Australia, China and the weaponising of trade

Dec 17, 2020

The conflict between Australia and China worsens with each passing day. The latest piece of news, China’s ‘indefinite’ pause in coal imports from Australia shows just how dangerous is the game that Australia is playing.

Australia’ apparent preparedness to sacrifice economic security now and into the future to better pursue American interests cannot be rationally explained. Our leaders speak about acting in Australia’s ‘national interest.’ How can the possible destruction of an economy, threats and belligerent posturing be in any way in our ‘national’ interest? There is an interest that is being served and it is that of Washington.

President-elect Joe Biden has been making some rather telling comments and making some rather interesting appointments as he readies himself for power. His political strategy and economic plans need assessing, as they have such serious implications for its most faithful and loyal deputy in the Asia-Pacific region.

As Obama’s vice-president, Biden played a major role in the United States shift of policy from engagement with to ‘containment’ of China. He oversaw the ‘pivot to Asia’ strategy which moved massive military power into the region, and which led to the building up of China’s defence capacity. At the same time the Trans-Pacific Partnership, the vast trade bloc that was designed to exclude China was initiated. Virtually all of the players in Obama’s anti-China push are now back in power. Antony Blinken, the choice for the role of secretary of state, is worth considering.

The New York Times recently described Blinken as a ‘a defender of global alliances” and said that he ‘will try to coalesce sceptical international partners into a new competition with China.’ While this may sound innocuous enough it needs to be seen alongside Biden’s recent pledge to spend $300 billion to ensure that China does not get the upper hand in research and development. Speaking to the New York Times Biden promised. ‘to fight like hell by investing in America first.’ He has also declared that he was in no hurry to wind back the 25 per cent tariffs that Trump imposed on Chinese products. Trade has increasingly become a weapon in the American quest to ‘contain’ China.

Biden’s choice of Katherine Tai as US trade representative is another clear indication of an unchanging anti-China policy. Biden praised the record of his choice as America’s chief trade enforcer against ‘unfair trade practices’ undertaken by China and that this would be a key priority for the new administration. Tai’s principal role is to seek to build a global anti-China cabal and to use the World Trade Organisation to exert additional pressure on China. The inference is that a veritable ‘coalition of the economically willing’ is to be set up to force China to play by US rules. This is an extremely dangerous ploy as China will seek to establish alliances, blocs will form, and the world will be facing off to ensure global market share and power.

America, as Biden has loudly proclaimed, ‘is back’ and is in the business of leading the world. It would seem that the Australian economy and the livelihoods of workers are of secondary concern. What is clear is that our political leaders, be they Coalition or Labor, remain in lockstep with the US, regardless of the cost.

One in every thirteen Australian jobs are directly derived from our relationship with China. Thirty per cent of our trade revenue comes from China. And this brings us back to the latest blow; China’s ‘indefinite’ pause in coal imports from Australia. Australian coal amounts to about 5 per cent of all Chinese coal imports and yet about 20 per cent of coal exported from Australia goes to China. Despite this and despite the absurdity of Australia being part of the US assault on China, we seem prepared to be first in this new coalition of the willing.

For America to be ‘back’ and for it to lead the world, China must be not merely ‘contained’ but its economic power ‘rolled back.’ This is the new US doctrine. Outgoing secretary of state, Mike Pompeo made use of cold war language when he set this new strategy in motion, referring to a choice between ‘Communist China’ or the ‘Free World.’ He bluntly claimed that the old paradigm of engagement needed to be replaced by a strategy that would ensure that the ‘free world’ would triumph over tyranny. The sinister nature of these words was dismissed by many. After all these words were uttered by Trump’s secretary of state. Biden, for his part, continually criticised the Trump administration for being too soft on China. Biden has yet to be sworn in and yet we can see the choices he is making, and they do not augur well for the world or the region.

It is one thing to play the bully, to make demands, and to issue threats. The US is, however, threatening an economic rival that would appear to be ready to respond in kind. Australia, by maintaining its dubious reputation as America’s most reliable and steadfast ally, is being swept up in this economic conflict and might well be one of the first casualties along the way. Economic ruin may well lie ahead, regionally and globally. What is even more disturbing is that the US in its quest to remain supreme might well be prepared to send the world to war to prove a point. Australia, it seems is willing to prove a point of its own. Present and future Australian governments, coalition or Labor, would appear to be prepared to accept economic death before dishonouring the alliance.

William Briggs is a political economist with special interest areas in the fields of political theory and international political economy. His latest book, China, the USA and Capitalism’s Last Crusade, will be published by Zero Books in mid-2021.

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