Why now is the time for business to stand up to China

Australia is muscling up its response to China even as more trade threats loom to new industries. But a strategic expert believes it’s the right call – and smart businesses will follow suit.

AUSTRALIA will not bow or “trade its values” in response to threats, Prime Minister Scott Morrison warned as China ratchets up its economic crackdown.

China has been shutting off, limiting or warning against trade in key sectors in recent weeks, including beef, barley, tourism and now education.

Foreign policy experts say there will be more actions to come, with wine and seafood likely targets, but have backed in Mr Morrison returning fire.

Queensland has $28 billion in trade exposure with the Asian economic powerhouse which could be at risk if China chooses to shut down trade.

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China’s President Xi Jinping. Foreign policy experts say China’s increased foreign policy aggression could backfire. Picture: Andy Wong/AP Photo

China’s actions followed Australia leading the charge for an inquiry into COVID-19’s origins and proposing tougher foreign investments laws. But Mr Morrison yesterday ramped up his rhetoric on China.

“One thing Australia will always do is act in our national interests and never be intimidated by threats from wherever they come,” he said. “We won’t bow or trade away our values when it comes to being an open trading economy.”

Telecommunications, foreign interference, human rights and freedom of navigation, all hot button issues with China, were listed as issues where Australia would stand firm on its national interest.

Prime Minister Scott Morrison says Australia will continue to act in its national interests. Picture: AAP Image/Mick Tsikas

Australian Strategic Policy Institute executive director Peter Jennings said China’s increased aggression, which has been seen globally, was about distracting its own citizens’ attention away from the Communist Party’s mishandling of COVID-19.

But he said the strategy could prove counter-productive as it pushes countries and businesses away, as the cost of working with China grows too high.

“It will slowly turn the world away from them. They will look for other markets and eventually find other markets. The people damaged by this most are the Chinese people,” Mr Jennings said. “Smart businesses will already be factoring in a much higher risk of doing business with China and looking to diversify.”

He backed in Mr Morrison’s strengthened position, saying it was likely here to stay.

“Australia has spent the better part of a decade essentially shutting up and taking the money. COVID was the straw that broke the camel’s back. I believe the government has had a gutful of taking this attitude from China,” he said.