Although Australian Prime Minister Scott Morrison has stressed his openness to dialogue for resolving tensions, few observers see a diplomatic breakthrough on the horizon as Canberra and Beijing show no sign of budging on what appear to be increasingly non-negotiable differences, reported South China Morning Post (SCMP).

The tension between the two nations started escalating in 2017 and had come to an abysmally low in the backdrop of Australia’s leading role in the COVID-19 blame against China as the origin of the pandemic, as well as Canberra’s policy to lockout Chinese tech giants such as Huawei from its 5G rollout.

In retaliation, China too restricted Australian imports citing anti-dumping probes and strict quarantines. It accused Australia of discriminating against Chinese companies and cited the example of Mengniu Dairy, which in August was blocked from completing a 600 million Australian dollar bid to acquire Melbourne-headquartered Lion Dairy & Drinks.

Australia sends about 40 per cent of exports to China, with two-way trade in 2019-2020 worth about 240 billion Australian dollars, reported SCMP.

John Power writing for SCMP is of the view that among dovish and hawkish voices alike, there is a growing belief that tensions are unlikely to improve in 2021.

China’s ‘wolf warrior’ diplomacy and the imposition of restrictions on 20 billion Australian dollars (USD 15.2 billion) of Australian exports have prompted Canberra and even the Australia China Business Council to rule out any compromise on core values in the face of perceived bullying and threats, while galvanising calls for international cooperation to counter Chinese economic coercion, added Power.

The view in Australia, increasingly, is that it needs to ‘accept relations with China will not improve in the near term and that we need to take significant steps to adjust’, said Dominic Meagher, visiting fellow at the Australian National University’s College of Asia and the Pacific.

Meanwhile, another scholar Qinduo Xu, a senior fellow at the Pangoal Institution in Beijing, said it was ‘natural’ China would respond forcefully to policies that treated it as a threat, suggesting Canberra’s pandemic inquiry proposal seemed ‘more about politics, more about targeting China’ than an effort to gather the facts.

“It was ‘hard to be optimistic’ about Australia-China relations and that Australian exports would ‘suffer greatly’ in the year ahead if Canberra did not take the initiative to repair ties,” added Xu.

“I tend to the pessimistic that progress will be made, seeing little willingness on China’s part to acknowledge and take seriously the many rhetorical and policy differences between the US and Australia, and Australia’s unwillingness to take seriously how its diplomacy and policy steps have contributed to China forming these perceptions,” said James Laurenceson, director of the Australia-China Relations Institute at the University of Technology Sydney.

Last week, Canberra initiated proceedings against Beijing at the World Trade Organization over its imposition of tariffs that have decimated Australia’s barley trade.