China’s Solomons deal could lead to ‘quiet takeover’ of Aussie economy

If China builds a naval base in the Solomon Islands there’s a very grim prediction for how it could play out for Australia.

ANALYSIS

What will life be like with a Chinese naval base as Australia’s new neighbour?

That’s the question every Australian should be asking themselves today in the wake of China’s new security pact with the Solomon Islands.

The very same question that Canberra is not asking during its fantastical election campaign.

There are three dimensions to the answer: regional, national and global.

First, over time, all South Pacific islands will need to reconsider their international allegiances. Some may witness opportunistic coups that are backed by China. Or, at least, passively sponsored revolutions that come about in pursuit of Chinese riches by local elites.

Solomon Islands Prime Minister Manasseh Sogavare and Chinese Premier Li Keqiang attend a signing ceremony at the Great Hall of the People on October 9, 2019 in Beijing, China. Picture: Thomas Peter-Pool/Getty Images

That might develop into more bases, given that’s what China is after. If left unchecked, the “Pacific family” will slowly transform into micro-Chinese satraps, just as they are currently a bit like US democratic cargo cults.

As China slowly builds its South Pacific military presence, Beijing will become commensurately more bullying to Canberra, which brings us to the domestic implications.

Canberra will try to resist China’s gunboat diplomacy but the cut lines of geostrategic connection to Washington will force it to hedge as well. The same with Wellington.

What will Beijing demand? We already know because it told us so in 2019 in its 14 grievances list that included:

– Scrutinising Chinese foreign takeovers

– Banning Huawei

– Enacting foreign interference laws

– Stigmatising government relations

– Calling for a Covid inquiry

– Human rights support

– Resisting occupation of the South China Sea

– Resisting Belt and Road

– Parliament and media objecting to the Chinese Communist Party.

These things would be the first to go as Canberra slowly wilts in the face of Chinese military pressure.

No shot will need to be fired as a quiet takeover of the Australian political economy transpires. Longer-term, nastier outcomes will become possible for anybody deemed hazardous. See Hong Kong.

The draft security co-operation agreement between China and Solomon Islands was leaked on social media on March 24. Picture: Twitter

China and the Solomons signed a security pact this week but the final agreement hasn’t been released yet. Picture: Twitter

Finally, the global implications of a Chinese Solomons Islands military base will be that ANZUS withers on the vine. This will communicate to the planet that the US hegemony is finished Down Under and therefore pretty much worthless everywhere.

All of this begins and is encouraged by a Chinese naval base in the Solomon Islands. We could allow it to develop and deal with it later at the risk of the above, as well as the risk of war directly with China in the form of its base.

Or we can act before it is built in three easy steps.

First, discuss the Solomons Island issues in public instead of burying them behind the very culture war debates dominating the election that are, ironically, only possible if China is kept out of the South Pacific.

Second, recalibrate a major soft power push in the Pacific to turn the Solomons around.

Third, if that doesn’t work then do what we have to with the tools of hard power statecraft to ensure that the base is never built.

Time is short.

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geopolitics and economics portal. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review. MB Fund is underweight Australian iron ore miners.