Late last month, in the first senior face-to-face meeting between the new Biden administration and Chinese national security officials, many were stunned to watch what had been a simmering dispute burst into the open. What should have been an anodyne four-minute photo op turned into an hour-plus angry war of words. But the only surprise here is if the American team was surprised. Communist Party General Secretary Xi Jinping has begun training weapons once aimed against domestic competitors outward for a few years now. There are many examples, but there is no better canary in the Chinese coal mine than Australia.
The CCP has implemented a wide range of tariffs against Australian industries, and even against specific companies, in response to actions it considers an affront. To understand just how important the People’s Republic of China is to the Australian economy, the PRC buys 32 percent of all exports (twice its closest competitor), almost 100 percent of certain key mineral exports, and 31 percent of education “exports”—i.e., Chinese students in Australian schools.
But all those Chinese yuan have failed to deliver the subservience Beijing expects from its economic minions. In 2016, Canberra sounded the alarm in a white paper about, among other troubling issues, the Chinese military buildup in the South China Sea, warning of growing China-driven “friction” that necessitated a major increase in defense spending. In 2017, Chinese influence-buying scandals and leaks about a possible Chinese mole in parliament led to new laws designed to keep Beijing out of Australian politics. And by 2018, the Australian government was concerned enough to ban Chinese tech firm Huawei from its 5G networks, the first nation to do so. But the final straw from the Chinese Communist Party’s perspective was Australia’s response to the COVID-19 pandemic, including an early call from Prime Minister Scott Morrison to investigate the origins of the virus.
How has China responded? Like a nest of hornets. Early on, it was clear that Beijing hoped for a return to the days when pro-China politicians and business leaders Down Under fussed about even the smallest perceived slight to their friends in China. And the responses to the 2016 white paper reflected a mostly tolerant dissatisfaction with an errant child, with the Beijing foreign ministry hoping for a return to a “correct and positive view.” Alas, the wayward Aussies refused to revert, and Xi has escalated accordingly.
In January 2019, Canberra rescinded the visa of Huang Xiangmo, an influential Chinese billionaire accused of seeking to influence Australian politics on Beijing’s behalf, and a month later announced its Huawei decision. Beijing responded with a partial import ban on Australian coal (at five different ports in northern China), and major delays on clearing Australian coal imports at other ports. Coal is Australia’s top foreign exchange earner, and as recently as 2018, Australia supplied almost half of China’s coal imports. A Chinese foreign ministry spokesman said that “the goals are to better safeguard the legal rights and interests of Chinese importers and to protect the environment.”
Things only got worse. As the world began shutting down in the early days of the pandemic, Beijing hit Australian barley with five-year anti-dumping and anti-subsidy duties adding up to 80.5 percent, and it halted beef imports from four major Australian meat processors. Barley is one of Australia’s top three exports to China, fully half of the country’s export market for that crop. (China is the world’s largest beer maker. Who knew?) Three months later, Beijing came for the Australian wine market, “investigating” and ultimately imposing “anti-dumping” tariffs of up to 200 percent. China had accounted for 39 percent of Australian wine exports in the first nine months of 2020.
September brought a Chinese ban on all barley imports from Australia’s largest grain exporter, claiming pests were found. In October came an order to cotton mills to stop buying Australian supplies (China is Australia’s largest cotton buyer) or be hit with 40 percent tariffs; a halving of copper ore imports from Australia; another barley company import ban; new live seafood inspections that effectively barred the importation of lobsters from Australia; and a ban on Australian timber—once again, after pests were allegedly found (China is fully 90 percent of the wood pulp market for Australia). Nor have the bans slowed in 2021: Last month, China halted Australian hay exports, another $100 million-plus market.
As Beijing is well aware, Australia’s dependence on the Chinese market is a serious weakness; China takes up about a third of all Australian goods exports (and accounts for about 20 percent of Australian imports.) Together, the various bans, tariffs, and other non-tariff barriers add up to about $3 billion in costs to the Australian market, out of an export market of close to $300 billion. Why not more? A few reasons: Some products can find other markets, including inside Australia itself. In addition, and perhaps more importantly, Beijing hasn’t touched the most valuable of Aussie exports, iron ore, worth more than $60 billion in annual sales to China alone.
But the smallish impact in overall numbers should not conceal the devastating impact to specific Aussie industries that have come to depend on their Chinese buyers. Their distress alone has serious political implications inside Australia, as Xi knows all too well. And the Chinese leader has proven himself more than willing to use his foreign ministry to stir the political pot down under with an aggressive crudeness that itself is a harbinger of yet more trouble between China and those who dare to call it out.
The People’s Republic has taken to denying visas to Australian researchers, detaining Australian nationals on Chinese soil, and otherwise using its police state powers to manipulate Australian public opinion. And for a country that spends a good deal of time railing against outside interference in its domestic affairs, China has made an art form of trolling in foreign internal affairs. Much of this comes from the fine Twitter pen of Zhao Lijian, the foreign ministry’s uber-troll (who had a faked picture of an Australian soldier holding a bloody knife to a child’s throat pinned to the top of his twitter profile until recently), though he is backed up by other state mouthpieces, including the state-run Global Times and others.
Chinese trolling has taken the form of attacks on Australia’s human rights record, accusations of racism (including official travel warnings that will eventually have serious implications for the Australia’s lucrative tourism and education markets); and complaints that the Aussies are “parroting” Americans by demanding scrutiny of the coronavirus’ origins; that they have joined an “axis of white supremacy”; and are committing human rights violations in their “mistreatment” of indigenous people. There have even been direct threats, including a specific warning of a “counterstrike” after Australia condemned Chinese actions in Hong Kong.
In response to this litany of threats and attacks, the United States has stood firmly with Australia in both the Trump and Biden administrations. New Secretary of State Antony Blinken, like Mike Pompeo before him, recently condemned what he called “Beijing’s coercive behavior,” which he said “threatens our collective security and prosperity, and … is actively working to undercut the rules of the international system and the values we and our allies share.” Last summer, the Trump administration expanded U.S.- Australia military cooperation and upped coordination with the so-called Quad (the U.S., India, Japan and Australia). The Biden administration has called on Beijing to ratchet down tensions with Canberra.
But other than generic expressions of solidarity and the imperative of a quick run for Australian wine, why should Australia’s ill treatment at the hands of China’s increasingly totalitarian regime register with Americans? It’s quite clear, actually. Beijing once circumscribed its range to China’s actual and claimed territories (think Taiwan, Hong Kong, the India-Chinese border in the Himalayas, the South China Sea), and has steadily been venturing further abroad using its police state tactics to influence Europe, the United States, and most easily, Australia.
Canada felt Xi’s wrath when, at Washington’s request, it detained a senior Huawei official wanted for sanctions violations in the United States. Two Canadian citizens are now being held—Iran style—in Chinese prisons on false charges, presumably awaiting Canada’s capitulation. Americans too are increasingly being subjected to “exit bans.” And it’s only a matter of time before American businesses and their personnel are in the crosshairs, sanctioned or worse like the American, British, and Canadian government officials targeted by Beijing in late March. Australia is simply the lowest-hanging fruit in Beijing’s newfound willingness to engage in coercive economic, political, and military influence operations.
What should be done? Australia alone cannot stand up to Beijing. And it needs more than signals of moral support. The right call is first to deny China the tools it needs to leverage its smaller neighbors: reevaluate unbalanced economic dependency on Beijing’s imports and exports and diversify supply chains; rethink financing to state-owned or controlled Chinese firms used to extend Beijing’s tentacles; create trading partnerships of like-minded nations; impose costs for human rights and treaty violations such as in Xinjiang and Hong Kong. In short, it is past time to allow Xi Jinping to make choices about how he wields his power abroad and at home. No one seeks conflict, but there are many ways of isolating the Chinese Communist Party and its malign leaders. Best to do so before we are all Australia.
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