Background

Australia and China have a relationship fraught with accusations of hacking and subversive activities. Australian support for Taiwan is a major problem in the two countries’ relations. Accusations of Chinese hybrid warfare and state-sponsored cyber attacks targeting Australian companies have become more frequent. After a supposed ‘trade war’ period, the two nations have resumed trade. Despite this resumption, the volume of trade persists at a lower level than seen in previous years. China also regards Australia’s inclusion in the ‘Five Eyes‘ intelligence alliance as a perceived threat to the diplomatic relations between the two countries.

Key Judgement 1. China will likely increase cyber attacks targeting Australian companies and government employees in the next 12 months.

Key Judgement 2. Australian recognition of Taiwan is highly likely to cause rifts in its relationship with China in the next 12 months.

Key Judgement 3. Chinese attempts to expand its Pacific influence is highly likely to cause concern within Australia in the next 12 months.