Sameed Basha: Australia needs better terms with China, yet refuses to meet Beijing halfway

Aug 7, 2022
China and Australia parts of flags, painted and smudged.

Australia’s government has rejected China’s proposals for improving ties, claiming to be looking out for its own national interests. In reality, Canberra still views Beijing through the lens of the US-China great power game, which can only hurt its economy while boosting America’s.

The olive branch extended by China has been met with furore in Australia, which had hoped China would lift sanctions imposed on critical industries like barley, coal and fisheries without preconditions. Rebuking China’s list of “demands”, Prime Minister Anthony Albanese has demonstrated his convictions on not meeting China halfway by stating Australia “does not respond to demands”.

After all, what are the demands? In a nutshell, China wants Australia to treat it as a partner rather than an adversary, seek commonalities on issues while respecting differences, respect China’s relations with third-party countries and not sabotage those relations, and refrain from disinformation campaigns in its domestic media against the Chinese Communist Party.

These demands are highly reasonable to an independent observer, given Australia’s forward position against China in the last few years.

It is hard to imagine in the current climate that Xi Jinping addressed Australia’s Parliament in 2014, and a free-trade agreement between the two countries was signed a year later. Exponential growth followed year on year, where in 2017, China bought US$80 billion worth of Australian exports and invested US$45 billion in the country.

That same year, the Turnbull government introduced a foreign interference bill aimed at curtailing external influence, which was then extensively used to target Chinese enterprises and investment in the country. In 2018 the country banned Huawei and ZTE from competing for tenders in its 5G roll-out, despite never verifying claims about spying and surveillance.

Australia then lobbied its “Five Eyes” allies to exclude the company from their 5G roll-outs, influencing the likes of Canada, New Zealand and the UK. In 2020, it went on a diplomatic offensive to pressure the World Health Organisation to bring “weapons inspector-like powers” to investigate the origins of the coronavirus outbreak.

A few months later, former Treasurer Josh Frydenberg blocked China Mengniu Dairy from a US$434 million acquisition of Lion Dairy and Drinks, despite it being approved by the Australian Competition and Consumer Commission. Next, the state of Victoria’s Belt and Road Initiative memorandum of understanding was quashed, followed by a diplomatic boycott of the Winter Olympics in Beijing.

Thus far, China’s only response has been tariffs and sanctions on Australian goods, which it began slapping on the country in 2020.

Australia urges China to respect the rules-based order but do the same conventions apply to Australia when it blocks and revokes Chinese ventures? Are these actions not contrary to the spirit of global trade conventions and protocols?

If one were to say these measures have been taken in the “national interest” to safeguard Australia (as stated by the current and former Australian prime ministers Albanese, Scott Morrison and Malcolm Turnbull). Then China, a sovereign nation, is responding in its national interest by not removing said sanctions without defining the rules of engagement.

Canberra has grossly mistaken rapid developments in the past two decades concerning the Asia-Pacific region. It continues to cling to old models of governance and regulations, which no longer apply to a revisionist power like China. The “demands” are misconstrued in Canberra and seen as dictation rather than a gentlemanly gesture to discuss matters of mutual concern without the influence of a third party.

Currently, there seems to be a blanket of fog around the consciousness of Canberra, which deems itself a knight in the great game between the United States and China, taking great strides to provoke the country. Unfortunately, its mentality is similar to a pawn where it is willing to sacrifice key export markets in its economy to appease its ally that has benefited from its misery.

For example, beef exports in 2019 totalled almost US$2 billion, but tariffs imposed by China in 2020 reduced market share by 34 per cent. To supplement this gap, China turned to the US, where in April 2021, the US beef industry exported US$68 million worth of frozen beef to China, compared to the US$80 million from Australia.

Then in May, it shipped US$90 million of frozen beef compared to Australia’s US$47 million. The trend was similar for Australian barley shipments, where two-thirds of grain exports buckled under 80.5 per cent tariffs, with the void filled by the United States, which then used it to implement phase one of its trade deal with China.

Hence, Australia’s forward positioning makes little sense from a geostrategic and economic perspective. A lack of independent thought in foreign policy hinders recalibration between the countries. Domestic laws like the foreign interference bill combined with security alliances like Aukus and the Quad are bound to further incense the situation rather than ease it any time soon.

The only way forward is to engage in dialogue as an independent-minded country and focus on what is in the interests of the Australian people, who prefer key industries not beholden to the great game transpiring between world powers.

Many had thought the tone from Canberra would change for the better with the election of Labor, but the same playbook is in order, just with a slightly blunt razor. While Canberra seeks a breakthrough to bring some economic relief to its key industries, its fundamental attitude of “it’s not me, it’s you” policy against China creates a never-ending stalemate due to a lack of introspection.

Sameed Basha is a defence and political analyst with a master’s degree in international relations from Deakin University, Australia. He specialises in Asia-Pacific regional dynamics and conflict & security studies

Article first Published: 21 Jul, 2022  South China Morning Post


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