What does the PM's trip to China mean for Taiwan? | Insiders On Background

ABC Listen, podcasts, radio, news, music, and more.

Hey, folks, Insiders is coming up.

But just briefly, I'm Erin Park, host of the new podcast series, Expanse, Nowhere Man.

It's 1999, and a young American man's done something strange, deliberately walking into the great sandy desert on a mysterious quest.

He's been missing a month, and most people think he's dead.

But can an American search team save the day?

Semper Gumby, always flexible.

This looks like a cartoon.

Search expands on the ABC Listen app.

There's been plenty of discussion about what Anthony Albanese got out of his six-day visit to China this week.

The coalition has been critical in parts.

suggesting the visit to the Great Wall and the Pandas was indulgent, also criticising the lack of any firm commitments from Beijing when it comes to not conducting more laps of the Australian continent with its warships and live-firing exercises.

Indeed, some national security hawks are worried the Prime Minister went to China at all before securing a meeting with Donald Trump.

Anthony Albanese, for his part, reckons the trip achieved a great deal.

Stabilisation of a vital relationship, an ability to talk with the Chinese president and the Chinese Premier about these areas of disagreement, and of course, promote closer trade ties.

But what did China get out of all of this?

What did it want to get out of this visit?

How is it trying to capitalise on the turmoil being being created by Donald Trump right now?

And importantly, what does all of this mean for the fate of Taiwan?

That's what I'm keen to explore here.

Welcome to Insiders on Background.

Well, Richard McGregor is a senior fellow at the Lowy Institute, the author of several books on China and East Asia, and a former Beijing and Washington Bureau chief of the Financial Times.

Richard McGregor, welcome.

Hi there.

Good to talk to you again.

Look, I'm keen to start with a sense of what China's trying to do right now.

We are in a fairly unusual environment when it comes to this region and the world.

China put out a very warm welcome, Matt, for the Australian Prime Minister.

We've all witnessed that this week.

How is China approaching other US allies like Japan and South Korea?

They've also had difficult relationships with China over the years, but what are we seeing right now?

Is it similar to how China is treating Australia?

Yeah, well, let me answer that in two ways.

First, let's look at the bilateral part of that.

And there's no doubt that China is investing in Mr.

Albanese personally.

After his resounding election victory, he might be in power for three to six years, certainly longer than it looked like before the election.

That's beyond Donald Trump's second term.

So they are making a personal investment in him.

And you can see that by the amount of time he had with Xi Jinping and the Premier Li Cheng.

And the banquets and the whole.

The whole thing.

And Mr.

Albanese was happy with that investment.

And I guess he would argue he's investing in the relationships with the Chinese leaders as well.

So there's a bilateral element to it.

But I think it's a good idea to pull back a little and look at this in a broader context.

It doesn't often happen in Australia.

And I think

China is obviously trying to present itself in contrast to Mr.

Trump as a stable, responsible

partner and interlocutor, you know, no surprises.

And they haven't always been, but right now, you've got to say, this does look more stable than what we're seeing out of Washington, doesn't it?

Well,

it does.

It's predictable, I guess, whether that's the same thing as stable.

I mean, let's face it, these relationships, and the same applies, by the way, and I'll talk about Japan and South Korea as it does to Australia.

On the one side is the bilateral of the bilateral relationship, is the, you know, the current stability that applies in many ways to Japan and South Korea as well.

That's the variable side of it.

The other side of the relationship is expanding an assertive Chinese power.

And, you know, there's a very obvious symbolic example of that with Australia, with the circumnavigation of the continent and the live fire

exercises.

The same is happening with Japan with patrols around the Senkakyo or Diayu Islands, and the same is happening with South Korea, where China recently erected a rig in sort of waters which are disputed between the two countries.

So yes, China

is

involved in outreach.

Yes, it's presenting itself as stable, but it doesn't change the bigger picture of expanding, assertive, aggressive Chinese power.

And you have to, you know, walk both sides of the street.

I mean, certainly the Chinese are.

And I think that's an issue in Japan and South Korea as well.

That's really interesting.

And I want to come to

what China is doing in terms of, we hear about its military buildup and what that looks like.

And you touch on some of it there and it's more assertive military behaviour in the region but in terms of trade and diplomacy with Japan and South Korea

is it trying to have a warmer friendlier relationship with those countries I mean certainly up to a point now both of those relationships Japan

sorry China Japan China South Korea have their own internal dynamics and complexities particularly Japan because of the history issues the war etc etc

but Japan is in a kind of difficult position at the moment.

The ruling party, the LDP, is quite weak.

The country does not have a strong, consistent leader as they had in Mr.

Abe.

The current Prime Minister faces upper house elections on the weekend, and he may not survive after that.

Well, that's interesting.

So, I mean, some have said the PM should have been going to Japan instead of, or as well as China, over the last week.

That might not have been the best time to do that.

No, he could not have gone to Japan.

They're in the middle of an election season, and the Prime Minister himself, Mr.

Ishiba, might not survive those elections.

That's unpredictable.

So, yes, we need to certainly have outreach to Japan, as we've mostly done on other Chinese trips, trips to China.

Not possible at the moment.

We all have to wait for things to be clarified in Japan.

South Korea is, you know,

also in play, in a sense, at the moment.

You know, they've just had a change change in president there.

They've gone from a right-leaning, pro-Japan, pro-US president to a left-leaning president.

Traditionally in South Korea, more skeptical of Japan and US relations.

But even given that,

you know, South Korea, Japan, Australia, all struggling to deal with Trump, particularly Japan, which is quite bitter about the way current trade negotiations with Washington are going.

Well, they're copying heftier tariffs than we are, right?

Much heftier tariffs than we are, and they're aimed directly at the most important domestic industry, which is car manufacturing or auto manufacturing.

But, you know, even with that sort of growing anger and antagonism towards Mr.

Trump, it's very much like Australia.

Japan, South Korea, Australia, anti-Trump but pro-U.S.

anti-Trump but pro-U.S.

alliance.

And look, they all want the U.S.

to remain committed to this region.

But are there similar sort of doubts in Japan and South Korea as we see in Australia about whether Trump is committed to this region, is committed to defending Taiwan, which we'll come to?

Well, we're all squirming in that respect.

You know, there's absolutely no doubt countries like Australia, like Japan, like South Korea cannot handle China without America in the region.

And America's departure would be absolutely destabilising in multiple fashions.

Obviously, the U.S.

is entitled to make up its own mind and Mr.

Trump has tapped into that sort of disillusionment in the U.S.

with its global role, which he says has meant the country is being ripped off.

But yes, we all have to

find ways to work with Mr.

Trump and his administration

and that may mean concessions of different kinds.

It may mean in Japan and South Korea, once again, they up the amounts of money they're paying towards the cost of U.S.

troops in their countries.

Everybody is going to have to accept one way or another higher tariffs.

I mean, Mr.

Trump, if we're going to boil it down, he wants to charge increase, you know, up the cost for access to the U.S.

market, up the cost for the protection of the U.S.

military.

And I would say for all the chaos, he's probably succeeding in those two aims.

Now, whether that is absolutely corrosive, of the partnerships at the same time is something we're going to see over time.

I mean, he's achieving success on that front with NATO, with the Europeans.

You're saying that when it comes to this region, we are likely to see South Korea and Japan contributing more for that US presence in their countries.

And I guess Australia, the question is, are we going to be contributing more for AUKUS?

Yes, it's not just, I would say the issue with Australia, and in some respects with Japan, is defence spending.

We're pretty familiar, I think, with US requests, demands, however you want to phrase it, that Australia lift defence spending to I think it is above 3%

of GDP.

The same thing has been happening with Japan.

Japan historically post-war spent 1% of the GDP on defence.

They doubled that a few years back to 2%.

The current US ambassador to Tokyo is saying, well, you've got to lift it to 3%.

And then suddenly the Pentagon Under Secretary for Policy, Mr.

Elbridge Colby, said, well, we want it to be 3%, so that Japan feels very battered by sort of different types of requests from Washington and they don't quite know what the settling point is.

So yes, there are demands for increased defence spending, but it's also not quite clear what the U.S.

wants on all occasions.

Yeah, and that name, Elbridge Colby, is also becoming somewhat prominent in the Australian debate as well and questions as to whether he's speaking for Trump when he says various things or whether he's freelancing.

We'll come back to what he's been saying saying about Japan and Australia having to give pre-commitments on Taiwan.

But sticking with China just for a moment, I mean, it's obviously been copying the Trump tariffs.

I saw some figures this week that its economy is actually holding up okay for now.

I mean, it would obviously be worried about where this is going to go, and that's part of the reason why it's courting

trade improvements with countries like Australia, Japan, South Korea, and no doubt everybody else.

How do you think it's approaching?

China is approaching this moment, this moment of Trump turmoil?

You know, I reckon China has been preparing for this moment for many, many years

in a number of ways.

They've been diversifying away from the U.S.

market.

You know, China's biggest bilateral trading partner, if you take into account blocks, is now ASEAN, Southeast Asia.

And I think after that is the EU.

And trade is being increasing to just about everywhere.

So much so, in fact, that the actual tsunami of Chinese exports coming out,

often at what we might call prices which account to dumping or at least below cost,

are affecting many countries which are friendly to China.

And let me give you some examples.

BRICS, which is the so-called alternative to the G7, Brazil, Russia, India, China, South Africa.

Just about every one of those countries is taking trade measures against China.

So they've got real issues about how they can't seem to turn their export machine off.

It's very sort of localized, and they're going to have to talk about restraining their exports soon and also having price controls on electric vehicles in China coming out of China because it's simply too destructive for the global trading system.

So China has been preparing.

Sorry, as in price controls so that they're not too cheap.

Yes, well, China has about 50 to 100 makers of electric vehicles.

Only about four or five of them are profitable, right?

So the price wars in China, inside China on EVs are insane.

And of course, that spills out into the rest of the world, which wants their own industry.

You know, they don't want China to be making everything for them.

And so China is, I think, going to try and pull that back in a little bit.

That's part of being the so-called responsible player.

But industrial subsidies inside China are globally distorting and so it's hard for them to sell everything as win-win.

But certainly as a political entity to deal with, as Mr.

Albanese discovered, China is pretty stable and pretty predictable.

As a sort of global military power, it's not so friendly.

I want to invite you to

get inside Xi Jinping's mind and tell us what's going on there.

Because look, we know in relation to Taiwan, and this is the big issue for the region and big issue for Australia Japan and South Korea we know that you know he has stated his aim for reunification as he puts it he wants his military ready by 2027 which is fast approaching these were all things he said though before the return of Trump to the White House how do you think he and those around him in Beijing are now approaching this question of Taiwan what to do when to do it What's the current thinking there?

Yeah, it's a very difficult question.

I think there's a couple of things.

You know, China,

people in Taiwan do not want to be governed by Beijing.

That's a perennial problem.

They keep voting that way, right?

There's absolutely no political solution to this, and that's China's fault because they've alienated everybody in Taiwan.

They looked at one country, two systems.

That was first made up for Taiwan.

They looked at how it was applied in Hong Kong and they doubled down and said no thanks.

That's the second first thing.

Second thing, Taiwan will not let up.

It doesn't matter China will not let up on Taiwan.

It doesn't matter if Xi Jinping is in power or not.

That will remain an absolutely core objective of the ruling Communist Party, to take Taiwan back.

And then we get to the point, well, how do they do it?

When do they do it?

That's much less predictable.

They don't want to fight a war, even if they're ready to fight a war.

They want to use other methods to force Taiwan to negotiate, quarantine, a blockade.

So I think that's all up in the air.

And of course, there's been a lot of turmoil at the top of the Chinese military with about four out of the top seven officers booted out over the last year over corruption or just disappeared.

Hard to know what that means.

Second point, I think, is Trump himself.

And this is where I think Trump's unpredictability has value, I've got to say, over Taiwan.

And, you know,

he wants to keep...

You know, Trump doesn't care about Taiwan.

He's disdainful about it.

He's put a very high tariff on Taiwanese goods.

He hasn't yet sent a letter to Taiwan.

He has this ludicrous assertion that Taiwan stole America's semiconductor industry, where they built it from the ground up themselves.

Having said that,

I think what we would like to be in Xi Jinping's head is the words that Trump used in a pre-election interview with the Wall Street Journal, where he was asked about whether

China would invade Taiwan.

And he said, there's no way she would do that

because because he knows I'm effing crazy

and and you know and I think maybe the Chinese think that and not without good reason and that's why I think the sort of

I don't know whether I would call it the surgical strike but the sort of singular in-and-out strike on Iran is probably helpful

in that respect because you know people say Trump doesn't like wars for sure but he's happy to use the military at different times but you couldn't you couldn't do that with China it's a a very, very no, no, no, you couldn't do that with China.

And of course, as somebody said at the time, don't think these bombers, B-2 bombers or whatever they were, could fly over Taiwan unchallenged.

They would be.

But having said that,

Trump

is willing to use the military.

He may not step aside.

He demonstrated that.

And look, he's unpredictable.

That's very clear.

I just read

Hugh White's latest quarterly essay, which is a fascinating read.

He argues that the U.S.

has been,

you know,

it started under Biden and it's accelerating under Trump this withdrawal really from Asia.

That Trump and those around him, Mark Arubio has made comments about this as well, is quite comfortable moving towards a multipolar world order rather than a U.S.-led world order.

Do you agree with that, or it sounds like you still think there's this question, Mark, unpredictability about whether Trump would act?

Well, there's an unpredictability about it, and there's also whether, you know, Trump has set the template for future American, you know, Republican administrations.

Does J.D.

Vance care about U.S.

relationships in Asia?

If he were to take over next time, would he withdraw?

Marco Rubio, were he to become president in 2028, has been a hawk actually on Taiwan before he started to behave himself in Trump's cabinet.

So I just don't, you know, it's not, these are...

big, deep relationships that the U.S.

has there.

The U.S.

has more troops in Japan than in any other country in the world.

And there's, you know, people often talk about the so-called Thucydides trap, you know.

Malcolm Turnbull's, you know,

a theory that he would often point out and raise with Xi Jinping when he was there.

The rising power will always run up against the established power.

Okay.

Fair enough.

But there's the other thing Thucydides said from memory, and that is it's not only dangerous to build an empire, it's dangerous to give it away.

And a U.S.

withdrawal from Asia would be destabilizing for China as well.

And so it's not so easy for China just to step in as the regional hegemon,

by the way.

And if Taiwan does resist, do they really want to fight a war?

What would Taiwan look like?

Gaza, Syria?

Would it end up like Northern Ireland?

Or worse, or worse, I mean, again, as Hugh White points out, you'd very quickly, within weeks, get to a sort of stalemate between the U.S.

and China, and then the nuclear threats would start.

That's what makes this a little different to Gaza.

You're talking about two nuclear powers.

Yeah, well, if the nuclear threats start, maybe that's stabilizing, as, you know, because nobody wants to drop the bomb.

But I just think Taiwan is, yes, China has absolutely military superiority over the Taiwan Straits now.

There's no doubt about that.

And in the South China Sea.

But actually executing that against Taiwan...

It comes at a big cost.

It's a potentially massive cost, not just geopolitically, economically.

You know, you cut off Taiwan from the world, you cut off, you bring down the whole global economy, because the whole global economy goes through Japan, South Korea, Taiwan, China.

So what does all this mean for Australia in this debate about what we should or shouldn't do, what we should or shouldn't pre-commit to?

And Elbridge Colby's reported argument that Australia and Japan should give some sort of pre-commitments when it comes to joining a U.S.

conflict over Taiwan.

I mean, it was pretty, it seemed to go down like a lead balloon here in Australia with both sides of politics saying, come on, we're not going to give any sort of future commitment to go to war.

What do you read into all of this?

Yeah, well, I think, first of all, Colby agrees, speaks for Trump on some things.

I don't think he speaks for Trump on Taiwan.

You know, we have to be very careful about that.

The administration does not speak with one voice on China.

There are many different views.

I think Trump and Colby are on the same page about demanding higher military spending.

So

what do we do?

I mean, I think we have to work hard to keep America engaged in Asia.

If you ask me personally I think we should be spending more on defense but we have to spend it well.

That's one of the problems I think about the complaints about the Defence Department.

It's not just about what we do, it's about how we do it.

We have to continue to thicken relationships with friends in Japan, in ASEAN as much as we can, the Philippines.

We have to keep doing the sorts of things that actually Albanese has continued doing from the previous coalition government, AUKUS.

We have

the

patrols off the Philippines with Japan and the United States were involved in that.

China hates that.

And things like the Operation the exercises, Talisman Sabre, those war games.

Yeah, Talisman Sabre.

So we can't have a big U-turn, and I don't think we are having a big U-turn,

even though China might

have a little sniff of that after a six-day trip by Mr.

Albanese, but I don't really think that's right.

So look, just finally then, Anthony Albanese's six-day visit.

Was it a success in your view?

Was it worth spending those six prime ministerial days there in China?

Well it's a very old-fashioned trip, you know, the sorts of trip you have in the 1970s and 80s when you're building engagement and you go to the Great Wall and you do pandas and all that sort of thing.

I think you could have achieved politically what he wanted in two to three days, really.

But he wanted to invest in it.

I think Mr.

Albanese is the key decision-making here.

We'll see whether that plays out over time.

But I don't think we should be fooled that it's going to

eliminate conflict with China.

It's not going to eliminate competition in the Pacific Islands.

It's not going to stop the Chinese Navy continuing to expand its reach

much closer to our shores.

So as long as we're realistic about it, but you only will know whether the China strategy is playing off if you can balance that against the engagement strategy with the US.

And with Trump, that's difficult.

Let's see where we end up there.

Always good to get a reality check.

Richard McGregor, thanks so much for joining us.

Thank you, David.

And if you have any thoughts on this conversation, do drop us a line at insiders at abc.net.au.

We'll have more on this on Sunday morning for Insiders.

Hope you can join us.

We'll talk about the Prime Minister's visit to China and what has been achieved, what it all means for our regional relationships.

We'll be back in the Politics Now feed with another edition of Insiders on Background next week.

Pikach will be back in the feed for a new episode of Politics Now on Monday, the head of the resumption of parliament.

It's going to be a big week ahead.

See you soon.

You're making us all feel very excited about being here.