Australia-China Weekly Brief: September 2026 issues

Past issues

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• 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.