ICYMI, Prime Minister Anthony Albanese visited China this week.

He was there to meet with President Xi Jinping, and to secure Australia’s trade relationship with China. That second part is particularly important because China is our biggest trading partner, buying massive quantities of Australian meat, wine, and coal.

Given the global economic turmoil sparked by U.S. President Donald Trump’s tariffs, Australia's relationship with China is more important than ever.

Ties between the two countries haven’t always been sunshine and rainbows, but Albanese described this week’s visit as “another important step in the Australia-China relationship.”

Today, I’ll walk you through Australia’s long history of trade with China, and how much it’s changed in the last decade.

Australia’s relationship with China is based on our natural resources. In fact, the first contact people on this continent had with China involved trade.

In the 1700s, before British colonisation, the Yolŋu people of Arnhem Land traded sea cucumber for cloth and other goods with the Indigenous Makasar of east Indonesia.

The Makasar dried and sold the sea cucumber to their northern neighbour, China.

Later down the track, thousands of Chinese people migrated to Australia to try and make their fortune in the gold rush of the 1850s.

In the early 20th century, there were sporadic attempts at setting up formal links between Australia and China, but these were abandoned following the Communist revolution led by eventual leader Mao Zedong.

It wasn’t until Gough Whitlam became Prime Minister in the 1970s that Australia and China’s relationship truly solidified.

Whitlam visited China in 1971 (as Opposition Leader) and again in 1973 (as PM), initiating Australia’s formal relationship with the Communist government.

Speaking at a banquet in Beijing on that second visit, Whitlam said: “Our concern is no longer exclusively with nations in far removed areas of the globe” — meaning England and the U.S.

Instead, he said trade would be expanded, part of a new relationship “based on mutual respect and mutual trust.”

Over the ensuing years, Australian leaders prioritised trade with China — particularly John Howard, who used trade as a way to keep the relationship strong while circumventing the vast political differences between the two nations.

In 2014, Australia signed a free trade agreement with China, which came into effect the following year. These agreements reduce or outright remove restrictions on trade between two or more nations, including tariffs.

Broadly speaking, the Australian Government only spoke out against China in cases of serious human rights abuses. For example, in 2022, when a United Nations report found that China was responsible for “serious human rights violations” against the Uyghur ethnic group in Xinjiang.

While there were many dominoes that fell on the way to diplomatic ties breaking down, the largest and final was in 2020.

Soon after the outbreak of the COVID-19 pandemic, the Morrison Government announced Australia would support an inquiry into its origins. The disease’s first reported patients were in Wuhan, China.

In response, China’s then-ambassador to Australia Jingye Cheng told the Australian Financial Review that “ordinary” Chinese citizens might also inquire “why they should drink Australian wine or eat Australian beef.”

Over the following months, the Chinese Government imposed a range of tariffs and bans on Australian products, including barley, wine, lobster, beef, and timber. The restrictions impacted an estimated $20 billion worth of Australian exports in 2020.

Beyond trade, Australia’s relationship with China cooled to glacial temperatures. It wasn’t until a change in Government that it began to thaw.

In November 2022, new Prime Minister Anthony Albanese travelled to Bali for the G20 summit. On the sidelines, he met with President Xi Jinping for half an hour.

This short meeting was described by Australian media and business as a major step towards improving the bilateral relationship.

It was also the first time an Australian leader had met with President Xi in six years, since PM Malcolm Turnbull spoke with him in 2016.

Both leaders spoke positively of the meeting, with Xi calling the tensions “the last thing we want to see.”

In response, Albanese said Australia’s approach to China would be to “co-operate where we can, and disagree where we must.” It’s a line he and Foreign Affairs Minister Penny Wong have said repeatedly to this day, guiding the Government’s response to any issues in its conversations with China, whether they be about human rights, or selling wine and lobster.

To the relief of Australian farmers and exporters, China gradually lifted its tariffs and bans on Aussie goods. The last were lifted in December 2024.

In addition to trade, China also made some concessions to Australia, including the release of Cheng Lei. The journalist was detained for three years on spying charges, which she has always denied.

However, Australian-Chinese writer Dr Yang Hengjun is still detained. The PM said he raised his conditions at his recent meeting with President Xi.

Dr Yang’s detention is only one of Australia’s issues with China’s Government. Given the economic conditions, though, Australia may be more inclined to do more cooperating than disagreeing.

Australia’s relationship with China is complicated, but one thing is more straightforward: When a nation makes it hard to trade with them, other nations need to change their approach.

Since Donald Trump returned to office in January, the U.S. has announced wide-ranging tariffs on countries and specific imports. Trump reserved his highest tariffs for China, which responded with its own, though both sides have been seeking a new agreement.

Under Trump’s plan to reduce imports to the U.S. and boost American manufacturing for local consumers, Australia and China could be forced to increase trade to make up the difference.

A less rosy future where the U.S. falls into a recession, as speculated by economists, also affects both nations.

These concerns have guided Albanese’s visit this week, where he met with business and industry leaders and announced a review of Australia’s free trade agreement with China. That’s the "co-operating where we can” part.

The “disagree where we must” part is harder to navigate. A country whose lands abound in nature’s gifts will always be useful to those with fewer or different resources, but we have seen in the very recent past how wide-ranging the effects of one less-than-positive comment can be.

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