What is China’s endgame? Australia’s relationship at all-time low after offensive tweet

What does China want from Australia? Experts say the Asian power’s actions could have hidden motivations and it won’t easily be resolved.

The dramatic escalation of tension between Australia and China this week has raised questions about what China’s endgame is.

Relations dropped to a new low on Monday after Chinese Foreign Ministry spokesman Zhao Lijian tweeted a “repugnant” fake image of an Australian soldier holding a knife at the throat of an Afghan child, drawing condemnation from Prime Minister Scott Morrison.

The provocative act shocked Australians and comes after a series of Chinese trade decisions against Australian products.

China has introduced huge tariffs of up to 212 per cent on Australian wines for alleged dumping and 80 per cent tariffs on barley, as well as suspending barley imports over allegations of pests. Other products impacted by actions include beef, copper, cotton, lobsters, sugar, timber, tourism, universities, wheat and wool.

Last week it emerged that 53 ships carrying Australian coal have been stuck at Chinese ports for more than a month without being able to offload their cargo. Some of the ships left Australia in May.

While China has argued its actions have a legitimate basis, Australian Strategic Policy Institute defence director Michael Shoebridge believes it could also show that China uses “trade as a weapon”.

Earlier last month a deliberately leaked document was handed over by the Chinese Embassy in Canberra to Nine News, The Sydney Morning Herald and The Age revealing 14 disputes that China believes are “poisoning bilateral relations”.

“China is angry,” an official reportedly said after the leak. “If you make China the enemy, China will be the enemy.”

RELATED: China’s ominous South China Sea warning to Australia

Beijing’s foreign ministry spokesman Zhao Lijian’s retweeting of the fake image has caused outrage.

China’s list of grievances included Australia’s calls for an inquiry into the origins of COVID-19, government funding for an anti-China think tank, taking a stance on the South China Sea territorial dispute, “unfriendly” media reports on China, “thinly veiled” accusations that China is behind cyber attacks, and the blocking of foreign investment in Australia as well as Huawei from the 5G rollout due to “unfounded” security concerns.

The list was published on November 18, the day after Australia and Japan agreed “in principle” on a potential military pact, which Chinese state media described as “dangerous”.

A Chinese official reportedly said that if Australia backed away from the policies on the list, it “would be conducive to a better atmosphere”.

However, experts have pointed out there were other factors at play.

RELATED: China lists 14 disputes that are poisoning relations with Australia

Prime Minister Scott Morrison asked for Twitter to remove the image overnight, but without success. Picture: Adam Taylor

HIDDEN TRADE MOTIVE

China may well be punishing Australia for certain political decisions but that’s not the full story.

Earlier this year, China signed a trade agreement with the US in which the Asian superpower agreed to buy at least $US200 billion ($A270 billion) in US products over two years, including agricultural products.

Lowy Institute senior fellow Richard McGregor told news.com.au China had made a deliberate political decision to punish Australia but a good side benefit for them was that it helped them implement its trade deal with the US.

Other experts say China would have decreased its trade with Australia regardless, particularly on barley and wine.

Dr Scott Waldron of the University of Queensland has studied Chinese agricultural tariffs extensively and said China had been considering restricting Australian barley imports since 2018 at the latest, amid concerns it was overly reliant on imports. China produces only around 20 per cent of the barley it needs.

“The wine case is very similar,” Dr Waldron told AFP. “China’s had a really active industry policy for wine for more than a decade,” and an industry body that is increasingly keen to protect its home market from imports.

RELATED: Calls for boycott of Chinese goods over Christmas

A woman looks at a bottle of Australian wine at a supermarket in Hangzhou, in eastern China’s Zhejiang province. Picture: STR/AFP

Dr Waldron believes the sanctions are as much about China’s security goals, shaping its own economy and protecting local jobs.

He said China had taken similar action against US corn, using subsidies and import quotas to reduce China’s dependency on imported corn from 90 per cent to 9 per cent today.

“There are domestic trade and industry policy reasons why they are doing these things,” he said.

Stephen Kirchner, a trade and investment expert at Sydney University’s United States Studies Centre, said the action on coal was something that came up every year “because China has this soft quota on coal imports”.

“It’s a calendar-year quota, so you start to bump up against the quota round about this time,” Dr Kirchner said.

RELATED: Where sick fake image originated

China, under the leadership of President Xi Jinping, has made calculated attacks this year on Australian trade. Picture: Kevin Frayer/Getty Images

BUT CHINA’S ENDGAME IS STILL POLITICAL

While China’s displeasure with Australia may be a convenient excuse to take action on trade, experts believe the overarching endgame for China is still political.

Mr McGregor said there appeared to have been a unified decision made to punish and pressure Australia over political disagreements using trade.

“They want an Australia which is less critical of China and more accepting of what China regards as its core interests,” he said.

Australia is also being used as an example for others, Dr Wilson suggested.

“This is really about sending a message to other countries – ‘Keep your mouth shut or we’ll do to you what we’re doing to Australia,’” he said.

China’s foreign ministry spokesman Zhao Lijian defended the trade measures last week as a legitimate move to protect Chinese winemakers and consumers.

Mr Zhao instead blamed Canberra for strained ties with Beijing, saying, “Australia should do some deep introspection” and “reflect on whether they have respected China’s interests”.

While there had been some hope the dispute would be resolved, with some interpreting both Australian and Chinese statements as conciliatory, Mr McGregor said the decision to tweet the fake image of the Aussie soldier showed this was “nonsense”.

“Nothing is going to get better quickly,” he said. “Don’t expect this to be solved overnight.”

Mr McGregor believes Australia won’t be getting its trade with China back on track anytime soon.

“We have to find other markets, which is difficult … some producers are going to feel it,” he said.

Politically, Mr McGregor said Australia will need to “find the bottom” and said there could be more trade sanctions.

“We need to find some level of political dialogue as we need the ability to talk to each other – but the relationship is not going back to where it was.”

– with AFP