Australia has been feeling the chill of China’s diplomatic freezer for a number of years. The frostbite is now economic, with tariffs on barley, bans on beef and a travel warning potentially deterring tourists and students alike from returning to Australia when borders reopen.
Clearly Beijing is willing to use economic levers to prosecute political disagreements. But simply focusing on getting the political relationship “back on track”, and avoiding megaphones, is unlikely to change the fact that there are structural challenges in the Australia-China relationship that cannot be fixed through better diplomacy.
Australia’s China debate is caught in a stalemate between those focusing on dependence and diversification and those emphasising the need for “adult supervision”. Neither side appears to be convincing the other.
Instead, Australia needs to have a conversation about political and social resilience. Coercion, both threats and actual punishment, will be an enduring feature of Australia’s relationship with China. Even if the threats are not necessarily planned, or the costs ultimately minimal, the relationship between Australia and China has declined to the point that any shift is interpreted through a negative lens: there is so much smoke, everything looks like it is on fire.
China has been telegraphing its geostrategic goals for decades, and now has increased capacity and confidence in acting on those ambitions. China today – more authoritarian and ideological under president Xi Jinping – is increasingly willing to force international compliance through the use of coercive statecraft. The logic of Xi’s China, coupled with growing internal pressure and expanding interests abroad, can only mean more conflicts will arise with more countries.
Australian interests and values regularly clash with China’s foreign and domestic behaviour, as they have in the past. Australia is not unique in this respect: France, the United Kingdom, New Zealand and the Czech Republic are just some of the countries that have been embroiled in conflict with Chinese diplomats in recent weeks.
A renewed focus on the factors within Australia’s control is warranted. Calls for trade diversification will not change China’s position as our largest trading partner in the medium-term. There can be adjustments around the edges – and this might be prudent in some sectors – but Australia and China’s economic relationship was built on complementarity, not charity.
Australia’s mindset needs to adjust to this new reality. At present, we have fallen into a predictable and stagnant cycle, where Beijing demands Australia “fix things” – code for conceding to the Chinese Communist party’s demands – and Canberra is then criticised for mismanaging the relationship. More often than not, China may not expect the decision to be reversed, but intends to deter Australia – or any other government – from crossing it in the future.
Instead, it would be to our benefit if political leaders, bureaucrats and business leaders alike had a level of sangfroid about threats from China as they become regular fixtures in Australia’s future. This will be understandably harder for business facing real losses than for politicians, but taking account of political risks is not new. Government agencies can support China-focused businesses to prepare for these risks and mitigate the fallout. Better coordination will be needed between federal and state governments.
Understanding China’s willingness and reasons for using economic coercion in the past and against other countries provides a useful baseline to raise awareness and put the consequences in context.
First, Australia is not alone – recent history is replete with examples: South Korea in 2017, the Philippines and Japan in 2012 and Norway from 2010 to 2017. Some industries were hard hit but in no case was an economy brought to its knees. The logic of markets eventually saw the resumption of more normal commercial ties.
Second, we should expect Beijing to lash out more and more often. China is a rising power with expanding interests. These will increasingly clash with others, and growing internal pressures are placing the Communist party leadership under greater strain. More disputes will arise with more countries.
Fostering resilience is more than a level of trade diversification. Partly it involves resisting the Chinese party-state’s behaviour on our territory, such as protecting Australian institutions from undue influence. It is working to protect Chinese-language communities from interference in Australia, and preserving free speech in Chinese-language media in Australia.
Developing resilience in these communities and institutions alike is essential for Australia’s democratic and multicultural society. It also matters for our prosperity: the calls for Australia to diversify and decouple will only become louder. At a certain point, these calls become a self-fulfilling prophecy. In the annual Lowy Institute poll, three-quarters of Australians say we are too economically dependent on China. The same number say Australia does not pressure China enough to improve human rights. Trust in China has reached record lows.
Arguing to prioritise domestic resilience is not to hit pause on diplomacy. Australia can and should remind China of the importance of preserving freedoms in Hong Kong. While encouraging better treatment and release of Australian citizens in China, we should condemn human rights violations in Xinjiang and elsewhere because our morals and our public demand it.
Resilience is also a mindset. We may be punished for staying true to our values, and we should be prepared – psychologically, as well as pragmatically. It goes without saying we should not compromise on our fundamental beliefs. But more attention is needed on the factors that are wholly within our control. Beijing may be immune to our condemnation of its coercive tactics, but the resilience of Australia’s liberal democratic institutions and expert industries is in our hands.
• Natasha Kassam is a research fellow at the Lowy Institute. Darren Lim is a senior lecturer in the School of Politics and International Relations at the Australian National University