Australia-China Weekly Brief: September 2026 issues

Past issues

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• September 17 - September 24 2026

  1. Albanese rejects a binary US-China framing of the region

  Prime Minister Anthony Albanese used a September 24 address to the Atlantic Council in New York to describe US-China strategic competition as ‘the most consequential factor shaping the Indo-Pacific’, while saying that it cannot be the sole lens through which the region is viewed.

  ‘The Indo-Pacific is not a chessboard on which superpowers move the pieces,’ he said, adding that regional countries are ‘not spectators’.

  Albanese also described the post-1945 order as ‘no longer fit for purpose’, with assumptions around openness, efficiency and rule adherence increasingly tested.

  The takeaway: Albanese reasserts the government’s vision of a multipolar regional order, even as Australian defence policy continues to reinforce US strategic weight. Canberra’s logic is that stronger US power helps prevent PRC dominance and preserves room for regional states to hedge. The tension is how far US-led balancing can deepen before narrowing that room for manoeuvre. Southeast Asian opinion continues to favour ASEAN resilience and non-alignment over choosing between Washington and Beijing.

  Albanese’s ‘chessboard’ language can be read as an attempt to reconcile deeper US security integration with a regional preference to avoid harder blocs, sustaining strategic autonomy through balance without allowing balance to harden into bipolarity.

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  2. Connected vehicles complicate Australia’s China security settings

  A September 21 Four Corners investigation found that Leapmotor EVs sold in Australia use cameras made by Dahua Technology, whose surveillance equipment was removed from Defence and other federal sites in 2023.

  Home Affairs Minister Tony Burke said the absence of a blanket ban on Chinese EVs did not mean precautions were not in place, while Energy Minister Chris Bowen, who drives an Xpeng G6, said that connected vehicle data risks are not unique to Chinese brands. Separately, BYD amended its privacy policy ahead of the broadcast, removing references to ‘China’ and ‘surveillance’.

  The takeaway: Australia already applies tighter controls to some China-linked technologies in sensitive settings. The Dahua finding instead sharpens the question of whether those safeguards remain proportionate as connected vehicles become more capable and widespread. The challenge will be to distinguish risks common to all connected cars from any additional risks linked to particular vendors, ownership structures or foreign legal jurisdictions.

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  3. Defence dialogue held as Australia and Malaysia align on missile transparency

  Australia and China held their 10^th Defence Coordination Dialogue in Beijing on September 17, the first meeting of the mechanism since October 2024.

  Australia specifically raised concerns over China's recent July test of a submarine-launched ballistic missile. The following day, Australia and Malaysia jointly said the missile test ‘did not meet the region’s expectations.’

  The takeaway: Canberra is seeking to regionalise concerns over PRC military transparency alongside raising them directly with Beijing. Malaysia’s position is notable because Kuala Lumpur does not appear to have publicly criticised the July test when it occurred, giving Australia’s concerns broader Southeast Asian weight and making them harder to dismiss as simply alliance-driven.

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  4. F-35 parts mistakenly routed through Hong Kong

  It emerged this week that a shipment of unserviceable F-35 components sent from Australia to the US was mistakenly diverted through Hong Kong earlier this year.

  Defence Minister Richard Marles confirmed on September 22 that Australia was assisting the US and Lockheed Martin with the investigation, while saying his understanding was that the shipment did not contain technologically sensitive components.

  The takeaway: The incident illustrates the efficiency/resilience trade-off Albanese highlighted in New York. Deeper allied integration gives Australia greater capability but also ties it into logistics networks it does not fully control; tighter safeguards against China-related exposure may add friction, but increasingly form part of the cost of strategic resilience.

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  5. Chinese private demand supports Australian canola’s return to the market

  Reuters reported on September 23 that a private Chinese processor had bought 68,000 tonnes of Australian canola for March shipment. Another private cargo arrived earlier in September, the first known such purchases since Australian canola was effectively excluded from the Chinese market in 2020.

  Beijing began reopening the market in 2025 through state-owned COFCO, before allowing private crushers access in July 2026.

  The takeaway: The purchases point to limited commercial normalisation within a still tightly controlled market. China’s dispute with Canada helped reopen the door, but private Australian buying has continued even after Canadian supply resumed, suggesting Australia is beginning to establish a commercial foothold beyond temporary substitution.

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  6. Other developments: Parliamentary ties, ambassadorial outreach and green iron cooperation

  Parliamentary and subnational ties

  Speaker Milton Dick led a cross-party delegation to the PRC, meeting NPC Standing Committee chairman Zhao Leji and Vice President Han Zheng, while a separate bipartisan delegation led by Senate Deputy President Slade Brockman visited Taiwan. Sydney and Guangzhou marked 40 years of sister-city ties and PRC officials continued outreach in Queensland. The activity adds further density to political and subnational links already restored over recent years.

  Ambassador stresses economic utility

  New PRC Ambassador Liu Jinsong’s first official engagement was with the Business Council of Australia, followed by an AFR piece on climate and disaster cooperation - continuing his predecessor’s emphasis on the practical value of engagement, including in sectors increasingly viewed through an economic-security lens.

  Australia-China green iron research platform established

  UNSW and Chinese partners established a joint platform on lower-emissions iron and steelmaking, giving the PRC’s steelmaking scale a direct role in testing and potentially shaping pathways for Australian green iron technology.

• September 10 - September 17 2026

  1. ICBC leaks show strategic considerations in lending to Australian miners

  Leaked Industrial and Commercial Bank of China (ICBC) documents examined by The Australian Financial Review and the International Consortium of Investigative Journalists (ICIJ) show the bank assessing deals according to their ‘China rationale’ alongside commercial returns.

  Internal documents cited resource security, reducing reliance on dominant commodity suppliers and pricing systems, and promoting renminbi internationalisation. A 2019 BHP loan was approved despite returns below ICBC’s internal hurdle rate, while earlier Fortescue financing was justified partly by its potential to ‘shatter the long-standing duopoly’ of BHP and Rio Tinto in iron ore pricing.

  The disclosures coincide with ICBC reporting a 70 percent year-on-year rise in RMB settlement of bulk commodities globally in the first half of 2026, alongside CMRG’s push for greater use of Chinese benchmarks and RMB settlement.

  The takeaway: The documents show state policy objectives shaping ICBC lending, including below-benchmark transactions. Alongside CMRG’s actions, they point to efforts to reduce the PRC’s exposure to commodity pricing and settlement systems it does not control, although the RMB remains far from displacing the US dollar in Australian commodity trade.

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  2. Rudd identifies 2028 as a heightened Taiwan risk horizon

  Former prime minister Kevin Rudd told the National Press Club on September 10 that he sees a ‘one-in-three’ chance of the PRC deciding to invade Taiwan in 2028, citing PLA preparedness, the risk of Beijing miscalculating US resolve and Taiwan’s 2028 presidential election. He prescribed stronger deterrence, saying Australia should ‘double down’ with the US and other partners.

  Rudd maintained that Australia would retain sovereign choice over participation in any conflict. Shadow Defence Minister James Paterson said involvement would not be automatic. Visiting US congressman Michael McCaul struck a different note, stating that Australian involvement in a US-PRC conflict was effectively assumed.

  The takeaway: Rudd’s assessment underscores a timing tension between near-term concerns over Taiwan and an Australian defence modernisation program extending well into the next decade.

  Canberra would retain sovereign choice, but deeper US integration could make that choice costlier in a crisis.

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  3. Second foreign interference conviction broadens enforcement

  Sydney businessperson Alexander Csergo was sentenced on September 10 to three-and-a-half years’ imprisonment for reckless foreign interference. He is the second person convicted under Australia's 2018 foreign interference laws, after Di Sanh ‘Sunny’ Duong in 2023.

  Unlike Duong’s political influence case, Csergo’s concerned intelligence collection.

  Although much of Csergo’s reporting drew on open sources, the conviction turned on the circumstances of the requests and his awareness of their likely intelligence purpose. Judge Craig Smith noted that while the reports were of little value, the intelligence relationship was valuable.

  The takeaway: The judgment shows that information need not be classified to create criminal exposure. Context, purpose and awareness of the beneficiary can be decisive. This could affect consulting, research and other professional activity where routine information is sought for an intelligence purpose.

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  4. ADF procures China-linked counter-drone technology

  Melbourne-based KeyOptions has supplied counter-drone technology to protect Australia’s main F-35A base at Williamtown that appears derived from technology originally developed and patented in the PRC.

  Its SkyControl system resembles technology linked to Canadian company Skycope, whose Shenzhen-based parent filed Chinese patents covering core jamming and detection technology and had Chinese state-owned investors.

  KeyOptions joined a new ADF counter-drone advisory panel in January and has secured $6 million in defence contracts. The ADF said the systems were ‘designed, assembled and tested in Canada’ but declined to detail their wider supply chain origins.

  The takeaway: The case illustrates the difficulty of tracing technology provenance through complex supply chains. Chinese-linked origins do not themselves establish a security risk, but upstream origins can be obscured across jurisdictions, a particular concern for systems protecting sensitive military assets.

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  5. Other developments – AUKUS, trade and parliamentary engagement

  China keeps up AUKUS challenge as implementation advances

  The PRC again challenged AUKUS at the IAEA, the 24^th consecutive meeting at which it has raised the issue. The safeguards debate was further complicated by US congressman Michael McCaul’s comments to the Sydney Morning Herald that US submarines rotating through Western Australia could carry nuclear weapons, although Australia maintains that AUKUS will comply with its Treaty of Rarotonga obligations.

  Talks have meanwhile moved into practical verification arrangements, while the PRC has yet to build enough support to impede implementation. The eventual Australia-IAEA safeguards model will shape whether the PRC can broaden opposition.

  G’day GBA China-Australia Trade and Economic Exchange in Shenzhen

  The event, held in Qianhai (September 11-13), brought together businesses in investment, health, agrifood and consumer sectors. Framed as a lead-in to APEC 2026 in Shenzhen, it reflects efforts to deepen commercial engagement beyond resources.

  Australian Speaker to lead delegation to China

  House Speaker Milton Dick will lead a parliamentary delegation to China from September 18 to 22. The visit follows Senate President Sue Lines' 2024 delegation and will be the first China visit led by a House Speaker since bilateral relations stabilised.

• September 3 - September 10 2026

  1. US operational capacity in Australia deepens

  Australia and the US have agreed to accelerate US force posture initiatives following Defence Minister Richard Marles’ talks in Washington. The 2026 Marine Rotational Force - Darwin comprises about 2,000 US Marines, while from 2027 HMAS Stirling is expected to host one UK and up to four US nuclear-powered submarines, supported by around 1,200 US military personnel. Marles says the next phase will extend the ‘breadth and complexity’ of cooperation, with details due at AUSMIN.
  
  The takeaway: US capacity to operate from Australia continues to expand. A recent Guardian mapping exercise identified 17 US-controlled defence facilities and US access to 75 Australian-run facilities, while Bandiana is being developed as part of the US logistics footprint. 
  
  Together with submarine sustainment at Stirling, this increases Australia’s operational importance to the US and its potential exposure in any US-PRC contingency, even where deployments remain rotational and subject to Australian ‘full knowledge and concurrence’.

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  2. Domestic politics shape external influence in the South Pacific

  The final Pacific Islands Forum (Aug 31 – Sep 3) communiqué highlighted the limits of Beijing’s regional influence: 16 of 18 members backed concern over the PRC’s July missile test and called for advance notification, although Naoero dissociated itself and Kiribati was absent.
  
  Attention has since shifted to Solomon Islands, where Australia is negotiating a new treaty reportedly backed by more than $980 million in additional funding, including about $94 million for MPs’ constituency development funds. Prime Minister Matthew Wale also survived an attempted no-confidence challenge this week.
  
  The takeaway: The package illustrates how closely Australian and PRC influence efforts can overlap. The A$94 million for constituency funds is sensitive because the PRC has previously backed similar funding, which has faced accountability concerns. Australian participation could blur Canberra’s distinction between its development model and Beijing’s more politically targeted assistance. Wale’s survival may facilitate treaty progress, but also shows how external influence remains mediated by domestic politics.

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  3. Investment screening around prospective AUKUS sites

  The Australian reports that FIRB did not initially assess two property purchases at Port Kembla and Newcastle, both shortlisted for a future east coast nuclear-submarine base. The 220,000sqm Port Kembla site was acquired in late 2024 and the 70,000sqm Newcastle site in early 2025 by companies associated with the family of Wang Yongxin, then-president of the Shanghai Xinyang Chamber of Commerce. 
  
  A 12-month FOI process initiated by former senator Rex Patrick subsequently produced Treasury correspondence confirming the transactions had not been assessed under the Foreign Acquisitions and Takeovers Act.
  
  The takeaway: Chinese private investors benefit from the $1.498 billion FTA-partner threshold for developed commercial land, while foreign government investors and acquisitions of national security land face a $0 threshold. The two sites appear to have fallen outside both categories. Treasury can call in below-threshold deals on security grounds, but the correspondence suggests this was considered only after the acquisitions drew attention. 
  
  The episode could strengthen the case for treating land around prospective defence infrastructure as strategically sensitive before formal selection or designation, potentially narrowing future Chinese property investment around proposed defence precincts.

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  4. Baowu interest tests iron ore politics

  The Coalition has called on the government to block any bid by state-owned China Baowu Steel Group for a stake in BHP’s Jimblebar iron ore mine. Baowu is reportedly considering a 15-25% interest, although no transaction has been confirmed and BHP has declined to rule out a partnership.

  The takeaway: Chinese investment in Pilbara iron ore is not new (Baowu already holds a 46% stake in Rio Tinto’s Western Range mine) but a Jimblebar deal would be politically sensitive given CMRG’s efforts to secure lower prices from BHP. The Coalition is framing the reported stake as a market-power issue: it would give China’s largest steelmaker a direct interest in a major BHP mine while China’s state-backed buyer seeks greater leverage as a purchaser. Baowu would also be expected to face FIRB review, making any formal proposal a test of Canberra’s approach to Chinese investment in iron ore.

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  5. Chinese EVs reshape Australia’s car market

  Battery EVs outsold petrol and diesel vehicles in Australia for the first time in August, with 27,089 sales representing 24.9% of the new car market. Chinese brands BYD, GWM, MG, Geely and Chery together accounted for 26.4% of new vehicle sales, with BYD now Australia’s second-largest brand. Ford is also expanding its electrified range with a hybrid Bronco manufactured in China through its Jiangling Motors joint venture.

  The takeaway: Australia remains an important open market for Chinese automakers. ChAFTA eliminated Australian tariffs on Chinese imports by 2019, contrasting with a 100% US tariff and EU countervailing duties on Chinese EVs.

  Ford’s China-built Bronco shows China’s role extending beyond Chinese brands into Western manufacturers’ production networks. As Chinese market share grows, any future tightening over trade or connected vehicle security concerns would carry greater costs for consumers and Australia’s emissions objectives.

• August 27 - September 3 2026

  1. PIF Leaders Summit fractures over Taiwan

  The PRC strongly objected to Taiwan Foreign Minister Lin Chia-lung’s prominent presence at the 55^th Pacific Islands Forum (PIF) Leaders Summit in Palau, including his appearance at the opening ceremony. PRC Pacific envoy Qian Bo warned of unspecified ‘consequences’. 

  Prime Minister Anthony Albanese rebutted the warning: ‘The [PIF] determines what happens here, not any other country.’ PNG Foreign Minister Justin Tkatchenko, however, called Taiwan’s participation ‘inappropriate’, notable after Port Moresby ordered the closure of Taiwan’s representative office in July.

  Questions over PRC influence were amplified by the absence of the leaders of Fiji, Kiribati, Samoa, Solomon Islands and Vanuatu. Most cited domestic or logistical reasons, but New Zealand Foreign Minister Winston Peters said possible foreign interference was ‘highly suspicious’. Kiribati drew particular scrutiny after President Taneti Maamau stayed away and sent former ambassador to China David Teaabo.

  Australia also used the summit to reinforce its regional role. Pacific leaders endorsed the Waqa Moana security initiative, backed by A$600 million, while Canberra announced completion of the East Micronesia Cable, to which it contributed A$65 million.

  The takeaway: Palau again exposed the limits of Pacific consensus on China, already evident when Naoero and Kiribati blocked a common response to Beijing’s missile test. PNG’s support for the PRC’s position on Taiwan is particularly instructive given the Pukpuk Mutual Defence Treaty entered into force only in July. Close security ties with Australia do not necessarily translate into alignment on China.

  More broadly, the episode highlights the difficulty of maintaining PIF cohesion when members have very different relationships with Beijing. Australia can strengthen its regional position through funding, security partnerships and institutional engagement, but it cannot assume those ties will produce common positions on sensitive China-related issues.

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  2. ARC raises the bar on research security

  Research security drew renewed attention this week after a study of 6,514 Australian Research Council (ARC) grant recipients identified collaborations involving researchers at overseas institutions with defence, intelligence or security affiliations, including in sensitive technology fields. Subsequent reporting focused particularly on China-related examples.

  ARC Chair Peter Shergold also signalled tougher expectations, saying that researchers could no longer claim they were ‘innocently getting into these relationships’. His comments come as the ARC applies a new research security framework with tighter disclosure and foreign interference safeguards.

  The takeaway: Expectations on researchers are becoming more explicit – they are increasingly expected to understand a collaborator’s institutional affiliations and the potential downstream use of their work. For China-related projects, this is likely to place greater weight on counterpart affiliations and dual-use risk, even where the research itself is civilian and legitimate.

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  3. Climate dialogue advances selective cooperation

  Climate Change and Energy Minister Chris Bowen hosted Chinese Ecology and Environment Minister Huang Runqiu or the 10^th Australia-China Ministerial Dialogue on Climate Change on August 27. Talks covered the net-zero transition, clean-energy opportunities and energy security, including maintaining reliable liquid-fuel supplies.

  The takeaway: Climate remains one of the clearest areas where Canberra and Beijing can pursue substantive cooperation. The PRC’s weight in global emissions and clean energy supply chains gives Australia a strong practical incentive to sustain engagement, particularly as it prepares for COP31.

  The focus on energy security also broadens the relationship beyond emissions policy into supply resilience and market stability.

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  4. Other developments – Subnational engagement and practical cooperation

  Commercial, industry and people-to-people engagement continues

  Chinese officials promoted cooperation in green energy, biomedicine and higher-value supply chains, while Beijing-backed initiatives included a September Melbourne trade expo and renewed Victorian student exchanges. A Chinese red meat delegation also completed a week-long WA industry tour under a broader bilateral cooperation program.

  These initiatives suggest Beijing is seeking to continue to rebuild pro-engagement constituencies below the federal level, among state governments, business groups, students and community organisations. That creates a wider set of stakeholders on both sides with an interest in continued engagement, even as tensions persist.

  Flood response tests working-level cooperation

  Flooding along the Nepal-China border left dozens of Australians unaccounted for, prompting Canberra to work with Chinese and Nepalese authorities to establish their whereabouts. As of September 3, 38 Australians had yet to be located.

  The crisis provides a modest test of bilateral consular coordination and information-sharing in a difficult cross-border emergency. Effective cooperation would be a useful, if limited, indicator of functioning working-level ties.