Australia, not China, initiated trade conflict
23 January 2021
PERCY ALLAN
| Pearls and Irritations
SYDNEY - Post Covid, it will be hard for Australia to grow quickly without China’s market, capital, people exchange and know-how. Finding a détente is essential.
However, Australia targeted China before it targeted us. After signing a free trade and investment agreement with China in 2015, we:
Blocked more than 100 Chinese imports by using anti-dumping provisions that the Productivity Commission found were inappropriate under World Trade Organisation rules
Led the charge globally to ban Huawei from the 5G network
Officially condemned human rights violations in China without shaming neighbouring countries (e.g., India, Indonesia, Malaysia, Vietnam, Cambodia, Pakistan, Myanmar etc) for their transgressions, or taking moral responsibility for our own Pacific Solution for refugees
Condemned China for breaching international law by seizing a disputed coral atoll in the South China Sea while ignoring Trump tearing up international agreements such as the Paris Climate Change Accord, NAFTA, the Trans-Pacific Partnership Agreement, the Iran Nuclear Treaty and the Medium Range Missile Treaty
Banned China, but not other nations, from promoting its interests and influence in Australia
Publicly requested the World Health Organisation to investigate the origins of Covid after talking to the Trump administration, but did not give prior notice to, let alone have any dialogue with, China
Have now banned virtually any investment from China or any bilateral cooperation between state governments and universities and their counterparts in China
China is as a result accusing Australia of singling it out for special discrimination and has designated us a ‘hostile supplier’. I think it has a point.
We could find ourselves isolated as other countries continue to not only co-exist with but forge closer ties with China. America made China buy more agricultural exports from it.
The European Union and China have now concluded a ‘comprehensive’ agreement on investment.
And last November, 15 Asia-Pacific nations (including Australia and China) signed the Regional Comprehensive Economic Partnership (RCEP) Agreement to eliminate about 90% of tariffs on inter-regional trade and establish common rules for e-commerce, trade and intellectual property.
Following the agreement, Japan and China agreed to work together to uphold and strengthen rules-based multilateral trade and to hold talks with South Korea on a three-way trade deal.
As former trade minister Andrew Robb has highlighted, China accounted for two-thirds of the world’s GDP growth in the past 15 years.
Diversifying exports to other markets that cannot match that performance won’t be a substitute.
Unlike most OECD countries, Australia’s resource-rich economy complements, rather than competes with, China’s manufacturing intensive one.
But with media hysteria and megaphone diplomacy, it will be hard to repair the damage to our bilateral relations.
It will also be hard for Australia to grow quickly after Covid-19 without China’s market, capital, people exchange and know-how. Finding a détente is essential.
Percy Allan AM is a public policy economist, a former head of NSW Treasury and a visiting professor at the University of Technology, Sydney
The facts as Percy Allen has described them are, to the best of my knowledge, true and correct.
It is also correct that the Chinese government has repudiated its undertakings in relation to the status of Hong Kong, persecuted and imprisoned the Uighur people in an effort to crush their culture and language, ignored international law in defining the entire South China Sea as its own territory and, in the last 48 hours or so, drafted a law authorising its coast guard to fire on foreign vessels that enter those disputed waters.
This is the profile of a hostile power, not a benign and benevolent international citizen going about its lawful occasions.
If history is any guide China, along with the rest of us, is edging slowly and incrementally towards a situation where military conflict becomes a foreseeable consequence of its behaviour and the response of other powers to that behaviour.
History shows that what nations judge to be carefully calibrated responses to provocations can subsequently prove to be a series of grave misjudgements which lead to entirely unintended outcomes. All too often it is only in hindsight that this is recognised or understood.
Make no mistake, this is the path we are collectively on right now. The dangers involved have been obscured by events such as the extraordinary behaviour of the late and unlamented Trump administration in the USA, the UK's departure from the European Union and, more broadly, by the international struggle to contain and defeat Covid 19.
Some of the harder heads within the world's democratic governments will have realised this but I do not get any sense that there is a consensus about what to do about it.
The political class seem unwilling or unable to recognise what is going on, being obsessed with supporting and reinforcing the failing neo-liberal, consumption based, environmentally destructive and unsustainable economic model.
So we stumble onwards, trying to manage the petty irritants of great power conflict while at the same time trying to avoid triggering a socio-economic or even military disaster.
Of course, history is not a perfect predictive tool: it merely shows what can happen, not what will. In short, nothing is inevitable but it is wise to recall that the unthinkable can become very real, very suddenly.
An instructive example is the explosive and catastrophic self destruction of European imperialism between 1914 and 1918.
Those who led Europe into the abyss had no idea that their political machinations arising from the assassination of an obscure Austrian aristocrat would trigger a cataclysm from which they would never recover.
China has a long and magnificent history of achievement and high culture. It is, in many respects, right and proper that it should resume its place as a major world power.
However, like Europe, its history is also riddled with examples of political misjudgements that led to catastrophic consequences.
We can only hope that our respective political classes have absorbed and understood this basic lesson of history and so act with caution, restraint and wisdom in managing disputes such as that now occurring between China and other powers, including Australia.
Posted by: Chris Overland | 23 January 2021 at 06:54 AM