Australia and China’s cordial economic ties, established over the last three decades, have been soured this year over several points of friction. China has been unhappy with Australia becoming more vocal about its handling of Uighur Muslims and the protests in Hong Kong. But it was Canberra’s appeal for an independent global inquiry into the origins and initial response of Covid-19, that really riled up Beijing.
Australia’s staunch stances in recent months exposes a latent fear of China’s growing influence in the country’s domestic space, ranging from politics to educational institutions to real estate. China’s rising presence in the Indo-Pacific region despite the pandemic has only added to this distrust. But despite the economic cost, Australia has made one thing clear: it will stand for its “values” and not be “intimidated.”
China is Australia’s largest trading partner in terms of both exports and imports. China’s share in Australia’s exports reached a record A$117 billion, or 38 per cent, in 2019, more than any other country. Australian sectors like mining, tourism, education benefit from trade with China. China even imports products such as milk, cheese, wine and meat.
The Asian superpower’s investment in the mining and agriculture sector also plays a big part in this. Over the years, it has been increasing its investment in Australian infrastructure and real estate products too. The maximum number of foreign students in Australian universities and tourists also originate from China.
So far the Chinese economic aggression over tariffs has been limited to agriculture and food production. The spat has not touched the one industry that contributes heavily to their economic relationship: heavy metals. Perhaps the two sides know that going into this area will leave a heavier impact, one that would be too hard to reverse.
Points of friction
This year, at least two issues have dominated the deteriorating relationship between the two countries.
Australia’s Covid-19 inquiry: In April 2020, Australia’s Minister of Home Affairs Peter Dutton suggested the start of an inquiry into the origins and the initial handling of the coronavirus. This was supported by the Australian Foreign Minister as well as Prime Minister Scott Morrison. Morrison called the suggestion “entirely sensible and reasonable”and asserted that the world ought to know everything about a virus that had claimed so many lives across the globe.
To this, China’s response was multi-pronged. The first reaction came from the Chinese Ambassador to Australia Cheng Jingye, who alleged that Australia was teaming up with the US to spread “anti-China propaganda”. Jingye further called for boycotting Australia as a tourist and higher education destination and banning Australian products like wine and beef.
In May, Chinese authorities announced imposing an 80 per cent tariff on barley imports coming from Australia. China is the most important market for Australia barley. Days after the announcement China imposed tariffs totaling 80.5 per cent. China also began a trade probe into Australian wine and suspended import permits for four large beef processing plants.
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Tension over journalists: The second diplomatic spat began with the detention of Cheng Lei, an Australian news anchor based in Beijing by the Chinese authorities after she was suspected of “criminal activities” that endangered China’s national security. Australian government said the journalist was held under “residential surveillance” at an unknown location.
After this, two more Australian journalists working in China were questioned and declared persons of interest in the Cheng Lee detention case. Both the journalists were visited by Chinese police after midnight and were asked to report for questioning by the Ministry of State Security.
Following their house searches, the journalists sought refuge in Australian diplomatic missions, as they were not allowed to leave the country. The tensions were on full display for five days after which China finally agreed to allow them to fly back to Australia. After their departure, there are no more Chinese reporters employed by the Australian media left in the country, a first since the 1970s.
Few days after their departure, China’s state news agency Xinhua released a report that claimed the Australian intelligence had raided an unspecified number of Chinese journalists stationed in Australia and that this “grossly violated” their rights. The Australian authorities had no response to this allegation.
Ideological issues: The two countries have also been at loggerheads on other ideological issues previously too. After reports of China keeping Uighur Muslims in state-run detention camps surfaced, Australia was swift to respond and expressed “deep concern” over the “human rights situation.”
Similarly, after China imposed the National Security Law in Hong Kong, Australia suspended its extradition treaty with Hong Kong and said the law undermines Hong Kong’s autonomy and suppresses opposition to Mainland China. Australia also decided to extend visas for Hong Kong residents. In both instances China responded staunchly and asked Australia to not meddle in its “internal matters.”
A search for ‘like minded’ allies
Canberra has started looking for way to wean itself away from this excessive Chinese dependence and is keen to strengthen its ties with more ideologically compatible allies like India, Japan and the United States. In fact, Prime Minister Scott Morrison expressed the need to connect with more “like-minded democracies” to counter the Chinese aggression and expansion.
At the Quadrilateral Initiative, or the “Quad” with counterparts from India, United States and Japan, Australian Foreign Minister Marise Payne highlighted the need for an “open, resilient and inclusive Indo-Pacific region, that is governed by rules and not power.” Australia also focussed on vital sectors of its economy like minerals, for which it is heavily depends on its trade with China.
Since its inception in 2007, the Quad has been labelled by analysts as an attempt to counter China’s growing footprint in the Indo-pacific region. The meeting comes at a time when three out of four participant countries are at loggerheads with China on some issue or another.
India has been involved in a border standoff with China that has now lasted for over five months. Despite several rounds of “disengagement” between the two sides, the conflict has not died out. Similarly, under the Trump administration, US-China ties have been at their worst in decades. At the Quad meeting, US Secretary of State Mike Pompeo accused China’s governing party of “exploitation, corruption and coercion”.
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