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My guess:
(1) Change of Aussie government to Labor gives chance for China to ease back on their extreme Australia-bashing trade sanctions without losing too much face.
(2) Things not going so well in China. Zero Covid policy was ruinous and now the 180-degree turnaround is having its own impact. Beijing has to do something to help its economy. Enter Australia. Important middle-level power and major in the region.
ADDED: China trade-sanctioned Australia because Beijing didn’t like that Australia had demanded an international study of the source of Covid-19. The sanctions were to “punish” Australia, and to scare off others. How dare Australia seek to find out the actual, real, source of the world’s most destructive pandemic in over a century? (More evidence, by the way, that China has something to hide, isn’t it? Something like a lab leak?).
Beijing made the now notorious “14 Demands”, which expected Australia to kowtow to the dragon, before they would consider lifting the sanctions. We didn’t kowtow. Beijing blinked.
Some points:
1. The sanctions also harm Chinese companies and consumers. Chinese steel mills don’t import Australian iron ore and coking coal to do us a favour. They import our ores and our coal because they are the best, also the closest and the cheapest. Chinese consumers don’t eat Australian lobsters and drink our wine to do us a favour, but because they like them. Yum! And they are cheap compared to their European or US equivalents. Chinese steel miles and Shanghainese consumers, all got cranky with the government for the “punishment” of Australia. “You’re punishing us too!”.
2. Australia doesn’t rely on China as much as people think. Sure it’s important, mainly as a resources importer and source of students and tourists. But the Australian GNP is only 8.2% based on exports. China is less than half of that. Impact, yes, but not existential threat.
3. The “14 Demands” reflect badly in Beijing. When they went globally viral, they were seen — correctly — as crass bullying. Australia, rightly, rejected them all. We said we’re not going to negotiate under threat. It seems China blinked first.
4. China’s Oz trade sanctions flout WTO rules. (Need to double check)
5. Data tells the story, Australian historical and projected GDP:
Note that Australia experienced GDP drops a decade ago, little to do with China, and yet far greater than the marginal impact of China’s recent sanctions.
