western investment in China, it is hardly surprising that Beijing decided to make a tactical change.

As for Australia, the change of tactics culminated in a recent visit to Beijing by the Australian Prime Minister, Anthony Albanese. While the visit was dominated by banal diplomatic platitudes from both sides, it did represent a realization by Beijing that it was in its best interest to have a cordial political relationship with Australia.

Still, it would be a mistake to think that Beijing’s change in tactics represents a change in strategy. It does not. Xi Jinping remains as ideologically committed as he has ever been, and China continues to see its relationship with the U.S. as a relationship of rivalry and power struggle. It is through that paradigm that China views international events. But Beijing has learned that the confrontational approach is not always the best way to advance its interests. And the country that has taught China this lesson most clearly is Australia.

Still, it would be a mistake to think that Beijing’s change in tactics represents a change in strategy. It does not.