An industry networking day in Canberra this week laid bare a simple truth: politics is still beating economics in Australia’s China policy.

Facing a rapidly evolving global economy shaped by technology, competition and complex geopolitics, Australia’s China policy must make the case for engagement – with guardrails.

This week, I attended the Australia-China Business Council’s annual Canberra Networking Day. For more than two decades, the ACBC has brought together miners, universities, agricultural exporters, tourism operators and others who depend on trade with the PRC, with the aim of bridging the gap between commercial reality and political theatre. That gap has, however, never been wider. This year’s theme, Between borders and bandwidth: Innovation, trade and Australia’s economic future, captured the current tension: Can Australia navigate great power competition without compromising prosperity?

The speaker list also reflected this tension. Trade Minister Don Farrell and Opposition Leader Sussan Ley attended. So did Special Envoy for Indian Ocean Affairs Tim Watts, Assistant Minister for Foreign Affairs and Trade Matt Thistlethwaite, Shadow Trade Minister Kevin Hogan and Minister-Counsellor Li Fanjie from the PRC Embassy. All agreed on one point: a healthy Australia-PRC relationship matters for both countries’ prosperity.

Yet agreement on principle masked a deeper problem. Australia’s understanding of the PRC — its language, culture and institutions — is declining. It does not match the scale of bilateral trade. Within the Australian Government, there is recognition of this. As one response to the issue, it is advancing an “ Asia Capability” initiative to rebuild expertise. But capability-building will take years. Politics moves faster. On this point, two moments from the event stood out.

McGowan speaks freely

Mark McGowan led Western Australia for six years. Before that, he spent two decades serving the Western Australian parliament. He knows what demand from the PRC built: jobs, royalties, schools, hospitals. Western Australia ran budget surpluses because the PRC bought iron ore. Simple economics.

McGowan retired in 2023. This matters. He no longer needs votes. At the executive dinner before the formal discussion sessions, his speech drew the most sustained applause of the night – over premium Tasmanian beef. To the ears of the industry-filled room, here was a public figure saying what serving politicians........

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