There has been a marked increase in levels of diplomatic, and by extension, economic tensions between two significant trading partners in recent months and weeks.
In the space of 6 months, China has made clear its intention, and willingness, to use the blunt instrument of economic influence to express its displeasure of Australia’s increasingly vocal criticism.
China has long-held a position of cooperation and partnership with Australia, and has, at almost every turn, sought to inject diplomacy and dialogue as the primary tool for the resolution of any particular point of disagreement.
The conciliatory approach was abruptly cast aside when Australia led the global call for an investigation into the source of the COVID-19 pandemic, and how China’s Wuhan region may have contributed to is spread. Oddly, and with the seemingly welcome assistance from the WHO, China vigorously rebuked the suggestion, as led by Australia, seemingly at the behest of their US allies.
The Prime Minister, Scott Morrison, was chief-cheerleader for calls from ‘Western Leaders’ for a formal investigation into China’s handling of the COVID-19 outbreak, and China was none too impressed. What followed, quickly reminded Australia, and its fellow ‘minor party status’ neighbours of what was likely to befall them, should they rock the CCP boat.
As we reported here, there had already been increasing level of discontent between the two major trading partners, as Australia drifted actively towards the US-centered geopolitical sphere.
In recent weeks trade-tensions jumped the usually clearly-defined ‘terms of reference’, from ‘trade related actions’ to ‘political/diplomatic related actions’. Things are getting sticky, fast, and Australian business should be watching carefully.
Amidst the tsunami of Corona-news, there was a serious fracture in Australia-China relations, with 2 Australian reporters effectively being ‘evacuated’ from China after midnight raids by Chinese Police.
Bill Birtles, the ABC’s correspondent based in Beijing, and Mike Smith, the AFR’s correspondent based in Shanghai, boarded a flight to Sydney last week after the pair were questioned separately by China’s Ministry of State Security. A mix of plain-clothes and uniformed police allegedly arrived at their respective homes at around midnight, days prior.
Birtles had spent four days sheltering in Australia’s embassy in Beijing, while Smith took refuge in Australia’s Shanghai consulate as diplomats negotiated with Chinese officials to allow them to safely leave the country.
The departure of Birtles and Smith followed the detention of Australian TV presenter. Cheng Lei, who was detained in China last month on ‘national security’ matters, and is yet to be released, nor heard from in any significant capacity. This recent development means that for the first time since the mid-1970’S there isn’t a single accredited Australian journalist based in China.
This is a disturbing development, and hardly the position of two closely cooperating ‘friendly nations’. Australians involved in trade with China have reason to be concerned, and China is rightfully taking the opportunity to remind everyone as such. China clearly has the upper-hand in any negotiations, purely as virtue of their size and spending capacity. They most certainly other eager suppliers ready and willing to step in and fill any void left by Australian suppliers caught up in trade disputes.
Agricultural suppliers are bearing the brunt of China’s displeasure. Recent moves to restrict, reject or quarantine Australian agricultural supplies has seen suppliers of beef, barley, wine and other produce hit hard.
The Australian Financial Review reports that Fletcher International Exports founder Roger Fletcher, the biggest sheep meat exporter to China, is enraged at how out-of-hand the tensions between China and Australia have become.
Correctly, and somewhat ironically, an exacerbated Mr. Fletcher states “Just think, we have traded with Russia, Egypt — we even traded with Iraq during the war and it never got as bad as this………………”I just wish everyone would shut up. If the Chinese pull the plug on this I’ll be very angry at journalists and governments.”
There is no light at the end of this diplomatic tunnel. Australia has taken the extraordinary measure of “changing advice” on the official government website, ‘Smartraveller’ to “do not travel” for “risk of arbitrary detention based on national security risk”.
For the government of Australia to specifically advise the Australian public that it is not safe to travel to China due to “arbitrary detention”, we can safely say things have gone more pear-shaped than usual. One could reasonably be forgiven for assuming relationships are at an all time low.
Aside from an odd, and out of character response from China’s Embassy, in response to initial calls for the ‘Covid-investigation’, (whereby Beijing effectively told the Australians to ‘piss off’ via a public cable on their website reading “Cry up wine and sell vinegar,”) Beijing has remained, as always, calm and measured in their response. The Chinese do not have a habit of bombastic outbursts. It’s not in their nature, and particularly not at the highest levels of diplomacy. In Chinese culture, to ‘lose your cool’ is to ‘lose face’, which is just about the worst thing that can happen to any aspiring business or political leader. That ‘cultural paradigm’ should help to outline the diplomatic tightrope the Australians are walking.
If the Chinese have a problem with you, they’ll say so, politely. The polite rebuke will often be met with a commensurate (in their eyes) kick to the economic gullet, just as a reminder of who’s boss. Australia is in a tough position, and it’s only going to get tougher. A hard-nosed approach to China will end in tears, and not for China.
We’d refer readers to a comprehensive video report from the Australia’s national broadcaster (ABC) 730Report. Keep in mind, to all non-Australian viewers, that the ABC is a heavily left-leaning agitator, so more cynical viewers will view with caution.
Chart of the Day
Australia’s relationship with China took a turn for the worse this week when two journalists were forced to flee the country.