Australia’s Trade Beef with China

This is turning into more than just a trade spat

By: Murray Hunter

While there is growing pressure in Australia for a hard-line approach to Beijing’s retaliation against Canberra’s calls for an investigation into the origins of the Covid-19 pandemic, the country, through trade, student links and its own appeasement policies have made a robust response difficult.

The Australian media has been hyping “China-phobia” over Beijing’s import bans on beef produced at four abattoirs along with tariffs on Australian barley, and a refusal by Trade Minister Simon Birmingham’s Chinese counterpart to take his calls. Tensions have continued to rise with support by 120 countries for Australia’s call on the World Health Organization’s director-general, Tedros Adhanom Ghebreyesus, to initiate the international review of the lessons learned from the international health response to Covid-19 at the World Health Assembly.

That has given Australia a sense of vindication despite an email statement by the Chinese Embassy that Australia’s call for an inquiry “is nothing but a joke.” Thus Australian political commentators are warning that the Australia-China relationship is fast falling into hostility amid unsubstantiated reports that China is planning to impose more tariffs on Australian goods in the near future.  

In fact, there are grave concerns from many sections of society that China has encircled Australia. Concerns include the buying up of strategic Australian assets, donations to political parties, spying on students by the Chinese diaspora, the suppression of free speech on Australian university campuses through strongarm Chinese tactics, the use of Australian-generated intellectual property for Chinese military and surveillance development, China’s control of Australian Chinese-language media, undue influence on local government decisions, former Australian politicians acting as consultants to Chinese firms and government, and the alleged infiltration of the Australian parliament of a person with potential loyalties to China. There have even been calls that the Australian government cancel the Chinese-owned company Landbridge’s lease of the Darwin Port.

Outside Australia’s doorstep, there are additional concerns about China’s growing political clout in Papua New Guinea and other Pacific islands like Vanuatu, where there is fear and speculation China may build a military base. The implementation of new Chinese security laws in Hong Kong which destroy the concept of one country two systems, Chinese military expansion within the South China Sea, with the building of potentially armed islands, and maritime altercations with the navies, fishing vessels, and oil exploration vessels in disputed territories are all being perceived as a quickly escalating threat.

Australian defense capabilities are now only coastal and continental based, having long given up its position as a middle military power, impelling China’s Global Times to call Australia “a giant kangaroo that serves as a dog to the US, and will hit a deadlock with China on trade disputes.” Australia has always been reliant on US defense forces for protection – and more so, now that Australian military forces eliminated their projection capabilities with the retirement of their aircraft carrier decades ago.

This was fine with the Obama administration’s “pivot to Asia,” but the Trump administration has tended to withdraw from the Southern Pacific region, refocusing on Northeast Asia. Trump’s quick withdrawal from the Trans-Pacific Partnership omnibus trade agreement soon after his inauguration as president cost the US prestige in Southeast Asia, particularly the ASEAN countries.  

Given Australia’s superficial relations with most Southeast Asian nations, China senses opportunity in Australia’s weakness. The symbolic entry into Sydney harbor of three Chinese naval ships on the anniversary of the Tiananmen Square massacre last year was symbolic of China’s new-found military confidence within the region.

Chinese Premier Xi Jinping has built upon the narratives of the Patriotic Education Campaign of 1991, using rhetoric that China suffered a century of humiliation at the hands of foreign powers, until the Chinese Communist Party led the fight against the corrupt, culminating in the birth of the People’s Republic in 1949. Xi has also reframed communist doctrine from internationalist narrative to staunch nationalism – China against the rest of the world, with the revolutionary words of ‘struggle’ and ‘self-sufficiency’ forming the basis of the new strategy.

The aim of China is to reassert itself into a dominant world power through what Xi calls the Chinese dream, a national strategy to restore China to its historical glory, dislodging the US as world leader. The world saw the early signs of this with the impassioned patriotic frenzy at the Beijing 2008 Olympics. It can also be seen within the young Chinese diaspora on Australian university campuses, similar to the radical students of the cultural revolution, fighting against anything they perceive as being anti-Chinese.

The Belt and Road Initiative is state capitalism designed to build a logistical and influence-based network across the world to benefit China and squeeze out the US. China’s aggressive annexation of coral reefs and small islands within the South China Sea can be understood through these narratives. This is only part of the strategy towards the overall goal of seeking economic domination, not through direct military confrontation, but by utilizing a host of non-military means to achieve what could be called “non-conquering dominance”.

The development of Chinese influence in Australia has been gradual, beginning by chance when former Prime Minister Bob Hawke allowed 50,000 Chinese to remain permanently in Australia after the Tiananmen Square massacre. This created a useful diaspora for the Communist Party, as it was unknown at the time that many were members of the CCP and People’s Liberation Army and were either loyal to China or through coercion have assisted China’s needs.

Then came the minerals boom. Chinese ploughed investment into the mining and agricultural sectors. In 2014 and 2015 Chinese interests purchased 99-year leases for the Ports of Newcastle and Darwin respectively. China funded the setting up of Confucius Institutes at Australian universities and appointed Australian ex-politicians as consultants and lobbyists. Chinese nationals bought up real estate across the country while Australian manufacturing moved en masse to China, making it a major source of Australian products.

The United Front Work Department, under the direct authority of the central committee of the CCP, is very active within Australia, controlling Chinese language media, Chinese cultural and business organizations, student associations, and uses business elites to develop relationships.

With 25 percent of its trade with China, with many universities reliant on Chinese students, with primary producers relying on China as a market, and Australian manufacturing captive in China, with various levels of government the target of influence-seeking activities, Australia has primarily used appeasement as its diplomatic strategy.

China presents three specific issues: military and diplomatic expansion throughout Southeast Asia and the Pacific, infiltration into Australian politics and society, and the management of the Australia-China relationship for Australia’s benefit.

China’s insistence of sovereignty along the nine-dash line is bringing much concern to the littoral nations along the South China Sea, with each involved in some sort of altercation with China over the past few months. Not only has China been much more aggressive, but the Chinese naval build-up is quickly turning China into an unassailable regional force.

Australia has two specific problems with this. First, since the decommissioning of the aircraft carrier HMAS Melbourne in 1982, which was ironically sold to China and studied to assist in the development of Chinese carriers, Australian military forces have extremely limited capacity to project any significant presence away from Australia’s north coast. Its Attack-class submarines are not due until the 2030s, and the RAAF only has six KC-30A Multi Role Tanker Transport aircraft.

However, this is not Australia’s biggest problem. Its traditional focus on the US alliance since the Howard government cost the nation its own individual identity within the circle of Southeast Asian nations. Unfortunately, many neighboring government bureaucrats and politicians sense an Australian sense of superiority, which still exists within some parts of the Department of Foreign Affairs and Trade. Australia’s relationships with most of its neighbors within both Southeast Asia and the Pacific have tended to be transactional at best. Many countries just don’t feel they are accorded the respect of being considered equal partners in their bilateral relations. In addition, the regional Australian business presence is relatively poor, and military cooperation on the decline. Long gone are the days when the Royal Australian Air Force operated the Butterworth base in Malaysia, stationing squadrons of fighter and bomber aircraft. Today there is only a token presence. With the exception of Singapore, Australia doesn’t have strong intelligence cooperation.

It’s here where Australia must loosen the alliance with the US and develop new regional military alliances where there are more immediate and direct common interests. Closer military cooperation within the region is the best way Australia can create a meaningful buffer between forces deployed within the South China Sea and home.

There are no quick solutions. Ex-Australian leaders must be forced to put Australia’s national security before their own personal interests. Canberra must diversify trade relations and find new markets to decrease the importance of any one trading partner. It must work through a grouping of middle political and trade powers, so there is a critical power mass that the super-powers will take very seriously. Australian universities need to examine their sizes and consider the concept of downsizing and becoming less dependent on foreign students, particularly post Covid-19.

Canberra must handle relationships with China in a way that Australia is perceived as an independent nation and opinion leader. International issues must be approached together with like-minded nations for strength. There are a large number of diverse nations that can fit that criteria. Australia must not be perceived as being tied to the coattails of the United States. An ally yes, but not unquestioningly. This has hindered close ties within the immediate region.

Appeasement doesn’t bring respect, and the Australian public may no longer accept an appeasing federal government. Chinese diplomatic narratives indicate China has lost respect for Australia. Australia must recreate a position of strength with an independent, innovative foreign policy that reflects the aspirations of the region. This was talked about 30 years ago but the US alliance prevailed with the advent of the Gulf Wars and the war on terror. Defense policy must be reframed towards protecting the country with non-military strategies, and consistent with foreign and national security policies. Crisis brings opportunity. It is now time for Australia to redefine its positioning.