James Laurenceson, University of Technology SydneyAfter Australia’s foreign minister Marise Payne cancelled the Victorian state government’s memorandum of understanding to participate in China’s “Belt and Road” global infrastructure initiative a fortnight ago, she said she didn’t expect retaliation from Beijing.
That was always a hopeful message for a domestic audience.
Yesterday the Chinese government “indefinitely suspended all activities” with Australia under a framework called the China-Australia Strategic Economic Dialogue. China’s foreign ministry also warned Australia “not to walk further on the wrong path”.
The Chinese embassy had warned Payne’s “unreasonable and provocative” decision was “bound to bring further damage to bilateral relations”. It was right.
Why would China let Australia off the hook? It hasn’t shied away from retaliating against actions by the United States. Nor from punishing Australia by restricting imports of barley, beef, lobsters, wine and wood (though not iron ore).
If this is the full extent of the retaliation, though, the feeling in Canberra will be one of relief. The annual dialogue has been on ice since 2017. So this suspension doesn’t change that much.
It is, however, an important symbolic action. It will further weaken important connections between bureaucrats. It sends a strong diplomatic signal that China is prepared to escalate.
Origins of the strategic economic dialogue
The first China-Australia Strategic Economic Dialogue was in June 2014. It involved talks between Australia’s treasurer and trade minister and the chairman of China’s peak economic development and planning agency, the National Development and Reform Commission.
Holding these annual talks was part of a package of closer relations the Gillard government secured with the Chinese government in 2013.
That package also included an annual meeting between the two nations’ respective prime ministers – something China formally had only with Britain, Germany, Russia and the European Union.
By the time of the first dialogue (in Beijing) Tony Abbott was prime minister. Still, the talks were successful enough for Australia and China to agree in November 2014 to call their relationship a “Comprehensive Strategic Partnership”.
But by mid-2016 the bilateral political relationship was going downhill. The last strategic economic dialogue was in September 2017.
This is why China’s announcement yesterday has been described an “act of pure symbolism”, and even a sign China has “run out of ammunition” after its barrage of trade disruptions over the past year.
But it would also be a mistake to discount the importance of the symbolism.
In formally suspending the dialogue, Beijing has signalled its preparedness to suspend talks not just between politicians but also the bureaucrats who do the vast bulk of the work that makes bilateral relationships meaningful. This is why China’s state media has emphasised that suspension includes all activities between the National Development and Reform Commission and “relevant Australian ministries”.
To be clear, Australia’s diplomatic officials aren’t being prevented from seeing their Chinese counterparts, and bureacratic links have been strained since 2017. But the Treasury representative housed at the Australian embassy may now find meetings even harder to secure, if not impossible.
As Deakin University’s Chengxin Pan notes, “symbolism about something negative matters greatly in international relations”.
Symbolism, after all, was what motivated the Australian government to tear up Victoria’s Belt and Road Initiative agreement with China.
The deal was not legally binding and didn’t commit the Victorian government to anything. But the federal government wanted to send a message: it would do this and not be deterred by the threat of Chinese retaliation. It was a signal to Beijing that Canberra was not for turning.
Beijing has now sent a message in return: Canberra shouldn’t expect to get off scot-free.
China might not suspend its demand for Australian iron ore and natural gas. But it could further disrupt imports such as dairy products, or flows of students and tourists as borders reopen – a threat made by ambassador Cheng Jingye a year ago. Such messages from government officials also send strong cues influencing Chinese companies and consumers.
Nor is the “nuclear option” – killing ChAFTA – off the table.
Another symbolic move – for example, a joint leaders’ statement reaffirming the importance of the comprehensive partnership – may be the the best way to turn things around.
But with both sides having spent the past year doubling down and hardening positions, that prospect seems remote.
This is an edited extract of an essay in the latest issue of Australian Foreign Affairs, The March of Autocracy, published today.
It is the year 2049. China is celebrating having reached its second centenary goal – to become a “prosperous, powerful, democratic, civilised and harmonious socialist modernised country” by the 100th anniversary of the people’s republic.
Its economy is three times the size of the United States’, as the International Monetary Fund predicted back in the 2010s. The US remains wealthy and powerful – it has functioning alliances in Europe – but its pacts with Asian allies have fallen into disrepair.
For decades, Hong Kong has been accepted as just another province of China. Few dare to criticise the ongoing human rights abuses there, or in Xinjiang and elsewhere, because of the extraterritorial application of China’s national security laws. Taiwan, if not annexed, is isolated, with no diplomatic partners.
The legacy of Xi Jinping, who led China for more than 30 years, monopolises ideological discourse in China. His successors rule under his shadow.
Outside China, many of the third-wave democracies that transitioned in the second half of the 20th century have become far less liberal. Elections are held, but increasingly authoritarian governments have adopted many of Beijing’s technological and legal tools to manage markets and control politics. The internet is heavily censored.
Mistrust permeates every aspect of China’s relations with the West. International co-operation on climate change and the strong carbon-reduction commitments of the early 2020s have long been abandoned. The focus is on individual adaptation.
Australia remains a liberal democracy and a staunch defender of free markets and human rights. But these are no longer the default standards of global governance – they are minority positions associated mostly with Western traditions. No longer a top-20 economic or military power, Australia’s opportunities to make its mark internationally are few and far between.
An unsettling but plausible vision
This vision of a fragmented and decidedly less liberal international order is highly speculative, but also dispiritingly plausible.
It is unsettling to an Australian reader, not just because Australian foreign policy has been centred on a global set of rules and institutions since 1945, but because Australian identity is so enmeshed with the values of liberal democracy.
The 2017 Foreign Policy White Paper states that Canberra is “a determined advocate of liberal institutions, universal values and human rights”, in stark contrast to Beijing.
All nation states, especially rising powers, desire a favourable global environment in which they can acquire power, prosperity and prestige. The postwar system greatly aided China, and it would be incorrect to claim Beijing wants to dismantle it entirely.
Similarly, it would be disingenuous to overlook the many instances where the US and other liberal democracies have behaved inconsistently.
But the Chinese Communist Party, which leads an authoritarian state, sees the liberal values embedded in the present order as a threat to its rule. Unlike the US, which at times ignores or violates these principles, China needs many of them to be suppressed, even eliminated.
As China seeks to remake the international order, the challenge is to understand where and how Beijing’s efforts will undercut its liberal character, and to identify where it is possible to resist.
How China is changing the world
Rather than upend the existing international system, Beijing’s approach today is to co-opt, ignore and selectively exploit institutions.
Xi has said:
reforming and improving the current international system do not mean completely replacing it, but rather advancing it in a direction that is more just and reasonable.
In late 2019, for instance, the World Trade Organisation’s appellate body ceased to function after the US – complaining about the organisation’s soft stance on China – blocked the appointment of replacement judges.
In many ways, the WTO’s structure is the epitome of a liberal rules-based system: countries relinquish some sovereignty and are bound by judicial decisions in the interests of resolving trade disputes.
In response, China joined with the European Union, Australia and other governments to set up a parallel stop-gap legal mechanism.
This was a reflection of the CCP’s nuanced relationship with the liberal international order. China needs a stable trading system and will agree to binding rules to preserve it. The odd trade dispute does not substantially threaten China’s ideological security.
In the future, Beijing should be expected to exert its influence on the current order. The challenge for states such as Australia is to identify when Beijing’s behaviour exceeds influence and begins to erode the system’s liberal foundations.
China is already skilfully manoeuvring within international institutions to guide their operations, press for reforms and promote the China model.
China also elevates its government-organised NGOs, presenting an image of independence while drowning out the voices of independent civil society.
The China Society for Human Rights Studies, for example, has official consultative status at the United Nations as an NGO, but is co-located with Chinese government offices and staffed by Chinese government officials. It has vigorously prosecuted China’s human rights agenda.
The use of deft diplomacy and inducements to generate voting blocs is unsurprising. But China also seeks to change the system, diluting the liberal elements that threaten the China model and thus the CCP’s rule.
For instance, China has already succeeded in weakening the liberal character of international human rights. In 2017, it proposed its first-ever resolution to the UN Human Rights Council, headed: “The contribution of development to the enjoyment of all human rights”.
It prioritised economic development above civil and political rights, and put the primacy of the state above the rights of the individual. Despite objections and nay votes from Western members, the resolution passed. The subsequent report by the council’s advisory committee, a body of 18 experts supposed to maintain independence, referred mainly to Chinese party-state documents.
Chinese diplomats also block human rights resolutions at the UN Security Council, such as a February 2020 resolution on the plight of Myanmar’s ethnic Rohingya.
While the US has arguably been similarly obstructive on resolutions about Palestine, it is for the narrow purpose of protecting an ally, rather than the broader project of weakening the rights themselves.
China has even been able to marshal the international system to defend and commend its behaviour in Xinjiang and Hong Kong.
In 2020, at the 44th session of the UN Human Rights Council, a joint statement signed by 27 countries, including Australia, expressed concern at arbitrary detention, widespread surveillance and restrictions in Xinjiang and the national security legislation in Hong Kong.
A competing statement supporting the Hong Kong legislation received support from 53 states, only three of which are considered “free” by the non-governmental organisation Freedom House.
By working within the system to rally a voting bloc, Beijing was able to compromise the world’s peak human rights body. Tactics that have been successful in watering down human rights are now being employed in areas where norms are still being established, such as internet governance.
Preparing for the new world disorder
The history of liberal internationalism is replete with contradictions. Some say that in recent decades it is Washington, not Beijing, that has damaged the order most.
So can China really do more damage to an order already on life support? Liberalism is not just facing an external challenge, but one from within.
The answer requires optimism about liberalism’s capacity to self-correct across the arc of history, and scepticism that illiberalism can do likewise. As much as Donald Trump belittled, criticised and attacked America’s institutions, he also created the conditions for a course correction – Joe Biden’s victory.
The CCP is a well-resourced and well-organised political force. It has the potential to be far more effective than any iconoclastic but capricious populist in permanently weakening the liberal foundations of the global order. Much of China’s influence abroad is unavoidable. A rising power with the economic and military strength that China wields is unlikely to be deterred.
On this logic, optimism has no place. But it would also be mistaken to adopt a fatalistic approach. Instead, Australia and its partners must focus their efforts on those elements of the liberal order most worth preserving and most under threat.
The centenary of the people’s republic is still 28 years away.
Myanmar’s transition from five decades of military rule is a work in progress.
Despite the junta’s formal dissolution in 2010, the release of political prisoners including opposition leader Aung San Suu Kyi, and democratic reforms allowing National League Democracy to win government in 2015, the military (officially known as the Tatmadaw) retains huge political and economic power.
A quarter of parliamentary seats are reserved for military appointees. The Tatmadaw also controls several major commercial conglomerates with disproportionate economic influence, having prospered through years of cronyism and corruption.
The severe international sanctions imposed on Myanmar during junta rule have been lifted. However, United Nations human rights advocates have warned against doing business with the Tatmadaw due to its human rights atrocities.
Several reports in the past month suggest foreign companies are failing to take that direction seriously.
Two British banks, HSBC and Standard Chartered, have reportedly lent US$60 million to a Vietnamese company building a mobile network in Myanmar. The Tatmadaw-controlled Myanmar Economic Corporation owns 28% of the network, known as Mytel. An Israeli technology company, Gilat Satellite Networks, has also reportedly been doing business with Mytel.
The Australian government has also been indirectly implicated. Its Future Fund has invested A$3.2 million (about US$2.5 million) in a subsidiary of Indian multinational Adani, which is doing business with the Myanmar Economic Corporation.
The United Nations’ call to avoid doing business with the Tatmadaw stems from its 2016 operations against the Arakan Rohingya Salvation Army, the separatist Islamist insurgency based in the western state of Rakhine.
Rahkine is about one-third Muslim, mostly ethnic Rohingya, a group with its own distinctive culture and language.
The crackdown quickly deteriorated into a human rights crisis. About 350 Rohingya villages were destroyed, according to Human Rights Watch. Hundreds of thousands fled to Bangladesh. (Hundred of thousands were already living in refugee camps due to past persecution.)
In March 2017 the United Nations Human Rights Council appointed an independent fact-finding mission to investigate allegations of atrocities. The mission included former Australian Human Rights Commissioner Chris Sidoti, former Indonesian prosecutor general Marzuki Darusman and Sri Lankan human rights advocate Radhika Coomaraswamy.
They published their first full report in September 2018. Detailing the killing of thousands of Rohingya civilians, forced disappearances and mass gang rapes, it called for the Tatmadaw commander-in-chief, Senior-General Min Aung Hlaing, and five other commanders to be tried for genocide.
In September 2019 the mission published a report on the Tatmadaw’s economic interests. It recommended foreign businesses sever ties and cease all business dealings with Tatmadaw-controlled entities.
The report’s main focus was Myanmar Economic Corporation (MEC) and another conglomerate, Myanmar Economic Holding Ltd (MEHL). These two corporations have profited from near-monopoly control over many activities and industries under the junta. They have amassed huge land holdings and businesses in manufacturing, construction, real estate, industrial zones, finance and insurance, telecommunications and mining.
They became public companies in late 2016, but their profits still mostly flow to the military.
The report names foreign companies in commercial partnerships with them, including Adani, Kirin Holdings (Japan), Posco Steel (South Korea), Infosys (India) and Universal Apparel (Hong Kong).
The report also recommended governments and institutions such as the World Bank and the International Monetary Fund (IMF) take action to economically isolate the Myanmar military.
It is important to note the UN report did not call for general disinvestment from Myanmar. It encouraged businesses to enter, invest and contribute to much-needed economic development – but without associating with the military.
The question of isolation versus engagement has been a longstanding one for Myanmar. Until 2011 the United States, the European Union and countries including Australia imposed broad trade and diplomatic sanctions.
However, foreign companies often found a way to do business in Myanmar through various low-profile strategies. Companies in neighbouring countries in particular largely operated on a “business as usual” basis.
While some nations, including Australia, have arms embargoes and travel restrictions on key members of the military in place, this does not preclude investment in the nation or business dealings with corporations such as MEC.
It notes its port investments in Myanmar are “held through Singapore-based entities and follow the strict regulations of the Singapore government”.
But doing business with the military conglomerates is less necessary than in the past. Creating separate subsidiaries does not shield investors from their ethical responsibilities to not help line the pockets of those responsible for genocide.
Great power competition in the Asia-Pacific region has been building for years. But COVID-19 has turbo-charged the shifts taking place and China is finishing 2020 in a significantly stronger position compared with the US than when the year started.
Meanwhile, Canberra’s relations with Beijing continue to deteriorate and there’s little reason to be optimistic that a sudden, positive turnaround will be seen in 2021.
As competition rather than cooperation has become the dominant frame through which both Beijing and Washington view their bilateral relationship, each is increasingly sensitive to evidence that other countries in the Asia-Pacific region are supporting their opponent.
The fundamental driver of China’s hostility towards Australia in 2020 stems from its assessment that Australia’s leaders have reneged on earlier commitments to never direct the country’s security alliance with the US against China.
Prime Minister Scott Morrison has appealed for Australia and other middle and smaller powers to be granted “greater latitude” in how they manoeuvre between the US and China in the future.
But the University of Sydney’s James Curran cautions against unrealistic expectations:
Great powers simply don’t dole out strategic space to others.
China’s power on an upwards trajectory
At the end of 2019, China’s GDP stood at US$14.3 trillion. This was two-thirds that of the US GDP of $21.3 trillion.
The fallout from COVID-19 has accelerated the trend in China’s favour. The International Monetary Fund’s latest growth forecasts suggest China’s economy will jump from two-thirds to three-quarters the size of the US by the end of 2021.
And when cost differences are accounted for and the two economies are measured in terms of their respective purchasing power, China’s GDP is actually already 10% larger than the US.
According to the Lowy Institute’s “Asia Power Index”, which tracks power in the economic, military, diplomatic and cultural domains, the US still comes out on top, but its lead over China has been cut in half since 2018. This mainly reflected losses by the US rather than gains by China.
And even before COVID-19 hit, a survey of business, media and civil society leaders in Southeast Asia showed that Beijing was considered vastly more influential than Washington in the region, though this increasing power was viewed with apprehension.
Nearly half said they had little to no confidence in the US as a strategic partner or provider of regional security.
And when asked if the Association of South East Asian Nations (ASEAN) was forced to align itself with either the US or China, a majority in seven of the 10 ASEAN member countries chose China.
The past year has also delivered dividends for China’s leaders domestically, with most citizens giving them high marks for their handling of the public health crisis, despite some initial anger of the government’s early attempts to cover up the severity of the pandemic.
All of these “wins” would naturally provide impetus for China’s international behaviour to become more confident and assertive.
But President Xi Jinping’s worldview is another factor. In September, Xi exhorted Communist Party cadres to “maintain a fighting spirit and strengthen their ability to struggle”. The word “struggle” appeared more than another 50 times in the same speech.
The Lowy Institute’s Richard McGregor says this reflects Xi’s view that China is in an
existential struggle against an implacable enemy dead-set on destroying China.
China’s diplomats had already been primed to embrace a “fighting spirit” in a speech delivered by Foreign Minister Wang Yi last November.
All of this has meant that rather than projecting a self-assured poise, China’s international behaviour has frequently veered in the direction of bullying fuelled by insecurity.
Australia has been on the front lines of this treatment — dialogue on the leader and ministerial level has been refused, exports have been targeted and propaganda campaigns have been deployed.
Beijing’s intransigence has predictably led to the strengthening of coalitions like the Quadrilateral Security Dialogue (comprised of the US, Australia, Japan and India), as well as deeper conversations among Japan, India and Australia about how to build greater resilience into supply chains that are currently heavily exposed to China.
Greater use of carrots than sticks
There is some evidence China is beginning to recognise its over-the-top behaviour is counterproductive, at least towards some countries, and make greater use of carrots rather than sticks.
COVID-19 has hit Indonesia particularly hard, hit with more than 600,000 total cases so far. But just last week, Jakarta received 1.2 million doses of a vaccine manufactured by a Chinese pharmaceutical company, Sinovac.
China is touting this effort a “Health Silk Road”, with pledges to provide billions in aid and loans to mostly developing countries to help them recover from the pandemic.
Australia won’t have much latitude with a stronger China
In the case of Australia, however, China is unlikely to put the stick down any time soon.
As Dirk van der Klay, a research fellow at ANU, explains, painting a stark contrast between Southeast Asia and Australia serves the purpose of reminding the region of the benefits of staying in Beijing’s good books — as well as the costs of crossing it.
While countries like the US, Britain and France have at least offered Australia some rhetorical support in its China predicament, Australia’s most significant Southeast Asian neighbours have been notably quiet.
With China’s relative power set to grow further in 2021, Canberra might feel even more uncomfortable. But as former senior Singaporean diplomat, Bilahari Kausikan, remarked in October, Australia is “not in a unique position” as “almost everybody” in the region faces the same challenge of managing relations with China and the US to maximise their economic and security interests.
Australia’s unfortunate distinction is that because its relations with China have already sunk to such depths, it has less ability to negotiate a path between the two great powers.
Elevating partnerships with countries like Japan, India and Indonesia offers one way forward, but alongside this needs to be a pragmatic strategy for getting the China relationship at least back on an even keel.
Tokyo, New Delhi and Jakarta have all had serious challenges with Beijing, but their relations never fell to the depths of the current China-Australia tensions. These countries might offer some useful advice here, too.
Most of us can’t wait to see the back of 2020, a year that has been memorable for all the wrong reasons. While 2020 provided the ultimate stress test for countries to discover their vulnerabilities, we can confidently predict the New Year will bring its own challenges.
So what will dominate international affairs in 2021? I’m expecting to be watching four Cs: coronavirus, China, climate and crises.
It should start to get easier, but the pandemic still has a way to play out. 2021 will be about adapting to living with the virus.
We’ll be hoping countries that managed the pandemic well can keep it up, and those that didn’t are helped by the roll-out of vaccines.
We’re likely to see further deterioration after a new law was passed this week giving the foreign affairs minister the power to cancel international agreements by state governments, local councils and public universities. If, as expected, Canberra uses this to cancel Victoria’s agreement with China on the Belt and Road Initiative, Beijing will see this as another instance of anti-China paranoia.
There will continue to be human rights issues, with attention on Xinjiang and Hong Kong, as well as on the cases of detained Australians such as Wang Hengjun and Cheng Lei.
Australian public opinion on China will likely continue its steep decline.
Once President-elect Joe Biden is inaugurated in January, we’ll be watching to see the impact on US-China relations. I think it will be continued contestation, on which there is a bipartisan consensus, but with foreign policy conducted more normally and with more focus on areas of potential collaboration, particularly climate change.
This is where the US election result will have the greatest effect on Australia. The Biden administration has pledged to rejoin the Paris Agreement and convene a world climate summit in its first 100 days to persuade the leaders of carbon-emitting nations to make more ambitious national pledges. When it says it will “stop countries from cheating”, it’s thinking of us.
There are already signs Australia is recognising it can no longer be such an outlier.
The next conference of the parties to the UN Framework Convention on Climate Change (COP26) in Glasgow in November is likely to capture public attention, like Copenhagen in 2009, as countries with higher ambition push for greater action.
The results at Glasgow will have a huge impact on the trajectory of climate change globally. It’s not an exagerration to say it will be one of the most important international summits in history.
Beyond these focus areas, there will always be things boiling over. For people who work in international affairs, it feels like it’s always “Events, dear boy, events”: a quote attributed to UK Prime Minister Harold Macmillan when asked what blows governments off course.
We don’t know where or when, but we know there will be natural disasters. People fleeing. Massacres and terrorist attacks. These events draw attention away from slower-moving changes like some countries’ ongoing decline and others’ steady improvement.
Ours is still a world of deep inequality. The massive improvements in human well-being over recent decades show that we have the tools to address the remaining pockets of misery. The start of this is to challenge the things we implicitly accept.
If you’re reading this, you’re in the group of people with relative advantage. Think about how you can contribute – whether that’s through your work, donating money or volunteering your time. Find something you think can be improved and decide to make a contribution.
In the moment, Scott Morrison’s angry denunciation of the offensive Chinese tweet about alleged Australian war crimes seemed a reasonable response.
In retrospect, it was probably ill-judged. This is so even though the response had bipartisan support.
The Chinese immediately knew they’d touched a raw nerve, and kept pressing it, through their hyperbolic mouthpiece The Global Times, and their embassy in Canberra.
They grabbed an opportunity to get their own back at a country inclined to focus on their bad human rights record.
In trying to show strength, the Australian government had exposed its sensitivity.
Morrison probably realised this. Twenty-four hours after calling his “virtual” news conference (he was still in quarantine at The Lodge following his Japanese trip) he told the coalition party room (remotely) that the government’s response to the tweet did not need amplification.
On Thursday he wouldn’t even be drawn about the Chinese social media platform WeChat taking down a message of reassurance to the Australian Chinese community he had posted.
The digitally-contrived image of a soldier with a knife to a child’s throat tweeted by China’s foreign affairs spokesman was the equivalent of a highly objectionable cartoon. With hindsight, Morrison might have been better to send out a minister to respond to the tweet, or simply to dismiss it with a brief condemnatory line and minimum elaboration.
The tweet was part of the cat-and-mouse game the Chinese are playing with Australia. This might hurt their international image – it certainly should. But the price for Australia is much higher. Strikes at Australian exports are costly and disruptive for businesses and industries at the worst possible time, in the year of COVID.
More generally, it is hard to avoid the conclusion China is treating the Australian government with contempt. How else can we read it when Australian ministers haven’t been able to get their phone calls returned?
Within Australia there is a range of views on how to cope with this situation.
Some in business have urged the government to tone everything down, to be much more accommodating to China. On the other hand, some on the Coalition backbench and among the commentariat believe China should be given no quarter.
In response to what has become a more assertive and interfering Chinese regime, the government’s stance can be characterised as hawkish in action while reaching out rhetorically.
Even as he raged about the tweet on Monday, Morrison said he hoped “this rather awful event” might lead to a “reset” where dialogue could be restarted. At his Thursday news conference his message was the government’s desire for “constructive and open and regular dialogue at leader and ministerial level to address the tensions that are clearly there in the relationship”.
But also on Thursday parliament was considering legislation for a new national security test for foreign investment in a “sensitive national security business”.
It’s not admitted directly but this is aimed squarely at Chinese investment. It’s justified – but the Chinese judge the Australian government by its actions, not its words.
Legislation is also before parliament to allow the federal government to quash agreements state or local governments or universities have or propose with foreign governments. This has Victoria’s belt and road deal with China in its sights.
Critics see the government’s early call for an inquiry into the origins and handling of COVID-19 as an ill-judged provocation of China, and even date the deterioration in the relationship from then.
Undoubtedly China was angered. But its discontent goes much further back and is much broader, as its recently-circulated list of 14 grievances makes clear.
And the COVID call was reasonable enough, even if it invited angst. The pandemic has been a stop-the-world sort of event and how it all happened is significant for the future.
The unpalatable truth is that Australia has limited agency in how relations with China go from here.
The government won’t (and shouldn’t) make U-turns on key policies, such as Malcolm Turnbull’s law against foreign interference.
China is not likely to be swayed by rhetoric. And if one point of its concern is that Australia’s voice on certain issues (such as its warnings on Huawei) influences other countries, China will have even less reason to reduce its pressure.
For however long it wants to get in Australia’s face, China will play havoc with some of our exports. Australia takes comfort from the fact that its biggest export there – iron ore – is protected by China’s dependence on this supply and the difficulties of finding alternative sources. But that situation can’t be taken for granted indefinitely.
How the relationship evolves from here will be affected by the China-United States dynamic, as the Biden administration reshapes America’s policies. But it’s expected the Biden reset will be a matter of degree.
Whatever faults there have been on the Australian side, the rough-edged nature of the bilateral relationship is just one manifestation of China’s muscling up in the world, and particularly the region.
In 2014 Chinese President Xi Jinping addressed the federal parliament.
This was Xi’s fifth visit to Australia and included a trip to Tasmania which, he noted, meant he would have been to all states and territories. He was lyrical about the country’s “strange-looking kangaroos”, “cute koala bear”, “flocks of white sheep” and “ingenious Sydney Opera House”.
He was also very positive about the bilateral relationship (although China watchers might have read cautionary signs in his wider comments).
“China has always viewed Australia as an important partner,” he said.
“During my visit, the two sides have decided to elevate our bilateral relations into a comprehensive strategic partnership and announced the substantial completion of Free Trade Agreement negotiations. These two important outcomes will further boost China-Australia relations.
“Our relationship has reached a new and higher starting point, and we should be more visionary, broad minded and set more ambitious goals. Our two countries should increase dialogue and exchanges and deepen political trust, expand result-oriented cooperation, and work together to sustain peace, stability and prosperity in the Asia-Pacific.”
For Australia, this key relationship hasn’t become any less important in the relatively few years since Xi’s fifth and presumably last visit – indeed it’s more important. But managing it has become something of a political nightmare.
Joe Biden’s election as US president presents Prime Minister Scott Morrison with the opportunity to reset Australia’s ailing relationship with China. Encouragingly, Biden has signalled his commitment to rebuilding global alliances and restoring a degree of certainty in foreign policy.
In his victory speech, President-elect Joe Biden talked about an “inflection” moment in America’s history, the opportunity to take a different course.
Australian policymakers should, likewise, take advantage of the Biden victory to reassess China policy settings that, under present circumstances, are not serving the country’s interests.
Emphatically, this is not an argument for a quiescent China policy that disregards Beijing’s bad behavior. Rather, it is a case for more nimble policy-making in Australia’s own national interests.
China’s further stifling last week of Hong Kong’s democratic freedoms by forcing the resignation of pro-democracy legislators is another sign of its disregard of international obligations under the “one country two systems” agreement that heralded the territory’s handover in 1997.
But whether we like it or not, whether it’s fair or not, whether China is a regional bully or not, Canberra needs to find a way to drag its relationship with Beijing out of the mire.
The Biden victory may facilitate this.
Canberra does not need to wait for a new American policy towards China to strive for a better balance between its foreign and trade policy interests and its security policy imperatives. Those efforts should begin now that the foreign policy deadweight of the Trump administration is being lifted.
The government has just signed a 15-nation regional trade deal that includes China, providing a potential avenue for improved relations. The Regional Comprehensive Economic Partnership (RCEP) is aimed at further liberalising trade in the Asia-Pacific.
In its clumsy fashion, Beijing has sought to ease frictions. In an editorial foreshadowing a Biden victory, the Global Times, China’s nationalist mouthpiece, made an interesting reference to Australia
When the US-China relationship is about to see some changes there may be also a window for adjustment to the bilateral relationship between China and Australia. Australia is likely to be under less political pressure from the USA on key issues with China, and whether the Morrison government will continue to play tough with China will largely steer Australia’s economic prospects.
On the face of it, this represents a possible break in the clouds. It will reflect views at senior Chinese government level.
Former Australian ambassador to Beijing Geoff Raby had a point when he told the National Press Club that the China debate in Australia had been reduced to a binary argument between “sycophancy and hostility”. This stifles reasonable discussion of something in between. Raby said:
The main thing with diplomacy is not how loudly you speak but the outcomes you get.
He also made the sensible point that, for all the talk of alternative markets at a moment when China is restricting Australian exports, China will remain, for the foreseeable future, the world’s fastest-growing economy and dominant destination for Australian products.
Soaring iron ore prices in the first half of this year, as China sought to re-inflate an economy hit hard by the coronavirus, mask a slippage in Australian business with China more generally.
China’s economy is already springing back harder and faster from the ravages of the coronavirus pandemic than its competitors.
These are the realities that are sometimes pushed aside by threat obsession within the Canberra political establishment.
Morrison could do worse than review an Asialink speech he made soon after he was elected prime minister to remind himself of principles he laid down then for dealing with China, and which appear to have been honoured in the breach since.
Then he decried a “binary prism” through which conflict between the US and China was seen as inevitable. He also rejected what he called the “fatalism of increased polarisation”.
“Australia should not sit back and passively wait our fate in the wake of a major power contest,” he said, while extolling the virtues of “regional agency” in which Canberra sought to work more closely with its like-minded neighbours.
This was all sensible stuff.
However, Australia’s alignment with Trump’s chaotic “America First” foreign policy has overwhelmed talk of a Morrison doctrine that emphasises regional connections. In the process, global alliances have been trashed.
This in turn has tested Canberra’s ability to apply basic principles of statecraft by maximising its strengths and minimising its weaknesses in an era in which power balances are shifting.
In all of this, the national media have played a role in amplifying the views of those who would have you believe the country is under constant existential threat. Voices calling for a more measured approach to dealing with China have been drowned out.
A low point was reached this month when a government senator in a Senate committee demanded Chinese-Australians giving evidence about difficulties in a hostile environment were asked to denounce the Chinese Communist Party. This implied a “loyalty test”.
Clunky Australian interventions on critical issues such as Huawei and investigations into the origins of the novel coronavirus have facilitated China’s strategy of portraying Canberra as Washington’s handmaiden for its own self-serving reasons.
Australia’s conspicuous and injudicious lobbying of its Five Eyes partners to exclude Huawei from a buildout of their 5G networks caused more trouble than it was worth.
Morrison’s heavy-handed intervention – after a phone call with Trump – in presuming to appoint himself co-ordinator of a global investigation into the origins of COVID-19 added further to Chinese disquiet.
An inquiry under World Health Organisation auspices was going to take place anyway. Why Morrison took it upon himself to take the lead in instigating an inquiry at a particularly sensitive moment for China remains a mystery.
In their efforts to get a handle on the form Biden foreign policy might take, Morrison and his advisers could do worse than review the president-elect’s contribution to the journal Foreign Affairs in which he laid out his blueprint for American global leadership.
This is a comprehensive description of how Biden’s foreign policy might evolve in a world that has changed significantly since he served as vice president in the Obama White House. It also demonstrates that Biden would not be outflanked on China policy by his opponent.
His proposal for a global Summit for Democracy to “renew the spirit and shared purposed of the nations of the free world” would be a welcome initiative.
Biden’s reference to how to meet the China challenge is worth noting.
The most effective way to meet that challenge is to build a united front of US allies and partners to confront China’s abusive behaviors and human rights violations, even as we seek to co-operate on issues where our interests converge, such as climate change.
This is the Biden carrot-and-stick formula. Too often in the recent past, the Morrison government has found itself aligned, whether it likes it or not, with the wrong end of the American stick.
Back in March, Joe Biden lamented “the international system that the United States so carefully constructed is coming apart at the seams”.
“As president,” he declared, “I will take immediate steps to renew US democracy and alliances, protect the United States’ economic future, and once more have America lead the world.”
Among the closest allies of the US, none arguably has more at stake in Biden making good on his promises than Australia.
The international system Australia wants repaired is one defined by rules and consensus. As a middle-ranking power, it has long recognised its national interests are best protected by international agreements and the rule of law, rather than one in which might makes right.
At the heart of Australia’s desired international trade system are multilateral trade deals, rather than bilateral deals which tend to favour the stronger nation, and a strong international authority – namely the World Trade Organisation – to negotiate rules and adjudicate disputes.
Donald Trump’s presidency undermined both. His “America First”
polices were grounded in grievances about other nations playing the US for “suckers”. He obstructed the WTO, turned his back on multilateral deals and started trade wars.
A Biden presidency promises a return to multilateralism. But it remains to be seen how it approaches the WTO.
Trump’s war on multilateralism
As president, Trump rapidly undid decades of mutilateral trade negotiations.
Trump’s trade war with China was also an exercise in power over principle. Both the escalating tariffs and the truce struck in January, known as the “Phase One Agreement”, repudiated established free-trade principles.
Along with commitments to reduce “structural barriers”, China is required to buy an extra US$200 billion in specified American goods and services over two years in return for the US cutting tariffs on $US110 billion in Chinese imports.
This worries Australian exporters.
The US shopping list for China includes more American seafood, grain, wine, fruit, meat and energy – all markets in which Australia is a significant exporter to China. As former Australian prime minister Kevin Rudd asked at the time the deal was signed:
How can the US pursue another $US32 billion of American beef, wheat, cotton and seafood – all listed in the agreement – without Australian exporters becoming collateral damage?
The deal, as the Minerals Council of Australia rightly noted, undermined “the principles of free trade which have underpinned Australia’s bipartisan approach to trade policy for many decades”.
The US has blocked every recent appointment and reappointment to the WTO’s Appellate Body, which hears appeals to WTO adjudications. Appointments require the agreement of all of the WTO’s 164 member nations, and the Appellate Body requires three judges to hear appeals. US obstruction reduced the number of judges to just one by December 2019, meaning it simply cannot function.
It’s important to note that US antagonism to the WTO predated Trump. The Obama administration also blocked appointments it considered would not sufficiently represent US preferences. But the Trump administration certainly upped the obstructionism.
Indeed, just days before the 2020 election it blocked the appointment of former Nigerian finance minister Dr Ngozi Okonjo-Iweala to head the World Trade Organisation. A highly regarded development economist with a 25-year career at the World Bank, Okonjo-Iweala is widely considered to be an outstanding candidate to lead the WTO. The United States stood alone in objecting to her appointment.
What will change under Biden?
Dropping opposition to Okonjo-Iweala and other appointments so the WTO’s processes can function would be an important symbolic and practical first step for Biden. It would reassure Australia and others that global rules still matter.
How quickly, and on what terms, Biden returns the US to multilateralism remains to be seen.
He has acknowledged the importance of deals like the Trans-Pacific Partnership to ensure an increasingly powerful China “doesn’t write the rules of the road for the world”. But he has also pledged to not enter any more international agreements “until we have made major investments in our workers and infrastructure”.
For Australia – and other US allies – it is important that the US return to the multilateral negotiating table sooner rather than later. For global stability, long-term interests need to override the temptation of short-term expediency.
For “America to lead again” there’s a long and difficult diplomatic road ahead. The international trade system and the WTO are not perfect, but a world without rules would be far worse.
The election of Joe Biden represents not only a repudiation of Donald Trump and his divisiveness, but an embrace of centrism and a mainstream approach to government and policy.
On the global stage, as at home, Biden is likely to follow a familiar script. Most obviously, he will embrace America’s alliances and strengthen its engagement with multilateral institutions. Rhetorically at least, he will give human rights and democracy a much more prominent role in Washington’s approach to the world.
In short, he is likely to pursue a global role much more in line with how the US has acted globally since the end of the Cold War. While it might be tempting to assume Biden will run foreign policy as a continuation of the Obama administration, there will be some points of continuity but also key changes. And some very significant challenges will remain.
Asia, and particularly China, in focus
One area of continuity, with both Obama and Trump, will be the centrality of Asia to US global strategy. This is in part for the same reasons his predecessors made the region a priority: it will be the most consequential part of the world for decades to come. But it is also because stretched US finances will mean the country will be unable to sustain a significant European presence or the kinds of policies it has pursued in the Middle East.
For Obama, the “pivot” to Asia was a choice about where to focus efforts. For Biden, the scarcity of resources will focus the mind on Asia. It will also mean a scaling back of US activity in those other theatres.
The biggest foreign policy question facing Biden will be how to approach the People’s Republic of China. Under Trump, the US moved toward a posture, on paper at any rate, of full-spectrum strategic competition. The 2017 National Security Strategy described China as intent on eroding Washington’s global advantage, and the US would reorient the instruments of national power to contest that effort.
In practice, Trump’s China policy was incoherent and inconsistent. Trump himself pursued a peculiar relationship with Xi Jinping, even allegedly encouraging the herding of millions of Uyghurs into concentration camps.
Biden is unlikely to move US China policy back to its “engage but hedge” setting of previous years – the mood in the US has hardened decisively, and not only because of Trump. However, the way the US competes with China is likely to change and there will be a need for co-operation. Biden won’t wind back the trade conflict significantly and moves to delink the two economies will continue, particularly in high-technology areas.
The US will continue to work to limit China’s ambitions to change Asia’s regional order, but it is likely to try to build on some areas of common interest to improve co-operation. The aim will be to advance their shared goals on that issue but also mitigate against the more damaging consequences of geopolitical competition.
This is most like to occur in relation to climate change. The Biden administration will put a very high premium on this vast threat and to advance that agenda meaningfully will require collaboration with China. So expect a more moderated approach to competition with the PRC but not an end to contestation in the region.
… and North Korea, too
North Korea was the scene of Trump’s most high-profile foreign policy gambit. While nuclear testing has stopped, it is increasingly clear that, in spite of protestations to the contrary from the president’s Twitter account, North Korea has a functional nuclear weapon capability.
The US-DPRK relationship, such as it is, has become highly personalised and the move away from Trump raises questions as to whether North Korea will revert to its bombastic past form – it has described Biden as a “rabid dog”. The most likely scenario will be a Biden administration that learns to live with a nuclear North Korea and, in contrast to Trump, works closely with its allies in South Korea to co-ordinate their approach.
The return to normality in Washington will greatly hearten America’s allies. They will no longer be ignored or, in some cases, overtly disparaged by the president. The Biden administration will place a strong emphasis on the role allies play in its foreign policy ambitions. It will value the alliances, rather than debase them, and use the reach they allow and political support they create to drive a more strategic approach to managing China.
But this greater value will not come cost-free. A financially constrained US will expect allies to do more to advance their shared security interests than they have in the past. This will be most evident in Asia, where treaty allies like Australia, Japan and South Korea will be under renewed pressure to play a more expansive, risky and expensive role in the region’s geopolitics. For Australia this will be a challenge in terms of both its capacity and its risk appetite.
A Biden presidency will restore dignity to US leadership and bring a much more integrated approach to managing its global interests. It will also act in stable and predictable ways.
But Biden will inherit an America whose power and credibility are in decline. The global institutions that the US built to stabilise international order and advance its interests are in a parlous state, and not only because of the attacks of the Trump presidency. It faces a global stage with ambitious emerging powers that have shrewdly used the incoherence of the Trump presidency to advance their position.
Biden’s election symbolises a return to orthodox ways in Washington. His instincts, and that of his foreign policy team, will be in line with how the US has approached the world for many decades.
We know the Trump approach has undermined US power and prestige. What remains to be seen is whether Biden’s instincts are the right ones in a dangerous and unstable global environment.
Few would have thought a US-China relationship marked by relative stability for half a century would be upended in just four years.
But US President Donald Trump’s privileged tour of the Forbidden City in November 2017 by Chinese President Xi Jinping now looks like it happened in a bygone era, given the turbulence in the bilateral relationship since then.
The shift in the US’s China policy is no doubt one of the major legacies of the Trump administration’s foreign policy, alongside a renewed peace process in the Middle East.
Although China’s rise had been a concern of the previous Bush and Obama administrations, it was the Trump administration that transformed the entire narrative on China from strategic partner to “strategic competitor”, starting with its National Defence Strategy report released just one month after Trump’s 2017 China visit.
This read, in part,
China and Russia want to shape a world antithetical to US values and interests. China seeks to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic model and reorder the region in its favour.
Trump’s sledgehammer approach to the US-China relationship has been problematic at best.
For one, Trump viewed the relationship transactionally, hardly scratching the surface of the deeper structural issues — such as state subsidies and labour standards — that exist between the countries.
He believed he could reduce the massive US trade deficits with China through a “big, beautiful monster” of a trade deal and this would be a silver bullet for both the economy and his re-election prospects.
This explains all the flip-flops during the drawn-out trade negotiations, during which Beijing largely managed to use the deal as bait to keep larger strategic issues off the table.
Moreover, Trump’s policies toward China, at least on the trade front, were unilateral. Instead of finding common ground with allies, Washington angered and deserted its allies by invoking punitive tariffs (Canada), renegotiating trade agreements to the US advantage (Japan and South Korea) and reducing its security commitments under NATO.
At the same time, the Trump administration relinquished US leadership in global institutions dealing with trade, climate change and human rights. As a result, the US lost its allies when it needed them most and gave China a new platform on the international stage.
The spectrum of voices in the cabinet ranged from China moderates such as Treasurer Steven Mnuchin and senior advisor Jared Kushner to sceptics such as US Trade Representative Robert Lighthizer to more radical China bashers such as Bolton, Vice President Mike Pence and Secretary of State Mike Pompeo.
As Trump became increasingly frustrated with a recalcitrant Xi reneging on “the deal” in mid-2019, followed by the outbreak of the COVID-19 pandemic, the China hawks in the administration gained the upper hand.
Although this led to a more coherent approach to addressing the strategic challenges posed by China, the result was more direct confrontations with Beijing and heightened tensions.
The past year has marked a low point in relations with tit-for-tat actions on a number of fronts, including
and further militarised its occupied islands and reefs in the South China Sea.
The list goes on. And these were not provoked by the US.
A new president won’t fix the relationship
It is extraordinary that what started as Trump’s petty complaints on trade with China eventually escalated into what many call “a new Cold War”.
Trump may not have succeeded in completely changing Washington, but his administration has at least shifted the public narrative and strategic view of China among the US elites.
Getting tough on China has become a source of rare bipartisan consensus in a polarised political climate. In fact, even if Trump loses the election to Democratic challenger Joe Biden, a fundamental U-turn in US-China relations is still unlikely.