Economic decoupling from China would be 'act of national self-sabotage', Australian Labor and Liberal MPs agree

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Economic decoupling from China would be 'act of national self-sabotage', Australian Labor and Liberal MPs agree​

Tim Watts and Dave Sharma also say Chinese Australian communities are assets and warn against ‘descent into McCarthyism’
Mon 7 Dec 2020 16.30 GMT

Liberal MP Dave Sharma says China is Australia’s largest trading partner and ‘wholesale decoupling cannot be a serious proposition’. Photograph: Anthony Wallace/AFP/Getty Images

Australia would be shooting itself in the foot if it tried to untangle itself from economic reliance on China, politicians from both major parties have declared, while warning there is no end in sight to the turbulence in the relationship.

Labor MP Tim Watts cautioned on Tuesday that economic decoupling from China – an idea that is advanced by some of the most hawkish politicians in Canberra – would be “an unprecedented act of national self-sabotage”.

His Liberal colleague, the former diplomat Dave Sharma, agreed that wholesale decoupling was not a serious proposition, because China was deeply integrated into the global economy and because Australia had been a “massive beneficiary” of its growth and industrialisation.

Both MPs were to outline their views about how Australia should manage its increasingly challenging relationship with China at an event organised by the China Matters thinktank at parliament house on Tuesday morning.

But in a pair of papers published by China Matters in advance of the event, Sharma warned against any “descent into McCarthyism”, saying Australian public debate must be sophisticated enough to allow an exchange of views without people’s patriotism being called into question.

It was important to see Australia’s Chinese communities as assets and to defend them, when needed, “from attacks questioning their loyalty or patriotism”.

“Not only are such attacks deeply offensive to our national character, they do us immense strategic harm,” Sharma said, adding that the People’s Republic of China (PRC) sought to exploit internal division.

The Liberal MP for Wentworth did not specifically mention his Senate colleague, Eric Abetz, who attracted criticism in October for demanding unequivocal condemnation of the Chinese Communist party (CCP) from three Chinese Australian witnesses at a public inquiry.

The already strained relationship between China and Australia hit a new low last week with Scott Morrison demanding an apology after a Chinese foreign ministry official tweeted a digitally created image that appeared to show an Australian soldier cutting the throat of a child in Afghanistan.

China – which has taken a series of trade actions against a range of Australian exports throughout the course of this year, including, most recently, wine – rebuffed the prime minister’s call for an apology and argued it was up to Australia to take concrete steps to repair the relationship.

Sharma wrote that Australia’s relationship with China had become harder to manage in the past decade, partly because the PRC’s strategic weight had increased and the era of the United States as the sole superpower was ending.

“The PRC of 2020 is more powerful, more assertive, more nationalistic and more ambitious than the PRC of 2000,” Sharma wrote. “It should come as no surprise that Australia finds this a more difficult relationship to manage. We are not alone in this.”

Australia, he said, should seek to build a constructive relationship patiently and on the basis of these new realities and “cannot afford for our relationship to be dysfunctional”.

Australia has the highest level of integration and exposure to the PRC among western nations, Sharma noted in the China Matters paper. China was Australia’s largest trading partner, largest source of tourists and foreign students, and one of its largest sources of migrants.

Sharma allowed for the case for lessening reliance on the PRC in some key sectors, diversifying suppliers and rebuilding national capability, “but wholesale decoupling cannot be a serious proposition”.

Australia should resist language or policy that smacked of economic containment of China. The role of China needed to “be defined, not denied”.

Sharma’s eight recommendations included diplomatic efforts aimed at building new coalitions to defend the liberal world order. This might take the form of institutionalising a new version of the G10 grouping and organising regular meetings of defence ministers of the Quad countries Australia, Japan, the US and India.

Watts, meanwhile, suggested that the foreign affairs department, the Treasury, defence and the intelligence agencies should provide regular background briefings on the China-Australia relationship – and Australia’s strategy – to parliamentarians, the media and state and territory governments.

Watts said Australia should build an independent foreign policy identity in southeast Asia and reverse cuts to overseas development assistance to the region.

Sharma called for the Australian government to encourage the United States to join the rebadged Trans-Pacific Partnership and support efforts to include Taiwan, too.

It comes after the former Australian trade minister Andrew Robb called for China and the US to be invited to join the TPP. Outlining the idea in an op-ed in the Australian Financial Review, Robb said: “Let’s focus our minds to positive solutions, invite cooperation, and stick to it.”

Economic decoupling from China would be 'act of national self-sabotage', Labor and Liberal MPs agree

Tim Watts and Dave Sharma also say Chinese Australian communities are assets and warn against ‘descent into McCarthyism’

www.theguardian.com

 

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What’s driving Australia’s China policy U-turn​

Prime Minister Scott Morrison has apparently woken up to the need for friendly ties with Beijing
By KEN MOAKDECEMBER 7, 2020

Prime Minister Scott Morrison now reportedly wants a 'happy co-existence' between Australia and China. Photo: AFP / Mark Graham

Australian Prime Minister Scott Morrison has toned down his tantrum over Chinese diplomat Zhao Lijian’s posting of a piece of art depicting soldiers about to slit an Afghan child’s throat. China not only refused to delete the picture, it demanded that Australia investigate and apologize for its soldiers’ alleged atrocities in Afghanistan. But unexpectedly, Morrison was reported by the South China Morning Post on December 3 as saying he wanted a “happy co-existence” with China.

This raises the question: Why has the Australian prime minister apparently made a sudden U-turn on his country’s anti-China policies? There might be two answers.

One, Morrison may have finally acknowledged that Australia needs China to sustain its economic growth. One cannot bite the hand that feeds you, can you?

Two, except in the “Five Eyes” comprising the US, the UK, Australia, Canada and Zealand, Morrison might not want to be seen as a hypocrite, accusing China of what Australia has been doing only worse.

In the SCMP article, Morrison admitted that the “normal” China-Australia relationship benefited both countries, particularly his. China’s huge 2008 stimulus package reversing the economic downturn caused by that year’s financial crisis pulled Australia out of the deep recession into which the West and Japan had sunk by buying huge quantities of Australian resources. The rest is history.

Australia has been meddling in and bullying smaller nations for years. It intimidated Timor-Leste into accepting a border dispute that largely benefited Australia. Canberra criticized Beijing for imposing a national-security law on Hong Kong when that was not Australia’s business. These are just a couple of examples on a long list of Australia’s interfering in other countries affairs and bullying.

However, Morrison’s U-turn is refreshing, particularly for his country. While China may be getting the quality and quantity of resources it needs to fuel its industrial power, Australia will re-capture a big market and source of international students and tourists.

However, resetting the China-Australia relationship might be easier said than done. China cannot be expected to let bygones be bygones and resume trade as if nothing had happened. Moreover, Morrison faces considerable domestic and US opposition to resetting the relationship.

The major problem for Morrison is that the anti-China crowd has manipulated public opinion, culminating in an overwhelming majority of the Australian population having a negative view of the Asian giant.

Right-wing populist politicians such as Pauline Johnson have complained of Asians (read: Chinese) “swamping” the country. The anti-China crowd also accuses Beijing of spying, stealing secrets or technologies and meddling in Australian affairs.

Though such allegations were never proved, the damage was done, sinking the once mutually beneficial relationship to an all-time low. The latest spat was over artwork depicting an Australian soldier about to cut the throat of an Afghan child, which Zhao posted on Twitter. Morrison demanded that the tweet be taken down, but China refused and urged Australia to apologize to Afghanistan.

To suggest that Australia voluntarily propagated anti-China sentiments is, of course, highly unlikely: It probably was pushed by US, particularly under the Donald Trump administration. No country would bite the hand that feeds it unless it is pressured or forced to do so.

A case in point is Australia being the first to oblige the US demand that its allies ditch Huawei and other Chinese telecom firms from its 5G (fifth-generation technology) rollout, something that would cost more and cause delays.

Unsurprisingly, picking a fight with its biggest trade partner and source of students and tourists for no reason other than to please the “boss” has had economic and geopolitical repercussions for Australia. It made the pandemic-induced recession worse because of cutbacks by China on Australian exports, and fewer Chinese students and tourists entering the country. The economy plunged into a recession in the first half of this year.

It is true that the economy recouped in he third quarter, registering 3.3% growth, but that was largely attributed to a massive stimulus package subsidizing consumers. Welfare payments cannot last forever; what the country needs is wealth-creating economic activities.

Since Australia has no manufacturing to speak of, its main sources of wealth are exporting resources and education services and attracting tourists. China buys a third of Australia’s exports, and sends thousand of students and hundreds of thousands of tourists Down Under. It would be fair to suggest that no country can contribute as much to Australia as China.

Truth be told, China did not commit a fraction if any of the misdeeds that Australian politicians, pundits and media accused it of. On stealing Australian technology, for example, there is really nothing worthwhile for China to steal. Australia is not known for its technological achievements.

Indeed, having Chinese scholars working at its universities could increase the quality and quantity of research because China is far ahead of Australia in 5G, artificial intelligence and other technologies.

China does not really need Australia, but the fact of the matter is Australia needs China more than it wants to admit.

China is the biggest country in the recently signed Regional Comprehensive Economic Partnership, accounting for around 50% of the 15-country free-trade agreement’s gross domestic product. In this regard, it would not be an exaggeration to suggest China will be the other members’ biggest market.

Moreover, the Comprehensive Progressive Agreement for Trans-Pacific Partnership is more hype than substance because trade among its members remains lackluster. What’s more, the CPTTP could encounter problems, in part because its labor and environmental standards might be too high for developing economies such as Vietnam.

Prime Minister Morrison should follow through with his gesture of establishing a “happy co-existence” with China. Listening to the anti-China crowd and caving in to US pressure would only harm Australia’s national interests.

What's driving Australia's China policy U-turn

Australian Prime Minister Scott Morrison has toned down his tantrum over Chinese diplomat Zhao Lijian's posting of a piece of art depicting soldiers about

asiatimes.com