Canberra sets China policy as it balances interests

Significance

Chinese trade restrictions and deteriorating diplomatic relations are increasing public perceptions of Beijing as a security threat, yet mineral exports to China remain a mainstay of the Australian economy, particularly for some state-level governments. With an election looming, this leaves Prime Minister Scott Morrison engaged in a difficult balancing act.

Impacts

• Beijing’s trade restrictions will see more economic sectors urging Canberra to diversify the country’s trade partners.
• Efforts to find new coal markets could set Canberra at odds with other Western governments ahead of COP26.
• The governing Liberal-National coalition and the opposition will share a harder line on China ahead of the upcoming election.