Anthony Albanese in Beijing to Meet Xi Jinping
Beijing sees bilateral cooperation on trade and investment; Washington's AUKUS Review is delayed; Australia's national audit office says Navy can't maintain naval vessels - doubts on SSN AUKUS.
Albanese’s China visit anticipated to unleash potential for bilateral cooperation
By Global Times
Australian Prime Minister Anthony Albanese is set to pay an official visit to China from July 12 to 18, the Chinese Ministry of Foreign Affairs announced.
Albanese’s itinerary clearly indicates Australia's intention to deepen economic and trade cooperation with China, which brings renewed optimism for the future of China-Australia relations. In a global landscape where protectionism is on the rise, collaboration between China and Australia is of great significance to the economic development of both sides, as well as the Asia-Pacific region.
Besides high-level meetings in Beijing, Albanese will visit Shanghai and Chengdu, where he will meet business, tourism and sports representatives and build on Australia's strong economic and trade links with China, according to a media release on the official website of the Australian prime minister on Tuesday.
His delegation will include top executives from Macquarie Bank and HSBC Holdings Plc's Australia arm, as well as from Fortescue, BlueScope Steel, Rio Tinto and BHP Group, according to the Australian Financial Review, which cited anonymous sources.
China-Australia economic and trade cooperation is showing a strong momentum of development. China has been Australia's largest trading partner, largest export destination and largest source of imports for 16 consecutive years. China provides a vast and stable consumption market for Australian minerals, wine, beef, lobster and other products. Also, China has long been Australia's largest source of international students and overseas tourists, according to a recent article published by Chinese Ambassador to Australia Xiao Qian.
What makes Albanese's visit even more anticipated is that this year marks the 10th anniversary of the China-Australia Free Trade Agreement (ChAFTA). Since its entry into force in December 2015, ChAFTA has greatly boosted trade and economic exchanges between the two countries, creating job opportunities and investments in Australia and promoting economic prosperity.
For instance, during an event celebrating the 10th anniversary of the signing of ChAFTA in June, John Brumby, former premier of Victoria, noted that ChAFTA boasts a utilization rate exceeding 96 percent, the highest among Australia's free trade agreements. The agreement not only provides greater certainty and clearer rules but, more importantly, enhances mutual trust.
In addition to traditional areas, there are also broad prospects for cooperation between China and Australia in clean energy, green steel, finance, elder care and high-tech sectors. These emerging fields offer new growth points for bilateral economic and trade cooperation, which could further enhance the resilience and diversity of China-Australia economic ties.
However, even before the anticipated visit, some voices within Australia still attempt to amplify differences. These controversial voices do not represent the mainstream direction of bilateral economic and trade cooperation. It is normal for the two to have disputes, but the key lies in how to properly resolve them.
Take the issue of Darwin Port as an example. Looking back at the history of Darwin Port, the contribution and efforts by China's Landbridge Group cannot be simply overlooked. Whether it was the construction and modernization of the port or its current normal operation, the Chinese company has made tangible efforts and provided strong support for the port's development. Australia is supposed to express gratitude instead of trying to revoke the operating rights of the Chinese company, undermining legitimate rights and interests.
Just as Ambassador Xiao Qian said in May, it is ethically questionable to lease the port when it was unprofitable and then seek to reclaim it once it becomes profitable.
Albanese's upcoming visit is aimed at deepening bilateral cooperation, especially in terms of economic issues and trade, which is undoubtedly commendable. However, it is crucial that such cooperation is founded on mutual respect, mutual benefit, and adherence to the spirit of agreements. Therefore, it is hoped that Australia demonstrates sincerity and takes practical actions to address uncertainties, creating a more stable, fair, and transparent policy environment for companies from both countries.
Anthony Albanese faces 'perilous path' as security and Trump's tariff agenda looms over China trip
By ABC Australia
Prime Minister Anthony Albanese is preparing to fly to China tomorrow for a six-day trip, taking in three cities — Beijing, Shanghai and Chengdu.
Mr Albanese will hold annual leaders' talks with China's Premier Li Qiang, as well as meeting China's President Xi Jinping.
The visit comes at a critical moment, with Australia increasingly uncertain about how to manage Donald Trump's erratic "America First" agenda, while dealing with a China which is both an indispensable economic partner and a looming strategic threat.
So, what will Mr Albanese do in China, and what are the main things to look out for on the visit?
Jobs, jobs, jobs
Whenever the prime minister has talked about this trip there is one word that is close to his lips: jobs.
China remains Australia's largest export market by far, and the economic relationship continues to power ahead in the era of "stabilisation", with Beijing removing all the trade barriers it threw up when the relationship was at its nadir.
Unsurprisingly, Mr Albanese will bring a host of business executives with him, with heavyweights from Australia's financial, resources, agriculture and education sectors all on the list.
As China's middle class continues to swell in size, there are huge opportunities for Australian companies to exploit.
While the government continues to work dutifully on diversifying trade ties, the reality is that there's no ready replacement for a vast and growing market like China.
But there are limits.
While the government is happy to stick with the language of "stabilisation" and "cooperate where we can, disagree where we must", China continues to make it clear that it believes the booming trade relationship should yield more political dividends for Beijing.
When China's Ambassador to Australia made a pitch early this week to expand the free-trade agreement to include more contested fields like artificial intelligence, the prime minister was very publicly non-committal.
While some Chinese and Australian companies are already working together on AI, giving a government imprimatur to that risks drawing the government into much more difficult territory — particularly given the Trump administration will likely be watching closely.
Richard McGregor, from the Lowy Institute, says there's no chance the government will want to entwine Chinese-built artificial intelligence into Australian systems.
"You not only have to use it, you have to use it securely and you have to use it securely in tandem with allies and partners," he said.
"China's not a trusted security partner for Australia, so engaging too much with Australia is really out of bounds."
What's not on the table
That's not the only thing likely to be out of bounds.
While the government has welcomed Chinese investment in many parts of the Australian economy, it's trying to ring-fence some of the most sensitive sectors — including rare earths and strategic infrastructure.
On top of the list is the Port of Darwin — which the government has promised to take out of the hands of Chinese company Landbridge, and return to the control of an Australian company.
China has repeatedly berated Australia for this, effectively accusing Canberra of paranoia and unfair discrimination against Chinese companies.
It's very likely China's top leaders will use their meeting with the prime minister to press him to abandon his election promise.
But there is very little chance of that happening, with the Treasurer Jim Chalmers telling RN Breakfast earlier this week that the government was not for turning.
"We've made it very clear that we will see the Port of Darwin return to Australian hands. That's what we committed to during the election," he said.
"We'll work through that methodically."
Plenty of other disputes will also have to be "worked through" during the prime minister's visit, even if there's little hope of resolution or compromise.
The Australian government remains convinced that China is trying to get a military foothold in the Pacific, while the People's Liberation Army Navy's partial circumnavigation of Australia just a few months ago sent a crystal-clear message to Canberra.
Australia remains deeply worried by China's massive conventional and nuclear military build-up and its threats against Taiwan, and dismayed by state repression in Hong Kong, Tibet and Xinjiang.
Meanwhile, Australian security agencies say they remain locked in a constant battle with Chinese counterparts seeking to compromise the nation's critical infrastructure, and Australian writer Yang Hengjun remains locked up in a Chinese prison, in ailing health.
The prime minister will no doubt raise each and every one of these topics, even if Australia has little pressure or leverage it can meaningfully apply.
The narrow path
None of this means Australia can simply turn its back on China.
As Foreign Minister Penny Wong put it to ASEAN yesterday: "China's size and weight makes it central to solving global challenges, from climate change to global public health, from international trade to the energy transition."
For Australia, climate change is particularly close to the top of the list of priorities, particularly as the government struggles to keep its own commitments to cut emissions.
China is by far the world's largest emitter, but it's also ploughed extraordinary resources into renewable energy production, and now into decarbonising its industrial production.
The government has flagged that the two countries are likely to make at least some announcements in climate cooperation during the prime minister's visit, with Mr Albanese saying there was a "real prospect of further engagement" in green energy.
Caroline Wang from Clean Energy Finance, a think tank, says China leads the world by a "staggering margin" when it comes to many aspects of the energy transition.
"They manufacture 70 per cent of the world's EVs, and 80 per cent of solar panels," she told the ABC.
"In two days in May this year, China installed [the same] amount of renewables that Australia installed in the whole of 2024."
She says that means China will be indispensable to reducing emissions in Australia, and to the government’s ambitions to build its own green industrial capacity through the Future Made in Australia plan.
"We need access to Chinese technology and Chinese industrial capability in order to do that," Ms Wang says.
"That's the kind of pragmatic cooperation that's already happening in other parts of the world and that Australia can look to."
Donald Trump will also be looming behind the prime minister's visit, particularly with Mr Albanese taking political flak for the fact he still hasn't secured a face-to-face meeting with the US president.
Australia wants to make sure the US stays anchored in this region, in order to balance China's swelling power.
But the Trump administration has already shown it's willing to use tariffs as a blunt instrument with allies and partners alike; not just to extract benefits for the US, but also to force other countries to change the way they deal with China.
That's the last thing Australia wants to face.
"Let's not forget we're getting it from both sides," says Richard McGregor.
"We've certainly experienced intense Chinese economic coercion. But we're now about to get that from the United States."
"So it's a very perilous path we have to tread."
And while he's in China, the prime minister will be very careful not to put a foot wrong.
Fate of Aukus nuclear submarine deal may be delayed months as UK and Australia wait on Trump review
Snap Trump administration review of the AUD360 Billion deal announced a month ago expected to extend beyond initial 30-day timeframe.
Australia and the UK potentially face months of more uncertainty over the future of the Aukus agreement, amid expectations a snap Trump administration review of the nuclear submarines deal will extend well beyond its initial 30-day timeframe.
The author of Britain’s Aukus review, Sir Stephen Lovegrove, said both countries would contribute to the Pentagon assessment but warned there was “a way to go” yet before advice to US president Donald Trump was settled.
The start date of the review – which is being led by the undersecretary of defence and Aukus sceptic Elbridge Colby – is unclear, but it is now 30 days since it was publicly announced.
Labor sources agree the review isn’t likely to be completed for months, while a Pentagon spokesperson told Guardian Australia this week there was no public timeline for the work.
Speaking during a visit to Australia as the UK prime minister Keir Starmer’s special envoy, Lovegrove told the Australian Strategic Policy Institute thinktank that Aukus needed strong public advocacy. He suggested Trump and the prime minister, Anthony Albanese, name their own representatives to speak up for the $360bn deal.
He said he did not believe the 30-day timeline was correct, but that it was appropriate for the new administration to assess the agreement entered into by the former US president Joe Biden.
“I think there’s a bit of a way to go,” Lovegrove said.
“I am anticipating that we will be in a position to reinforce and give supportive perspectives to the review. We’ve received messages that we will obviously be consulted. I think Australian colleagues have received very similar messages.
“Aukus needs constant love and attention. It is a huge thing. It is protean and it will change its shape a bit as time goes on, and that is quite right too.”
Ahead of a visit to the Henderson naval base in Western Australia, set to deliver nuclear-powered submarine maintenance, Lovegrove called for better strategic communications to maintain public “legitimacy” for the multi-decade deal.
“As somebody said to me a couple of days ago, ‘you don’t buy a Lamborghini in order to take the children to school’. If you’re going to do something like this, you’ve got to explain why you’re making such a very big commitment.”
An Australian defence department spokesperson said it was “natural” the US would want to examine progress against key milestones and identify further improvements in the deal.
“Australia engages widely and routinely with United States officials on Aukus and alliance matters. Australian defence officials have engaged with Elbridge Colby since his commencement in the Pentagon and we look forward to continued productive engagement,” the spokesperson said.
The foreign minister, Penny Wong, and her US counterpart, Marco Rubio, are both attending talks of the Association of Southeast Asian Nations in Malaysia this week and could discuss the review. They met earlier this month in Washington.
Wong told the meeting Aukus would transparently contribute to collective deterrence in the Indo-Pacific.
“Above all, our objective is to prevent conflict, preserve peace and maintain the agency of all countries in our region,” she said.
“We may be bound by the geography that fate has chosen for us, but we are strengthened by the partnership that we choose for ourselves. And that partnership means leaning in, not leaving it to others.”
Colby’s review could recommend the deal be changed, rather than scrapped, with Australia required to pay more to support US shipbuilding capacity or guarantee nuclear submarines be committed in the event of an American conflict with China.
The assistant minister for foreign affairs and trade, Matt Thistlethwaite, told the ABC that the government was confident Aukus remained strong and would be maintained, despite media “speculation”.
“The defence relationship between Australia and the United States has never been stronger,” he said.
The uncertainty about Aukus comes ahead of Albanese’s visit to China, beginning at the weekend, and amid concerns about Trump’s growing trade war and threats to impose tariffs on pharmaceutical imports to the US.
The White House has already publicly called for Australia to lift defence spending to at least 3.5% of GDP.
Trouble in the Navy’s material world is trouble for Australia’s security - & AUKUS - Strategic Analysis Australia
The 2011 Rizzo Report into Defence’s earlier failures in amphibious ship maintenance shows the current troubles are longstanding.
The Navy is systematically failing to manage and maintain the two largest ships in its fleet – the 27,000 tonne LHD amphibious ships HMAS Canberra and HMAS Adelaide. The scale of the troubles is laid out in a 108 page national audit office report, with almost every page revealing deeper levels of problems and dysfunction.
The problems aren’t restricted to this part of the Navy’s fleet. They have sobering implications for the whole Defence institution and for its capacity to manage AUKUS.
These amphibious ships’ problems have been growing and compounding since 2014, when Defence accepted the two ships from the builder, BAE Systems. Over the last ten years, Defence has shifted contractual responsibility between various companies and also moved responsibilities and authorities around inside its own bureaucracy. The results of all this shuffling and turbulence have been overwhelmingly poor.
Total power failures on the big ships have happened while they were deployed on urgent disaster relief tasks twice – in Tonga in 2022 and Vanuatu in 2023. The poor material state of the ships has meant Navy chiefs were advised that there was between a 97 and 99 per cent chance of a system failure in a number of ‘mission critical systems’ during deployment of the ships. Maintenance has been systematically deferred because of funding pressures, skills shortages, tasks left incomplete and the need to send the ships off somewhere. The backlogs are creating a bow wave of work and expense over the remaining years of the ships’ naval service.
Budgets cash crunch means worse is ahead
More broadly, the Navy’s sustainment of its entire surface fleet is experiencing a cash crunch with budget pressures across Defence growing as the AUKUS and Hunter frigate demands for cash accelerate.
The Navy estimated its urgent sustainment funding shortfall at $500 million over FY 2024-25 and FY 2025-26 and received a boost of $300 million, leaving it $200 million short over two years. The funding crunch no doubt continues beyond this time despite Government protestations it’s funding the capabilities we need.
Flaws in the ships from the time they were constructed by BAE Systems have persisted, with remedial work incomplete when BAE was released by Defence from further contractual liabilities from the acquisition phase years after the ships were accepted into service. BAE promised in-kind contributions instead.
Defence’s oversight and management of the $180 million annual budget for the ships has been deeply flawed for over a decade and shows no signs of improvement. That’s got to be disturbing for taxpayers, because it looks like we’ll be putting $1.9 billion into the sustainment of these two ships over the period to 2033-34 according to Defence plans, and that’s likely to not be enough.
The processes Defence does have to manage the ships and the major contractors doing most of the work are complex, overlapping but partial. They are also disjointed and have not worked. Risks at the strategic level are managed in isolation of risks at the operational and technical levels. No surprise, as there is no clear line of sight between the risks in Defence’s high level sustainment framework for the ships and those being managed day to day.
This is not all able to be laid at the feet of the Chief of Navy, because the byzantine organisational structures and overlapping roles of Defence’s now enormous senior leadership structure – military and public servant – mean no one is in control.
I think the Chief of Navy should be responsible and accountable for the state of the Navy fleet and they should have sufficient authority to give effect to those responsibilities.
That can only happen with a radical simplification of the current Defence structure, starting with stripping back its top heavy senior leadership to something coherent, where a much smaller number of senior jobs have their responsibilities and authorities aligned to outcomes in the real world.
And Defence has failed to provide mandatory periodic reporting on the material state of key systems our military uses, including the amphibious ships, to its Ministers for two years. According to Defence, this was because they were busy developing the Defence Strategic Review and they informed the Minister ‘in conversations’. Not a great way to run a multi-billion dollar enterprise.
I have read many ANAO reports but this one is so tightly packed with descriptions of failures and shortfalls affecting the safety and effectiveness of our Navy’s biggest ships that it is exceptional in a long line of insightful reports. Only the ANAO’s 2023 report on the Hunter frigate scandal comes close in my memory.
The audit’s most damning section is a short one. It’s ‘Appendix 2: Improvements observed by the ANAO’ (grammatically correct as it did find two): “During the course of the audit the ANAO observed Defence update Navy’s Materiel Sustainment Agreement (MSA) with the Capability Acquisition and Sustainment Group and establish an interim MSA with the Naval Shipbuilding and Sustainment Group.” That’s it, set against 100 pages of disarray.
A benchmark for actual disclosure and improvement
Without the ANAO, we would hear nothing about these long standing, persistent deep institutional problems and the poor use of billions of dollars of scarce taxpayer money by Defence and the companies it has contracted to sustain the ships under its authority and oversight.
Instead, we would have the responsible ministers expressing their full confidence in the professionalism and competence of senior Defence leadership and claiming they can provide no information because of operational or security concerns. A sprinkling of claims of commercial in confidence matters would close the information tap completely.
So the ANAO report shows what the public can know when a government organisation understands its obligation to inform the public about its work and is not focused mainly on avoiding embarrassment by revealing shortcomings. Instead, disclosure means problems can be addressed and prevented.
It sets a standard for disclosure that Defence can – and should be required by its Ministers – to meet.
Everything that was bad in 2011 remains bad in 2025
Beyond the reams of detail set out by the ANAO about how Defence, the Navy and the companies they contract are failing in ways that affect mission success when Navy ships are deployed by the Government, there is a wider and deeper issue.
This same class of Navy ships – the amphibious class – has experienced the same systemic mismanagement and failure of technical and leadership capacity before, just over 14 years ago. Back then, the then Chief of Navy sent a brief note to the Minister for Defence in the lead up to Christmas to let him know that none of the Navy’s three amphibious ships were in a state for them to be available for disaster relief operations over the peak cyclone season Australia and the South Pacific were just entering.
This brief note did not leave the then Minister expressing full confidence in Defence and its leadership. It triggered a forensic external inquiry into the state of the Navy’s technical workforce, contractual arrangements for ship repair and maintenance and basic approach to ensuring its fleet was seaworthy – the Rizzo review that reported in 2011. It also led to that Minister directing Defence to urgently buy a new large amphibious ship, HMAS Choules, so that the Navy could actually do what the Government had thought it already could.
So, it’s beyond disturbing that the same issues are back again, joined by new ones – and they have been present for the entire ten year service life of our two biggest Navy ships to date.
Implications for the Defence institution
The obvious question is how the poor management of government resources – money, people, material and time – that is laid out in such stark detail at such length could be isolated to just the Navy’s big amphibious ships.
The same people and processes are used across the whole of Defence and each of the three Services – with some exceptions like the Air Force’s superior approach to airworthiness. And it is these people, using these flawed process, without a clear line of sight to real world outcomes who are responsible for equipping the young men and women on the frontline of our nation’s defence with what they need to ensure our security.
Implications for AUKUS and Australia’s capacity for ‘nuclear stewardship’
I wonder how a forensic technical report by an outfit like the ANAO – or a highly reputable figure with experience from the corporate world like Paul Rizzo – into the workings of the new but troubled Australian Submarine Agency (ASA) would compare to the ASA review commissioned by Richard Marles. Maybe we are now in Royal Commission territory given what’s at stake.
These paths would probably be quite different to the kind of review we might expect a former Mandarin with highly developed political antennae like Dennis Richardson to produce in the hot house environment created by the US review of AUKUS. When the ASA review is released publicly by Richard Marles we may find out.
I also wonder if the Pentagon has noticed this ANAO review of how our Navy manages large surface ships and is drawing any conclusions about what this might mean for Australia’s capacity to be effective stewards and managers of nuclear powered submarines.
The builder of the UK’s submarines, BAE, has described nuclear-powered submarines as more complex than the US space shuttle – so they will require the highest levels of competence and technical skill to operate and maintain. That requires a much higher benchmark from our Navy and Defence than it’s setting with the amphibious ships.
Richard Marles is right three years into his leadership of the Defence portfolio to now begin to focus on the quality of how our defence institution and its senior leaders spend $59 billion of our public money annually in providing for our nation’s defence.
He should start by reading this ANAO report, then calling the Chief of Navy – and finding another Paul Rizzo or a Royal Commissioner like Justice Hope.