China’s Australia Beef Ban Part of a Larger Assault on Rivals

Dispute plays into Washington’s eclipse against Beijing

China’s rising international clout – and the US’s relative weakness – has played out this week with an ugly move by Beijing to suspend significant beef and barley imports from Australia in an attempt to force Canberra to withdraw a proposal to the World Health Association for an international investigation into the origins of the Covid-19 pandemic.  

The move comes at a time when China-watchers say tensions between China and particularly the United States basically make Australia, which is losing US$3 billion in annual beef exports, a sideshow to a larger struggle. Tensions have reached the highest level since the 1960s, with the US regularly sending US 7th Fleet ships on freedom of navigation missions into South China Sea waters that China claims as its own. The US missions, while provocative, in reality demonstrate just how frustrated US officials are over vain attempts to budge the Chinese off islands in what have been ruled to be international waters by an international court.

The US and the UK have backed Australia’s request for a probe into the coronavirus outbreak, which would include sending international inspectors to Wuhan, the presumed epicenter. That has Chinese officials charging Australia is only a proxy and accusing the administration of US President Donald Trump of using it to attempt to blame China for the pandemic to distract from its own spectacular failure to control infections. Trump and Secretary of State Mike Pompeo, along with other US officials and Republican Party leaders, have blamed China for the outbreak, with some officials calling for reparations.

It isn’t the first time China has used its economic muscle to browbeat countries for political reasons and, as Beijing learns there are few countervailing forces to block it, there are likely to be more. Soft power, never adroitly wielded by China, is likely to diminish in the face of hard power.  In March 2019, it used technical requirements to block imports of canola oil from Canada’s largest exporters after customs officials detected “harmful pests.” Canada earlier had acted on a US request to arrest Meng Wanzhou, the chief financial officer of the Chinese technology giant Huawei, an accusation the Chinese government denied.

In 2010, Beijing restricted imports of Norwegian salmon after the late political activist Liu Xiaobo received the Nobel Peace Prize in Oslo. Also in 2010, it used technicalities to ban exports to Japan of rare earth minerals crucial for the production of electronics products after Japan arrested a fishing trawler captain on charges it had intruded into Japanese waters around the Diaoyu island chain, called the Senkaku Islands by Japan. The ban ended after Japan released the fisherman.

In each of these instances, China largely got what it wanted, which was to demonstrate its growing clout. Today, with a struggling US in its sights and no other real countervailing power, any pretensions on Beijing’s part toward soft power have been abandoned. China has been showing its fist in Hong Kong with the appointment of a pair of hardline apparatchiks to issue orders for the city’s rebellions citizens to toe the line and rocket-rattling over Taiwan, sending jets over the island and parading one of its two aircraft carriers in the South China Sea.

Despite Malaysian and Philippine efforts to mollify Beijing, and Vietnam’s attempts to resist, the People’s Liberation Army Navy and the Chinese Coast Guard have continued to push into sovereign waters, largely with impunity although Indonesia in a show of force forced Chinese Coast Guard ships and fishing boats out of the Natuna area.

It presumably is time for the US to counter China’s moves. Ashley J. Telis, a senior fellow at the Carnegie Endowment for International Peace in a recent essay, described the two-decade strategic competition with China is a “struggle for dominance in the international system that could, if sustained, over time threaten the US hegemony that has been in place since the end of World War II.”

But the US has largely squandered its regional influence, needlessly alienating allies Japan and South Korea with demands for dramatically increased payments to keep US troops on their soil, leading South Korea to consider a defense agreement with China instead.  President Trump has further alienated allies including South Korea by attempting to practice personal diplomacy with the murderous North Korean dictator Kim Jong-un, who has inexplicably disappeared from view despite Pyongyang’s attempts to make it look like he is actively leading the country.

China, which decisively stopped the coronavirus pandemic on its own soil and has since begun a relatively positive economic recovery and a return to normal, nonetheless continues to face its own problems with external debt equivalent to US$2.057 trillion, an economy distorted by state enterprise spending, a possible banking crisis, and what may be uncollectible repayments from debtor countries newly impoverished by the coronavirus that are involved in its massive, trillion-dollar Belt and Road Initiative. The property market looks likely to fall sharply as well and there are very real economic scars from the coronavirus, which originated in Wuhan despite efforts to obfuscate that fact.

Nor, as the citizens of Hong Kong, Taiwan, Tibet and Xinjiang can attest, is Chinese hegemony any picnic. Under Xi Jinping, the country is increasingly a police state, with its citizens spied on and repressed by a massive state apparatus. Although he appears to face internal pushback, it is clear he is pretty much unassailable at the moment.

Contrast that with the United States, where economists are attempting to ascertain whether the US recovery will be a V or a U or an L, or, in the case of the pessimist Nouriel Roubini, an I – no recovery at all. The Congressional Budget Office, on April 24, forecast a GDP contraction of 12 percent during the second quarter of 2020, equivalent to an annual decline of 40 percent for the quarter, with an unemployment rate of 14 percent, the highest since the 1930s.  The Bureau of Labor Statistics reported that the number of unemployed rose by 15.9 million people in April to 23.1 million. At least 100,000 small businesses are recorded as having closed for good, with more inevitably on the way.

There are now 1.4 million Covid-19 cases in the US and more than 83,000 deaths – nearly a third of the world total by a country with only 3.39 percent of the world’s population. The fact is that the virus is out of the bottle in the United States and it can’t be put back in.  Infections continue at more than 22,000 per day and deaths at more than 1,500. The two things that could contain the virus – testing potential victims and meticulously tracking their previous movements – are now out of the question.

According to research from the Imperial College in London, which modeled the US response, up to 90 percent of deaths could have been prevented had the US government taken dramatic action as early as March 2. Trump at this point was still saying it would go away by itself. Now the deaths look likely to go well above 100,000.

The onset of the virus is only a factor in the long, slow fading of US influence in Asia, which began with the defeat of the US in Vietnam in 1975. Asia – not just China or Japan – started to come into its own, with strengthening polities and maturing societies able to think for themselves instead of taking their cues from the west. A long series of impasses or outright defeats from Korea in the 1950s to the 19-year Afghanistan stalemate today have robbed the west of its military mystique.

President Trump’s withdrawal from the proposed 11-nation Trans-Pacific Partnership Trade Agreement in 2017 was his first big mistake, for no other apparent reason than that his predecessor, Barack Obama, had shepherded the agreement to its then status. The TPP was basically designed to ring-fence china, giving the US and signatory nations the advantage.

After the refusal of the request for ratification to the US Congress, China added more misery to the US stance in Asia by embracing the Asean-initiated Regional Comprehensive Economic Partnership trade agreement. Trump was in a rush to initiate a trade war with China, calling trade wars “good, and easy to win.”

Presumably, with negotiations largely stalled after two years, the president has learned that trade wars are neither good nor easy to win. This one has cost US manufacturers, farmers and IT companies at least US$46 billion, according to the US Commerce Department -- US$37.3 billion in import duties and the rest in falling exports. That doesn’t count the damage to multinationals using Chinese factories that have had to move their supply chains out of China to countries with less expertise in international trade.  In addition, retaliatory tariffs have cost US exporters billions, with exports falling by 23 percent in the 12 months ending in November 2019.

This is an own goal that didn’t have to happen. Many countries have been fed up with predatory Chinese investment regulations and blockages to free trade. Trump and his trade representatives never thought of attempting to put together a solid front to challenge Chinese trade practices.

With the onset of the coronavirus and the hibernation of US manufacturing, commerce and the paralysis of US government, the trade war is on hold, almost certainly until after the November national election, allowing Chinese manufacturers and exporters additional advantages. In other words, the moment is gone. It is unlikely to return.

John Berthelsen is Asia Sentinel’s editor