Why China Fails Australia (and Allies): QuickTake

Photographer: Cameron Spencer / Getty Images

China and Australia have become entangled in a deepening political spit that is spilling over into trade. Although some Chinese cities suffered power outages in December, Beijing authorities continued to block coal shipments from Australia, stressing their determination. Miners are not the only exporters of Down Under who are finding it harder to gain access to their biggest market as tensions build up, and Australia alone is not feeling the heat. Other countries that have clashed with China, including Canada, the United Kingdom and India, have joined Australia to promote co-operation and sharing of intelligence, while the incoming US president has promised a more united front against Beijing.

1. What did China-Australia spit on?

Tires have been turning downwards since 2018 when Australia accused China of involvement in its domestic affairs, passed a new law against foreign interference and espionage. It also prevented Huawei Technologies Co. is building the country’s 5G mobile network, one of the first countries to do so, citing national security. The atmosphere worsened in April after Prime Minister Scott Morrison’s government called for an international inquiry into the origin of the coronavirus that causes Covid-19. In November, a Chinese Foreign Ministry spokesman tweeted an edited image of an Australian soldier holding a knife to the throat of an Afghan child – a reference to an ongoing investigation into war crimes. At a time when Chinesewolf warrior ”diplomats are getting more combative, Morrison’s the claim for apology was dismissed.

2. What was the economic impact?

Considering China is Australia’s by far the best trading partner, the impact was relatively small – although the individual sectors affected would differ. As of May, China has hit crippling tariffs on Australian barley; banned beef from four major meat processors; launched an anti-dumping investigation into Aussie wine which led to massive levies; and told importers to stop buying cotton and lobster. Wood exports were banned and at least $ 500 million of coal was delayed for months from Chinese ports – apparently one of the catalysts for the power outages. Although the retaliation generated countless headlines and prompted some exporters to call on Morrison, the combined impact from January saw a loss of just 0.3% of Australia’s gross domestic product, or A $ 6 billion ($ 4.7 billion). ), amount to. according to government figures. Sales of iron ore, the country’s largest cash cow, are still booming.

Untouchable?

Australian iron ore export strengths offset weakness elsewhere

Australian Bureau of Statistics, Bloomberg

3. Why is China doing this?

After months of blackout, the Chinese embassy issued a list of 14 grievances in November. These included Australian decisions to reject Chinese investments for national security reasons, to provide funding for what he sees as anti-Chinese brainstorming, and ‘incessant unintentional interference’ in Chinese affairs. Taiwan, Hong Kong and Xinjiang, and in the South China Sea. It also cited allegations of racist attacks on Chinese people and accused the country’s independent media of being antagonistic. But state-backed scholars in China have said that the authorities in Beijing are most angry is Morrison’s efforts to allow independent investigators into Wuhan, which they say is a minor anti-Chinese sovereignty, as well as his government’s willingness to deal with to echo and coordinate the US president. Donald Trump’s anti-China campaign. “Honestly, we have heard too many negative voices and seen various negative movements from the Australian side,” Foreign Minister Wang Yi said in December. President Xi Jinping’s government has a record of using trade as a baton South Korea, Japan and Taiwan have all experienced retaliation in recent years.

4. Is there a way out for Australia?

This is not obvious. Chinese diplomats and state media said it was to the government in Canberra to repair the ties, but they did not make it clear in public what Australian actions would be enough to stop the trade revenge. Chen Hong, director of the Australian Study Center at East China Normal University in Shanghai, said China was unlikely to withdraw until it saw significant action, not just rhetoric. Morrison has indicated he does not want to respond to any of the 14 grievances; it seems that he and his ministers are waiting for China to lower the temperature, so that a new “point of establishment ”can be found in the relationship. Meanwhile, by the end of the year, Australia had formally challenges China at the World Trade Organization.

5. Is Australia the only country targeted?