06.01.2021 Author: James ONeill

Australia-China Relations Set for a Long Period in the Wilderness


China is, and has been for many years, Australia’s most important trading partner. Up to the end of 2019, China took nearly 40% of all of Australia’s exports. It is not a trading relationship that any sane country would really jeopardise. Yet that is precisely what the Australian government has been doing, and under the present political leadership the antipathy to China has been growing.

To absolutely no one’s surprise the Chinese have begun to retaliate, progressively increasing either the outright banning of Australian goods, as has recently happened with coal, or placing prohibitive taxes on a variety of Australian exports such as wine that renders them virtually unsellable in the Chinese market.

At the present time, commentators on the situation take one of two views: this is a problem that could be fixed; or Australia doesn’t need the Chinese market and the country is better off selling its goods elsewhere. Neither of these options is particularly realistic.

To take the first view first. In theory the problem could certainly be fixed. It has arisen because of the profoundly stupid remarks of the Prime Minister Scott Morrison in addressing the outbreak of the coronavirus that has had such a devastating impact on world trade over the past nine or so months.

Morrison openly questioned the role of China as a source of the pandemic. Such a view was, to say the least, significantly ill-considered. Even were it true that the virus had commenced in China, which was what underlay Morrison’s remarks, it was a singularly inapt comment to make. That Morrison was undoubtably acting as a mouthpiece for the Americans, whose President made no secret of his view of the origins of what he called the “China virus,” was singularly inept.

What recent research shows is that the virus actually began months before it appeared in China and could more accurately be traced back to Spain, Italy or the United States itself.

China was understandably furious at Morrison’s imputation, and begin a progressive scaling back of its Australian imports at that time. Those who believe the problem can be fixed suggest that an apology from Morrison would go a considerable distance toward undoing the damage. I respectfully disagree. There are a number of reasons for this disagreement, not the least of which is that Morrison’s views are widely shared among his political colleagues. An apology is therefore highly unlikely.

A more important reason is that in carrying out the wishes of the Americans in making his initial inflammatory remarks, Morrison was doing no more than being a good errand boy for the rabidly anti-China views of the American political hierarchy.

It is one of the bitter ironies of the trading consequences of Morrison’s ill-judged remarks that it has been the Americans who have stepped in to sell their agricultural products previously sent by Australia to China. There is a valuable lesson to be learned from this exercise, but the Australian political leadership shows no signs of having learnt from these experiences.

This may also reflect to a considerable degree the progressive assimilation of Australian foreign policy into a United States view of the world. They seem increasingly incapable of expressing an Australia view, a trend that has been apparent for at least the past 70 years as evidenced by continuous involvement in United States wars of choice. It is impossible to perceive any substantial changes in this attitude among the Australian political class, regardless of nominal party affiliation.

The second option is equally unrealistic. It has taken Australia 30 years to build up its reliance upon Chinese trade. While some alternative markets may be found for some goods quickly the reality is that there is no market anywhere else in the world that is remotely the size of China, and that is not just a function of size. India is rapidly drawing closer to China’s population, but its per capita income is only about 1/7th of China’s and unlikely to improve significantly in the foreseeable future.

Other decisions taken by the Australian government show an equally poor sense of realism and again most probably reflect the United States view of the world being faithfully replicated in Canberra. One such illustration is the decision to freeze out the Chinese mobile telephone option of Huawei. Again, this is best interpreted as adherence to the United States view of the world rather than rational self-interest.

The nominal accusation is that the Chinese product is not secure. This is apparently not a problem for more than 150 nations around the world, including several European countries whose security concerns are surely no less than those of Australia.

In a recent conversation between former Australian Prime Minister Kevin Rudd (a fluent Mandarin speaker) and Chinese foreign minister Wang Yi, Mr Wang declared that the ball was in Australia’s court. The Chinese government had released to an Australian media outlet a list of 14 grievances that China had with Australia. Predictably, the Australian response had been that the grievances were unfounded and rather than blaming Australia, China should look to its own behaviour.

Such a response was neither helpful nor accurate. In his conversation with Mr Rudd, Mr Wang did not refer to the list of grievances, but rather chose to adopt a conciliatory approach. You said that Australia needed to decide if China was a threat or a partner. If Australia perceive China as the latter, rather than the former, then there was, said Mr Wang, “better chances that we find solutions.” He put the onus for improved relations fairly in Australia’s court.

The response of the Australian commentariat to Mr Wang was inevitably predictable, choosing to downplay any suggestion of real conciliation with China, and referring instead to a list of alleged wrong decisions by China in the South China Sea, intelligence spying and the alleged ill-treatment of the Uighur population.

There is scope for argument on all of these assertions, but one point stands out. There is never any criticism of vastly worse United States behaviour, none of which affects in the slightest trade between Australia and the United States. Worse, Australia is an active participant in United States aggression, whether it is in the Middle East, Afghanistan or anywhere else in the world, in which Australia does not just support but actively participates in.

One is therefore forced to conclude that the more gloomy view of future China – Australia relations as recently espoused by Dan Hu most probably the more realistic view. The myopia shown by Australia will prove to be to its detriment.

James O’Neill, an Australian-based former Barrister at Law, exclusively for the online magazine “New Eastern Outlook”.

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