Home Globalisation & Geopolitics 2022 Outlook: Australian foreign policy challenges and priorities

2022 Outlook: Australian foreign policy challenges and priorities

John West
We find out about changes in Australian foreign policy and challenges it is beset by
An interview with
Executive Director of the Asian Century Institute

We are kickstarting 2022 with short conversations with some of our regular contributors about their outlook for the new year.

Here, we speak with John West, executive director of the Asian Century Institute and author of the book Asian Century… on a Knife-edge, about Australia’s diplomatic priorities for 2022, its relations with China, security and strategic alliances it is now a part of, and challenges in Australian foreign policy.

Unravel: What should Australia’s diplomatic priorities be in 2022?

John West: Australia’s diplomatic priorities in 2022 should be to restore order and stability into some key relationships, notably China and France, following the turmoil in foreign relations in 2021. 

Relations with China deteriorated further in 2021, following China’s implementation of trade sanctions in 2020 in response to Australia’s call for an independent, international enquiry into the origins of COVID-19. For example, the Australian Defence Minister Peter Dutton added fuel to fire when he said it would be “inconceivable” for Australia not to join the US should Washington take action to defend Taiwan. And the Australian government finished the year with a final slap when it joined the US in announcing a diplomatic boycott of the Beijing 2022 Winter Olympics.

Relations with France hit rock bottom when Australia jettisoned a $90 billion submarine deal with France, and joined the US and the UK in an enhanced trilateral security partnership, dubbed AUKUS. France’s Ambassador to Australia, Jean-Pierre Thebault, described this action as “a stab in the back”.

While China and AUKUS (and the Quad) covered the headlines in 2021, Southeast Asia and the Pacific are two regions of great strategic interest to Australia, and where China is expanding its influence. COVID-19 vaccination rates are still relatively low in countries like Indonesia, the Philippines, and Myanmar, and Australia must step up its vaccine diplomacy. At the request of Prime Minister Manasseh Sogavare, the Australian government deployed security personnel to the Solomon Islands to deal with violent unrest. Australia must be agile and responsive, more so than in the past, in its Pacific diplomacy.

Unravel: Do you expect relations between China and Australia to improve in the coming year?

Mr West: At this point in time, it seems difficult to envisage an improvement in Australia’s relations with China. A Chinese diplomat handed an Australian journalist a list of 14 grievances, which Australia would never accede to, and suggests that the relationship cannot be restored.    

But Australia will hold national elections in the first half of 2022, and it is very possible that Australia’s centre-right wing government (Liberal Party of Australia) will be replaced by a centre-left wing government (Australian Labor Party). While both of Australia’s major parties agree on the importance of defending Australia’s sovereignty and independence, the Labor Party is much less strident and provocative. 

For his part, President Xi Jinping is vying for a new five-year mandate as China’s leader, and until this decision is made, he needs to remain a resolute leader, keep hardliners in the Communist Party leadership onside, and maintain strong social and political control. But if, as expected, his leadership is confirmed in late 2022, he may have more room for manoeuvring and flexibility.   

These factors suggest that there could be scope for some “reset” in relations between Australia and China. Against that, there is a real risk that the COVID situation in China, which has up to now been well managed, could deteriorate quickly. New COVID variants are proving harder to control, China is now having to manage serious outbreaks, and Chinese vaccines are much less effective than Western ones. At the same time, the Chinese economy seems increasingly fragile, notably in the real estate sector. History shows that in these circumstances governments can adopt a more assertive, adventurous foreign policy to distract the local population’s attention, and to appease political hardliners.

In short, there are probably much greater uncertainties than ever before surrounding Australia’s relationship with China.          

Unravel: How important, geopolitically, are the various security and strategic arrangements that Australia is part of (for example, the Quad)?

Mr West: The increasingly contested environment of the Indo-Pacific means that Australia’s military alliance with the US (ANZUS) is more important than ever for the nation’s security.  AUKUS and the Quadrilateral Security Dialogue (the Quad) are crucial in terms of even more firmly anchoring the US’ commitment to the Indo-Pacific region and thus Australia’s security.

But given the social and political instability of the US, and the potential unreliability of its commitments from one administration to another, it is critical that Australia builds and strengthens a broad range of partnerships with other middle-power countries. Thus, the Quad is very important by virtue of the inclusion of India and Japan, as is AUKUS with the participation of the UK. In this context, discussion of the possible inclusion of Japan in AUKUS, as well as in the “Five Eyes”, an Anglosphere intelligence alliance, is only to be welcomed. 

Unravel: What are some key challenges Australia is faced with in 2022?

Mr West: As the world gradually transitions towards “living with COVID” over the course of 2022, Australia will endeavour to rehabilitate its very important international education industry (third most important export), and international tourism industry (fifth most important export), as well as open its borders to immigration, which has been a critical driver of the Australian economy.

Some of the geopolitical considerations mentioned above are relevant in this regard, as China has been by far the largest source of international students and tourists, as well as the second most important source of immigrants.

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John West
Executive Director of the Asian Century Institute

John West is author of the recent book, “Asian Century … on a Knife-edge,” and executive director of the Asian Century Institute. He is also adjunct professor at Tokyo’s Sophia University and contributing editor at FDI-Intelligence, a Financial Times magazine. These positions follow a long career in international economics and relations, with major stints at the Australian Treasury where he was director of balance of payments, OECD (head of public affairs and director OECD Forum) and Asian Development Bank Institute (senior consultant for capacity building and training).

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