China is poised to leverage its evolving relationship with Australia by expanding their free trade agreement to include artificial intelligence and the digital economy. This strategic move comes as Australian Prime Minister Anthony Albanese prepares for a consequential visit to China later this week. The trip aims to strengthen economic ties amid Australia’s shifting dynamics with the United States.
Beijing’s top diplomat in Australia, Ambassador Xiao Qian, has been vocal about the potential benefits of deepening economic cooperation. In a recent opinion piece for The Australian Financial Review, Xiao emphasized the importance of advancing bilateral relations, stating,
“Standing at a new historical starting point, now is the time to advance bilateral relations with steady progress.”
Albanese’s visit marks his second as prime minister and will include meetings with Chinese President Xi Jinping and Premier Li Qiang. A delegation of top Australian business executives will accompany him, underscoring the trip’s strong focus on trade and investment.
AI and Digital Economy: A New Frontier
China’s proposal to incorporate artificial intelligence into the existing free trade agreement with Australia reflects a broader strategy. As the global tech landscape becomes increasingly competitive, China seeks to solidify its position by forming new alliances. The focus on AI is particularly significant given the ongoing “Cold War” in technology between China and the United States.
San Francisco-based OpenAI, known for developing ChatGPT, has highlighted the rapid advancements in AI technology. Ambassador Qian sees potential in AI for Australia and China, writing,
“We are willing to review the agreement with a more open attitude and higher standard, further consolidate co-operation in traditional areas such as agriculture and mining, and actively explore new growth areas in emerging fields like artificial intelligence, healthcare, green energy, and the digital economy.”
Historical Context and Strategic Implications
China’s interest in AI is not new. The country pioneered AI provisions in its 2019 trade pact with Mauritius. Similarly, Australia’s recent agreements with the United Kingdom and the United Arab Emirates have included sections on emerging technologies. These developments indicate a trend towards incorporating AI in international trade agreements.
However, the inclusion of AI in trade talks with China is not without controversy. James Corera, director of cyber, technology, and security policy at the Australian Strategic Policy Institute, warned of the risks associated with deepening cooperation with China in these areas. He noted,
“Such monopolisation could lock Australia into technology ecosystems shaped by China’s interests, not ours.”
Geopolitical Tensions and Economic Opportunities
The backdrop to these discussions is the complex geopolitical landscape involving China, the United States, and Australia. While China and the US have reached a tentative truce over tariffs, tensions remain high in the tech sector. The US has imposed tariffs on Australian exports, adding another layer of complexity to Australia’s foreign policy.
Amid these tensions, China is positioning itself as a defender of the international order against the “America First” policies of former US President Donald Trump. Ambassador Qian articulated this stance, stating,
“China is willing to work with Australia to build consensus on international and regional issues, strengthen collaboration under multilateral frameworks, and advocate for free trade.”
Albanese’s upcoming visit to China and his recent speeches suggest a nuanced approach to Australia’s alliances. His remarks have been interpreted as advocating for greater independence within the US alliance, echoing the legacy of former Labor Prime Minister John Curtin.
Looking Ahead: Opportunities and Challenges
As Australia navigates its relationships with both China and the United States, the implications of these trade discussions are significant. The potential expansion of the free trade agreement to include AI and the digital economy could lead to new opportunities for both nations.
However, experts caution that such developments must be approached carefully to avoid over-reliance on any single partner. The balance between economic opportunity and national security remains a delicate one.
As the world watches, the outcomes of Albanese’s visit to China will likely have lasting impacts on the region’s economic and geopolitical landscape. The discussions could set a precedent for how nations integrate emerging technologies into trade agreements, shaping the future of international commerce.
