China had successfully offered economic incentives to Australia that influenced policymakers to view China’s rise as a positive trend in the Indo–Pacific, with significant trade and investment from China driving economic growth for both. For example, China accounts for roughly 40 percent of Australian exports, and, therefore, a significant percentage of Australian jobs.REF
Arising political and security concerns in 2017, however, began to get in the way of friendly economic ties between China and Australia—the latter of which initiated a series of actions against China, including a legislative crackdown on foreign interference in elections, calling out aggressive Chinese behavior in the South China Sea, and banning Huawei from investing in Australian telecommunication networks. China, in turn, met these Australian political statements and domestic legal decisions with retaliatory moves, including delaying Australian wine at customs and restricting imports of Australian coal.REF
China’s carrot-and-stick statecraft had evolved into a general pressure campaign against Australian interests in 2020 after the Australian government criticized China for its handling of the COVID-19 pandemic and led an initiative at the World Health Organization imploring all member states to support Canberra’s independent inquiry into the origins of the pandemic.REF
Shift in Chinese Behavior
In response to Australia’s call for an independent inquiry into the origins of COVID-19 and building on existing frustration with Australian political actions dating back to 2017, China commenced a much more concerted campaign of economic and political coercion against Australia. In May 2020, China began to apply general bans and new tariffs against a series of Australian goods, including barley, beef, wine, wheat, wool, lobsters, sugar, copper, timber, grapes, coal, and cotton.REF According to a study by the Australian Strategic Policy Institute, this represented a marked increase in coercive statecraft by China, in general, with Australia being the most targeted country and Europe the most targeted region.REF The study recorded a total of 21 coercive acts against Australia.
Examples of Coercive Statecraft Against Australia
Following are two examples of China’s use of coercion against Australia.
Fourteen Grievances. The most infamous example of Chinese coercive statecraft against Australia is the “14 grievances,” a series of complaints and demands in a document deliberately leaked to Australian media outlets in November 2020.REF The 14 grievances included Australian government funding for what the Chinese government considered “anti-China” research at the Australian Strategic Policy Institute, visa cancellations for Chinese students, “spearheading a crusade” in multilateral forums against China on issues of sovereignty and human rights, Australia’s call for an independent investigation into the origins of COVID-19, banning Huawei from Australia’s 5G network, blocking Chinese investment deals in certain Australian economic sectors, unfriendly or antagonistic reports on China by Australian media, and condemnation of Chinese aggression in the South China Sea.REF
China’s gamble backfired: Rather than convincing Australia to accede to China’s demands, the grievance list incensed public opinion against China and granted Australian China hawks increased political capital to respond. In an immediate example, Australia’s then-Secretary of the Department of Foreign Affairs and Trade Frances Adamson publicly labeled the 14 grievances as a “massive own goal” for China that had “played very negatively” for it.REF
Military Actions. Since 2020, China has also engaged in a series of military provocations against the Australian Defence Force, likely in an attempt to test Australian resolve and to demonstrate the consequences of Australia’s increased security cooperation with the United States.
In November 2023, a Chinese warship caused minor injuries to Royal Australian Navy divers in an incident off the coast of Japan. Australian divers assigned to an Australian frigate were underwater working to disentangle the ship from some fishing nets when a Chinese warship approached. The Chinese ship acknowledged warnings from the Australian ship about divers below yet it continued to approach, “operating its hull-mounted sonar in a manner that posed a risk to the safety of the Australian divers,” according to the Australian Ministry of Defense.REF The incident prompted soul-searching from Australian defense experts, who began to ask what sort of limits the Australian military would impose on Chinese behavior, especially concerning the safety of Australian military service members.REF
In May 2024, a Chinese fighter jet intercepted an Australian helicopter in international waters in the Yellow Sea, dropping flares directly in front of the helicopter. When Australia’s government protested, the Chinese Ministry of Defense accused Australia of having used the helicopter to spy on Chinese military exercises.REF In both cases, the result seems not to have been effective deterrence of Australian actions by China, but instead a hardening of Australian resolve in opposition to Chinese actions, including a greater Australian willingness to call out aggressive Chinese military action.
Results of China’s Coercive Campaign Against Australia
The coercive statecraft campaign against Australia backfired on China, having the opposite of the intended effect. Australia did not reverse any of the political decisions that had angered Beijing. Instead, Australia has more strongly aligned with the United States and Japan in terms of security cooperation and been more willing to criticize China in international forums.
Furthermore, Australia’s effective response to the economic restrictions imposed by China not only abrogated the intended effect of China’s actions, but also provided an example to other countries in the region that may face similar action by China in the future.REF For instance, China’s decision to cut off Australian coal imports forced China to seek increased coal from Russia and Indonesia. This pushed a significant amount of Russian and Indonesian coal off the market, forcing India, Japan, and South Korea to turn to Australia for coal. In fact, the result was an increase in the price of coal internationally and a rise in export earnings for Australian coal producers.REF
Likewise, increased military incidents have failed to deter Australian policymakers who, instead, are a driving force behind Australia’s dramatic planned increases in military spending. This includes a shift to a “strategy of denial” whose implicit adversary is China. Additionally, under the landmark 2021 AUKUS agreement—the security partnership among Australia, the U.K., and the U.S.—Australia will host U.S. Virginia-class submarines at HMAS Stirling, the naval base near Perth on the Indian Ocean, and plans to purchase several of the nuclear-powered, conventionally armed submarines for itself in the early 2030s.REF
Political and diplomatic coercion through actions like the publication of the 14 grievances have been the most self-defeating action of all. With no hard power behind it, and mitigated economic consequences (some sectors, like wine, took mild hits in the economic coercion campaign), the issuance of the 14 grievances served as a wake-up call to the Australian public and encouraged Australian policymakers to distance themselves even further from China and position themselves closer to its allies the United States and Japan.
Conclusion
The goal of coercive statecraft is to leverage sticks and carrots that will affect the decision-making process in a foreign country to one’s own benefit. China’s recent application of the concept has been a failure. In attempting to coerce Australia to change its political and diplomatic stances, China’s pressure inadvertently backfired. Instead, China’s campaign caused Australia to diversify its export markets, increase its defense spending, and more publicly oppose China in the Indo–Pacific.
China’s coercive statecraft against Australia may even have had spillover effects in the region, contributing to New Zealand’s drive to diversify its export markets away from China and further engage with the United States and the Philippines. Before Xi Jinping, many countries in the Indo–Pacific had a positive view of China’s rise. Today, China’s self-defeating behavior has turned neighbors in the region against it and ultimately undermined its long-term foreign policy goals.
Wilson Beaver is Senior Policy Advisor for Defense Budgeting and NATO Policy in the Douglas and Sarah Allison Center for National Security at The Heritage Foundation.
