Australia needs to accept the rise of China is ‘legitimate’, former PM Paul Keating says, but this doesn’t mean ‘bending over’

As China’s presence and influence in the Indo-Pacific continues to grow, former Prime Minister Paul Keating says the need for Australia to rebuild its relationship with the rising global power is paramount.

Beijing’s growing influence has drastically altered the landscape of global politics in recent decades, but its tense relationship with Australia remains unravelled.

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Speaking exclusively to 7NEWS Spotlight: ALBO, Keating said Australia needed to rebuild its fragile relationship with China – but highlighted this did not mean “bending over” to demands.

China remains Australia’s biggest trade partner – a relationship Keating says Australia cannot forget.

“They’re never going to be displaced by Britain in any free trade agreement, which is just a joke, or the European Union,” he said.

“The biggest state in Asia is China. The biggest demand for the products we produce is China, and we have to return to a structured working relationship with the Chinese.”

Keating helped organise the first Asia-Pacific Economic Cooperation leaders’ meeting in 1993 to build stronger relationships in the region.

He said it was important for Australia to regain the beneficial working relationship it once had with China, adding that Anthony Albanese’s government appeared to agree.

7NEWS political editor Mark Riley with former prime minister Paul Keating. Credit: Spotlight

“We can’t afford to put all the money on the US. We’ve got to have a working relationship with the Chinese,” he said.

“I think the prime minister and the government understand this, and that’s why I think we are starting to see some thawing in the relationship between the PRC and the Australian government.”

Anthony Albanese’s government has previously said it is in both countries’ best interests to rebuilt their relationship, after years of hostility and trade strikes.

“We believe it would be in China and Australia’s interests for this relationship to be stabilised,” Foreign Affairs Minister Penny Wong said this month. “We are willing to engage.”

China’s President Xi Jinping. Credit: Selim Chtayti/AP

China’s state-controlled media has suggested the new Labor government had presented an opportunity to temper tensions.

The Chinese government broke a more than two-year freeze on contact with Australian ministers to send a congratulatory message to Albanese post-election saying the country was “ready to work with the Australian side to review the past, look into the future and uphold the principle of mutual respect”.

But both sides face significant hurdles to rebuild the relationship.

Building bridges

Asked how to open that door, Keating said Australia needed to accept the fact that “the rise of China is legitimate”.

“What do we want to do, keep 20 per cent of humanity in poverty?” he asked.

“And if the Chinese are out there with rising incomes, and rising influence in their economy and in Asia because of it, what are we to say, ‘this is bad’ or ‘this is illegitimate’, which is really what the Morrison government was saying, effectively.

“We’ve got to turn our back on that. That doesn’t mean to say we have to embrace the Chinese and accept all of their hyperbole but … the truth of the matter is that we live in the East Asian hemisphere. We do not live in the Atlantic.”

Asked how to open that door, Keating said Australia needed to accept the fact that “the rise of China is legitimate”. Credit: 7NEWS

China’s status as a predominant economic and strategic power meant it would have influence just as the US has in the Western hemisphere, Keating said, adding that Australia needed to understand that role.

“If you look at the Caribbean, every state there’s got US fingerprints on it, right? And so I think we have to recognise China’s legitimacy, but at the same time, not bend over every time they want something we think is against our interests.”

As for the Labor government returning to power, Keating said it felt like “a fresh breeze went through the country”.

“This government, the Albanese government will be a more orthodox government,” he said.

“It’ll worry about both sides of the ledger, it’ll worry about receipts and taxation, and it will worry about spending. All this disappeared under those so-called managers of the economy, the Liberals.”

7NEWS Spotlight: ALBO, streaming now on 7plus

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