How to engage with China

Jun 18, 2021

The Chinese government’s overriding goals are unity, stability, security, and prosperity. They arose from its “century of humiliation” (1839-1949) when it underwent invasion, addiction, civil war, and destitution. The Great Leap Forward campaign (1958-62) triggered famine and the Red Guard riots (1966-67) destroyed heritage and education. All post-Mao governments have brutally cracked down on internal dissent lest it leads again to fracturing and secession. To outsiders that is intolerable, but most Chinese accept a tightly policed state is preferable to a turbulent and broken one. Also, any visitor to China knows that its people are not dispirited. In failed states, street crime is endemic. In China it is non-existent.

Unlike the defunct Soviet Union, China’s global ambition is not to export an ideology nor to expand its territory (which the West accepts includes Taiwan). It has disputes with neighbouring countries (Japan, Philippines, Vietnam, and Malaysia) over offshore islands and waters, but these do not represent a grand design for global domination. It wants diplomatic respect and commercial cooperation since its prosperity depends on strong multinational relations. Its belt and road initiatives are an attempt to secure friendly land and sea routes to major markets given it is the world’s largest trading nation. Its success in becoming an economic and military superpower has reinforced its faith in a totalitarian model to consolidate its security and to speak with one voice to the world.

There are ultra-nationalist forces within China (like in all superpowers) that could gain ascendancy on a wave of popular patriotism if Western powers blocked China from realising its potential. To date, the CCP has kept a tight lid on jingoism to prevent it spilling over into imperialist ambitions. If the West tries to contain and confront China, it risks tipping its internal power structure towards military hawks at the expense of economic technocrats.

A better strategy is for the G7 is to build a global alliance of democratic countries (say G7+D) that cherish universal human rights and are willing to call out abuses wherever they occur (including within its own ranks) rather than single out China for special opprobrium.

A possible entry-level for such a club might be the 82 nations scored as “free” by Freedom House. On its rating scale another 50 nations are “partially free” and 54 “not free”. Asian countries in the last category include China, Brunei, Thailand, Cambodia, Laos, Vietnam, North Korea, Myanmar, Tibet, and Indian Kashmir. Further afield they include Russia, Belarus, Saudi Arabia, Egypt, Jordan, Iraq, Iran, UAE, Qatar, Oman, Bahrain, Syria, West Bank (occupied by Israel), Gaza and Turkey.

Any G7+D should commit to economic and diplomatic relations with all countries based on non-intervention. That would mean the US not subverting regimes it disagrees with, but instead relying on the alliance to collectively name and shame offenders of human rights and to pursue justice through the United Nations Human Rights Council. Countries that flagrantly ignore its findings and recommendations could then be subjected to diplomatic, financial and economic sanctions coordinated through the G7+D.

The recent G7 meeting of world leaders strove to be the kernel of such a democratic alliance. Its communique recommitted the group to “our enduring ideals as free open societies and democracies, and by our commitment to multilateralism”. In this spirit, it agreed on a shared G7 agenda for global action to:

  • “End the pandemic and prepare for the future by driving an intensified international effort, starting immediately, to vaccinate the world;
  • reinvigorate our economies by advancing recovery plans that build on the $12 trillion of support we have put in place during the pandemic;
  • secure our future prosperity by championing freer, fairer trade within a reformed trading system, a more resilient global economy, and a fairer global tax system that reverses the race to the bottom;
  • protect our planet by supporting a green revolution that creates jobs, cuts emissions and seeks to limit the rise in global temperatures to 1.5 degrees;
  • strengthen our partnerships … through a step change in our approach to investment for infrastructure, including through an initiative for clean and green growth; and
  • embrace our values as an enduring foundation for success in an ever-changing world.”

“We shall seek to advance this open agenda in collaboration with other countries and within the multilateral rules-based system. In particular, we look forward to working alongside our G20 partners and with all relevant International Organisations to secure a cleaner, greener, freer, fairer and safer future for our people and planet.”

The main reference to China in the full 25-page document was Clause 49 which said:

“With regard to China, and competition in the global economy, we will continue to consult on collective approaches to challenging non-market policies and practices which undermine the fair and transparent operation of the global economy … At the same time and in so doing, we will promote our values, including by calling on China to respect human rights and fundamental freedoms, especially in relation to Xinjiang and those rights, freedoms and high degree of autonomy for Hong Kong enshrined in the Sino-British Joint Declaration and the Basic Law.”

Yet the Australian media put a different spin on it:

“G7 delivers for Morrison on China: The G7 economies have taken up the cudgels against China for the first time, in a boost to Prime Minister Scott Morrison’s quest for the West to ‘have Australia’s back’. Mr Morrison’s trip to Britain for the G7 appears to have paid off, with the summit communique pledging to tackle China’s market-distorting economic practices and its authoritarian actions in Hong Kong and Xinjiang.”

But of the G7 members, only America took a hostile approach to China with the other members adopting a more nuanced stance as reflected in the communique itself. On trade disputes, the G7 sensibly decided that the best way to resolve them was to beef up the World Trade Organisation that President Trump neutered by refusing to replace retiring judges on its appellate board. Incidentally, the last time the WTO judged Australia’s behaviour as a trading nation it found it had imposed dumping duties that were inconsistent with its obligations as a WTO member. Importantly its flawed approach also applied to Chinese steel and aluminium products.

There is nothing the G7 can do to dislodge China’s militarized atoll in the South China Sea without triggering full-scale war. China says it needs such a post for forwarding defence against American naval bases in the Philippines. China has one other extra-territorial base to defend and service its trade routes (in Djibouti) whereas America has nearly 800 bases in more than 70 countries and territories.

America’s insistence on its navy having “freedom of navigation” to keep shipping lanes open around China is pointless since it is already in China’s own interests to do so. Also, China recently told ASEAN it wants to cooperate with Vietnam, the Philippines and Malaysia in resolving overlapping claims to the South China Sea. Its motive is clearly to discourage these states from siding with America.

As for Taiwan, one of the most robust democracies in Asia, the G7 has the wherewithal to reinforce the island’s self-defences. But this should be on the condition it remains part of China and not seek national sovereignty. That should assuage China’s fear that Taiwan will win G7 acceptance as a sovereign state the longer it enjoys administrative autonomy.

On the Xinjiang Province and Hong Kong, the G7 cannot grant them freedom because they are an integral part of China. The suppression of Uygur culture and Hong Kong democracy should instead be vigorously challenged through the UN Human Rights Council since China says it recognises only one world order, that decreed by the United Nations. Other orders formulated by former imperial powers (such as the G7) can too easily be construed as “neo-colonial machinations”.

China is very conscious of “loss of face” in its quest for legitimacy in world forums. It quickly folded on the WHO motion to investigate the causes of Covid-19 once most countries supported Australia’s initiative. Australia’s mistake was making that call without consulting China in advance. China thought that was not only discourteous but treacherous since Australia and China had agreed in 2014 that their relationship was a “comprehensive strategic partnership”. Partners are not meant to ambush each other.

If a G7+D was to publish an annual report on the most egregious violations of human rights globally, it would have a greater impact than the individual reports of private groups such as  Human Rights Watch, Amnesty International and Freedom House. To be credible such a report should also call out human rights abuses within democracies (such as Australia’s treatment of refugees, America’s discrimination of blacks, the EU’s tolerance of autocracy in Hungary and Poland, Israel’s unlawful settlement of occupied territories, India’s discrimination of Muslims and Indonesian’s war crimes in West New Guinea).

In such a context Australia’s Prime Minister Scott Morrison would champion freedom not just for China, but equally for 53 other autocratic nations and a further 50 with limited freedoms. That would demonstrate he was campaigning for democracy, not just crusading against China.

A G7+D could also offer sanctuary for prominent democratic activists facing persecution (such as Hong Kong dissidents). But it should be careful not to confuse militant secessionists and sects (like the Uygur Eastern Turkistan Islamic Movement) with democratic idealists. The West made that mistake during the Arab Spring when support for the overthrow of secular dictators resulted in theocratic despots and sectarian violence. Prior to that America’s funding of the Mujahideen to fight communism in Afghanistan saw it morph into the Taliban which hosted Al-Qaeda.

In my view, China’s totalitarian governance model while to date delivering huge economic gains (by crushing opposition to the secularisation of its society and the modernisation of its economy) is not sustainable in the long run. To escape the middle-income trap China must become more innovative which is difficult if contra-ideas and maverick thinking are stifled. Unless China’s living standards keep improving its populace will grow restive.

Allowing China to open to the world through travel, trade, investment, research and other forms of cooperation will make it harder for it to seal off its people from free-thinking and democratic practice. Many Western commentators are frustrated that China has not become politically liberal after 40 years of embracing a bottom-up market economy within a top-down planning system. They are too impatient.

I am convinced that with time China will become freer and hopefully democratic since the more complex its economy and society becomes the harder it will be to maintain central control over every aspect of life even with ubiquitous surveillance devices and personal social credit cards. However, any moves to unfreeze its society must come from within since China is too big, powerful and proud to transform from outside. In any event, past attempts at regime change by the US (e.g., Iraq, Afghanistan, Libya, Cuba and Nicaragua) and its allies dismally failed.

Finally, China is the world’s economic growth engine and decoupling from its market, technology, manufacturers, capital and peoples would consign most developed economies to tepid growth. Engaging with it at a national level in a respectful manner (while at the same time championing all nations’ human rights) should make it possible to not only co-exist with China harmoniously but to interact with it productively.

In fact, that is what most countries do. Our closet neighbour – New Zealand – is a prime example. Singapore also gets on well with China. Its Prime Minister recently told Scott Morrison “You don’t have to become like them, neither can you hope to make them become like you” and that with “rough spots…deal with them as issues in a partnership which you want to keep going and not issues, which add up to an adversary which you are trying to suppress.”

By contrast, Morrison and before him Malcolm Turnbull spearheaded the attack on China. Over the past five years, the Australian government led the world in blocking Chinese technology (Huawei 5G), imports (steel and aluminium products), influence (raided the homes of Australian-based Chinese journalists and cancelled the visas of Chinese scholars), investment (including in a dairy and drinks manufacturer before belt and road projects) and research (by ending University cooperation). Yet it feigned surprise when China in 2020 retaliated by blocking $20 billion of Australian exports of wine, barley, coal, lobsters, timber, red meat, cotton, lobster and timber.

Our bravado in “standing up to China” was bolstered by it having no choice but to buy our iron ore at four times its normal price after mining disruptions in Brazil. But China is now seeking alternative supply sources and once Brazil reopens could spurn Australia further.

Since a third of our exports went to China in 2019 (besides Taiwan we had the largest trade surplus with it) if it continues to treat us as a “hostile supplier” rather than an “economic partner” Australia’s post-pandemic recovery could falter. Then the only way to reset relations might be for a change of guard in Canberra. At that point, corporate Australia could warm to Labor as its best hope.

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