Australia-China Weekly Brief: October 2026 issues

Past issues

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• October 8 - October 15 2026

  1. Australia and China hold senior diplomatic talks in Beijing

  Australia and the PRC held Senior Officials' Talks in Beijing on October 9, co-chaired by DFAT Secretary Jan Adams and PRC Executive Vice Minister of Foreign Affairs Ma Zhaoxu. Discussions covered trade and investment, consular matters, human rights, foreign interference and regional and international security.

  The talks followed previous rounds in June 2025 and May 2024.

  The takeaway: Canberra's explicit reference to foreign interference, absent from its June 2025 readout, suggests a greater willingness to publicly foreground security concerns while maintaining stable relations. This contrasts with Beijing's broader ambition for continued improvement in bilateral ties, although its brief account of the talks offered little insight into its expectations. The potential divergence is between Canberra's apparent satisfaction with managing disagreements and Beijing's desire to move beyond them.

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  2. Alleged Chinese intelligence network targeted Australian officials through LinkedIn

  On October 15, ABC News reported that two LinkedIn accounts linked to an alleged PRC intelligence operation had connected with more than 100 Australia-linked individuals in government, policing and trade between 2016 and 2025, directly approaching 58. Those targeted included an AFP commander and former Queensland premier Steven Miles. The accounts posed as think tank representatives offering paid consultancy work.

  The takeaway: The findings echo a Five Eyes intelligence bulletin warning of PRC intelligence recruitment through professional networking platforms. It underscores the intelligence value of professional networks and non-public policy information, even without access to classified material. The use of paid consultancy offers on professional networking platforms also raises questions about how to identify covert recruitment without discouraging legitimate professional engagement with China.

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  3. Northern Minerals dispute complicates Australia's critical minerals strategy

  Resources Minister Madeleine King said on October 14 that nationalising Northern Minerals remained an option as six PRC-linked investors continued to defy government divestment orders. The investors, holding approximately 17% of the company, were directed to sell their stakes by July 2. King said the unresolved dispute was delaying development of the Browns Range project in Western Australia, a prospective source of heavy rare earths including dysprosium and terbium.

  The takeaway: The investors' repeated refusal to comply with Australian divestment orders has prolonged uncertainty around a strategically important heavy rare earths project.

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  4. New gas reservation legislation puts future Australia-China LNG contracts in focus

  The Albanese government introduced legislation on October 14 requiring LNG exporters to reserve up to 20% of exportable gas for domestic supply, adjusted to meet 110% of forecast demand. Existing export contracts would be protected.

  The PRC Embassy called for equitable treatment of foreign investors and trading partners, while Shell warned of risks to future investment. Resources Minister Madeleine King maintained the scheme would lower domestic prices without compromising Australia's reliability as an exporter.

  The takeaway: Protecting existing contracts limits immediate disruption to Chinese buyers, shifting the potential impact to future supply negotiations and investment decisions. Projected growth in global LNG capacity could strengthen Chinese buyers' bargaining positions, although ongoing supply disruptions, particularly in the Middle East, may constrain alternatives and keep markets tight.

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  5. Other developments: Industrial overcapacity, rare earths, fuel, beef and cultural cooperation

  Australia joins international initiative on industrial overcapacity

  Australia joined 14 other economies in an October 8 call for coordinated action on overcapacity in EVs, batteries, chemicals, semiconductors and solar panels. Although unnamed, the PRC's industrial policies are central to the debate.

  Construction begins at Arafura's Nolans rare earths project

  Construction began near Alice Springs on October 8, backed by $1.2 billion in Australian government support and international financing, underscoring the investment required to diversify light rare earth supplies beyond the PRC.

  China resumes fuel exports following Golden Week suspension

  The PRC resumed refined fuel exports on October 9, easing regional supply concerns, although monthly approvals leave Australian importers exposed to supply and price volatility.

  Beef tariff disrupts trade despite new industry agreement

  Australian and Chinese industry bodies signed a cooperation agreement on October 14, despite the PRC's 55% safeguard tariff on beef exceeding Australia's annual quota. Beef Central reported cold storage pressures forcing processors to cut production days, while The Australian reported Canberra's efforts to secure unused Chinese import quotas from third countries, highlighting limited options before January's reset.

  Beijing reduces EV export tax rebate

  The PRC announced on October 13 that EV export tax rebates will fall from 13% to 9% in April 2027, while combustion engine vehicles retain 13%. Higher export costs could raise overseas prices, including in Australia.

  Ming dynasty statue returned to China

  A bronze Buddha statue found near Shark Bay in 2018 was handed to PRC officials on October 13. Its uncertain origins may be linked to early Chinese pearlers. The handover marks modest bilateral cultural cooperation.

• October 1 - October 8 2026

  1. Beijing raises concerns over Australia’s proposed gas reservation scheme

  The PRC Embassy in Canberra submitted comments on Australia’s proposed domestic gas reservation scheme, stating that previous interventions had ‘affected investor confidence to some extent’. It urged equitable treatment of Chinese LNG importers and investors and warned against undermining Australia's reputation as a reliable supplier.

  An October 1 analysis estimated that Chinese companies earned at least $1.6bn in arbitrage profits from reselling Australian LNG between 2021 and mid-2026, highlighting the commercial value of flexible export contracts.

  The takeaway: The PRC’s reliance on Australia for around 36% of its LNG imports and the scheme's protection of existing contracts reduce the risk of immediate disruption. However, growing global LNG capacity, rising Chinese domestic production and increasing Russian pipeline imports could strengthen Beijing's negotiating position over future contracts.

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  2. Iron ore earnings forecast to fall on weaker Chinese demand

  Australia's Department of Industry, Science and Resources released its September 2026 Resources and Energy Quarterly on October 2, forecasting iron ore export earnings to fall from $123bn in 2025-26 to $107bn in 2026-27 and $79bn in real terms by 2030-31. The decline reflects weaker Chinese steel demand, elevated inventories and growing global supply, particularly from Guinea's Simandou mine.

  PRC Ambassador Liu Jinsong met BHP’s chief executive on October 6 to discuss green smelting and mining technology, amid political scrutiny of China Baowu Steel Group's reported interest in a stake in BHP's Jimblebar mine.

  The takeaway: Weaker demand and rising supply are shifting bargaining power towards buyers, with CMRG's centralised purchasing pressuring Australian iron ore prices. Baowu's reported interest in Jimblebar could further expand Chinese ownership of major Australian iron ore assets, raising questions about the implications for Australian producers as the PRC's purchasing power becomes more concentrated.

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  3. China’s fuel export suspension puts upward pressure on Australian fuel costs

  Chinese refiners suspended exports of diesel, gasoline and jet fuel for October to preserve domestic inventories amid global energy disruptions. Major refiners entered the National Day holiday (October 1-7) without export authorisation outside Hong Kong and Macau, while PetroChina cancelled scheduled shipments.

  The takeaway: Australia was the PRC's second-largest overseas jet fuel customer in 2026 to date and a major diesel customer. While Energy Minister Chris Bowen reported adequate fuel inventories and incoming shipments on October 3, reduced Chinese exports have tightened Asian fuel markets, exposing Australian importers to higher prices even from alternative suppliers.  

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  4. Marles reaffirms defence dialogue with Beijing as Australian naval operations continue

  On October 7, Defence Minister Richard Marles reaffirmed Canberra's desire for ‘the most productive relationship’ possible with the PRC, while acknowledging significant security concerns. Highlighting efforts to rebuild bilateral defence dialogue since 2022, he noted that such engagement ‘doesn't resolve issues, but it does build understanding’.

  The takeaway: Marles' remarks reinforce Canberra's view that productive relations with Beijing need not constrain Australia's regional defence posture. Defence dialogue helps manage security differences without making broader bilateral progress contingent on their resolution.

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  5. Privacy regulator investigates Chinese smart glasses company

  The Office of the Australian Information Commissioner (OAIC) has launched a formal investigation into Shenzhen Qingcheng Future Technology, whose HeyCyan app is used by low-cost smart glasses sold through Kmart, Big W Marketplace and Amazon.

  An ABC News investigation identified more than a dozen security flaws, including data transmission to servers in the PRC and vulnerability to Bluetooth hijacking. Shenzhen Qingcheng has not responded to OAIC inquiries, including concerns about facial recognition capabilities. Retailers have been urged to reconsider sales, while the federal government is considering restrictions in public service workplaces.

  The takeaway: Shenzhen Qingcheng's non-response highlights the difficulties of enforcing privacy laws against overseas technology providers. The OAIC's appeal to domestic retailers offers a more immediate means of limiting consumer exposure, although compliance remains voluntary.

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  6. Other developments: Rare earths, biomedical cooperation and APEC preparations

  Lynas expands rare earths interests in Brazil

  Australian rare earths producer Lynas agreed to acquire Meteoric Resources for $968m, gaining access to its Caldeira project in Brazil, one of the largest rare earth deposits outside the PRC. The deal could strengthen alternative supply chains beyond the PRC’s dominant rare earths industry, although substantial further investment is required.

  Australia-China biomedical cooperation

  The inaugural Australia-China Biomedical Summit took place in Melbourne (October 5-7), bringing researchers together in infectious diseases, cancer, climate change, biomedical engineering and AI. The event illustrates continuing scientific cooperation amid growing research security scrutiny.

  APEC preparations

  Reporting during the week indicated that the PRC was considering changes to the format of November's APEC meetings, including moving ministerial discussions online and omitting the traditional informal leaders' retreat. For Australia, such changes could reduce opportunities for direct regional diplomatic engagement.