The downward spiral in Sino-Australian relations can be traced back to the last few years, with the worst clash between the two countries taking place in 2020.
A bilateral agreement has a role to play: The China–Australia Free Trade Agreement (ChAFTA), which was signed on June 17, 2015, and saw 95 per cent of Australian exports to China made tariff-free. However, concerns arose over Chinese involvement in 5G technologies, with fears of security vulnerabilities. Adding to the strained relationship, the Australian government announced tougher rules on foreign buyers of agricultural land and electricity infrastructure.
What followed in 2020, alongside the pandemic, only added fuel to the fire. In March 2020, concerns over the pandemic-induced economic slowdown grew, as did fears about buyouts from outside. The Australian Border Security Force intercepted a shipment of faulty masks and personal protective equipment from China. Australia, under Prime Minister Scott Morrison, later called for an inspection into the outbreak, suggesting that WHO needed tough "weapons inspector" powers to investigate the cause of the outbreak. A few days later China blacklisted 35 per cent of Australia’s beef exports.
On May 19, later in the month, an 80 per cent tariff on barley imports from Australia was enforced. The move was not much a shock as it was expected when barley imports from the US were unfrozen the week before. A week after the ban, the Chinese government warned Australia to “distance itself from the USA”, after which they accused the US of pushing a “new Cold War” saying any support the Australians show would end up in a “fatal blow”.
China also denied an alleged spate of cyber-attacks in June. These events were followed by an increase in racial discrimination and violence through a series of attacks on Chinese and Asian people in Australia.
November saw "anti-dumping" tariffs ranging from 107.1 per cent to 212.1 per cent on imported wine from Australia and later in December, coal imports were fully blocked. Federal Foreign Minister Marise Payne on 21 April 2021 announced that Australia would be cancelling its agreements with the The Belt and Road Initiative (BRI), a dream project of the Communist Party of China. The global infrastructure development strategy with overland routes for road and rail transportation through landlocked Central Asia. The Road here referred to the Indo-Pacific sea route. Countering this initiative, the Blue Dot Network was introduced with the US, Japan, and Australia as the stakeholders.
June 2020 saw Australia’s open opposition to the Hong Kong national security law which resulted in the extradition treaty with Hong Kong being suspended. In November, the Chinese embassy released a list of fourteen grievances ending with the incident where the Chinese foreign ministry spokesman said, "China is angry. If you make China the enemy, China will be the enemy." The official also added that if Australia backed away from the policies on the list, it would be "conducive to a better atmosphere" which Australia deemed an open threat.
Relations continued to sour after a Chinese political cartoon invoked a storm, prompting Australian Prime Minister Scott Morrison to demand an apology. In a reference to the Brereton Report alleging Australian war crimes in Afghanistan, Wuhe Qilin’s had created an image of Australian soldier holding a bloodied knife against the throat of an Afghan child.
Often, some of the smaller Pacific Island Countries get caught in the middle of the rift between. For years there has been a tiff between Australia and China that have had its repercussions on the 14 island nations. One such was the Papua New Guinea with the vaccine roll-outs. With Australians offering full-fledged support, the Chinese state-run news tabloid, Global Times accused them of sabotaging Chinese vaccines. This island holds special interest for both countries because of its positioning between Asia and America. With regards to the vaccine roll-outs, China's 300,000 vaccine donations to the Pacific were less than Australia's nearly 600,000 dose donations, with Canberra having promised 15 million doses more. It did not help the fact that the offered Sinopharm vaccine from China was not approved by the World Health Organization. By the time it was approved in May, the AstraZeneca vaccine provided by Australia has already been given out. 270,000 vaccines from China have been rolled out to the Solomon Islands and Vanuatu along with Papua New Guinea as per the research by an analytic company Airfinity which combined is less than Australia’s contribution.
Apart from all these, the falling-out between the two nations had been taken up by the Five Eyes—an intelligence-sharing arrangement between the US, UK, Canada, Australia, and New Zealand, dated back to the cold war. In response, the Chinese foreign ministry spokesman Zhao Lijian said China would not flinch if trouble came its way. "No matter how many eyes they have, five or 10 or whatever, should anyone dare to undermine China's sovereignty, security and development interests, be careful not to get poked in the eye".