Editor's note: Lin Duo is a research fellow at the Department for Asia-Pacific Studies at China Institute of International Studies. The article reflects the author's opinions and not necessarily those of CGTN.

Last Friday, Chinese State Councilor and Foreign Minister Wang Yi met with Australian Foreign Minister Penny Wong on the sidelines of the G20 Foreign Ministers' Meeting on the Bali Island, marking the first face-to-face conversation between foreign ministers from both countries in nearly three years. Breaking a diplomatic stalemate, the meeting signaled a cautious reset of China-Australia bilateral relations.

Negative assets from the Morrison government

The culprit of deteriorating China-Australia relations in recent years lies in Scott Morrison government's misperceptions, defining China as a national "rival" or even a threat to Australia's national security. Canberra viewed multiple China-related issues through the lens of a geopolitical competition. On the one hand, Australia has overstated ideological differences between the two sides, imposing restrictions in the name of security upon Chinese investment, being the first to ban Huawei from its 5G network construction. On the other hand, Australia has closely followed the U.S. policy of intense competition against China, hyping up the South China Sea issue and other issues related to Taiwan region, Xinjiang and Hong Kong. It has also made unwarranted accusations against Beijing on topics such as the origins of COVID-19 and its cooperation with the pacific island countries. The former Australian Prime Minister Paul Keating wrote that the Morrison government was "creating an enemy where none exists."

Canberra's moves have dealt strong blows to its own interests and the public perception of Beijing. Notably, Chinese investment to Australia decreased consecutively during Morrison's tenure. The number landed at $585 million in 2021 compared to a high of $16.2 billion in 2008, showing investors were losing confidence in the Australian market. Such a precipitous drop of investment is often irreversible. So is the worsening perception of Australian public toward China.

Effective communication enables cautious but not speedy reset

The wounds will not heal very quickly after the wrestling over the past few years. Fairly speaking, Anthony Albanese government will have some hard time breaking away from the beaten track by its predecessor. A good sign now is that high-level communications between China and Australia have been restarted at a steady pace since Albanese took office. Before the foreign ministers' meeting, the two countries' defense ministers have met on the sidelines of the Shangri-La Dialogue security summit.

At this stage, effective high-level communications can reduce hostility and suspicions, fostering mutual understanding and laying a solid foundation for further ice-breaking steps. Though differences still exist, it's a positive first step to explore common ground for cooperation. At the foreign ministers' meeting, both sides agreed to take the 50th anniversary of the establishment of China-Australia diplomatic relationship as an opportunity to help bilateral ties re-embark.

Canberra can seize the opportunity and act accordingly

The Albanese government has clearly not formed a complete and coherent China policy yet, still making tentative moves with great caution in multiple aspects. Having made some friendly gestures, Australia is still testing China's tolerance for a new government's "unfriendliness." Shortly after winning the election, Albanese flew to Japan for the Quad leaders' summit – a clique that provokes confrontation against China. Later, Albanese attended the NATO summit, which designated China as a "systemic challenge." In some areas, the new government has picked up its predecessor's "China threat theory" narrative. Canberra is also testing the Washington's tolerance for resetting its rigid China policy, looking for room to water down grudges with Beijing to an extent that Washington may acquiesce to. Canberra is also testing the public acceptance to a shifted attitude toward China, juggling the improvement of bilateral ties and avoidance of losing public support.

The common interests between Beijing and Canberra outweigh the differences. China has been Australia's largest trading partner for 13 consecutive years, with bilateral trade climbing from less than $100 million five decades ago to $230 billion in 2021. China has long been Australia's largest export market and source of imports, creating a huge trade surplus and a great number of jobs for Australia. The two countries also have deep human ties. China has remained for years Australia's largest source of tourism revenues and source of international students. Currently, 1.2 million overseas Chinese live in Australia.

With communication channels restored, it's for the new housekeeper of Canberra to seize the opportunity. China is in the position of re-examining, re-calibrating, and reinvigorating ties with Australia. It's imperative for the Australian side to stop regarding China as a "rival" or even a "threat," creating a fundamentally sound atmosphere for stabilizing relationship.

As Senator Wong said, "we have our differences, but it is in both our countries' interests for the relationship to be stabilized." Australia should act in accordance with the claimed willingness, and avoid further vacillation over a rational perception of China. Only in this way can the two countries return to the mutually beneficial track that has underpinned the healthy ties for nearly half a century.

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