Comrade Dan follows Silk Road

Illustration: Johannes Leak

The juxtaposition of two exclusives on Thursday’s front page was telling. In the first story, Damon Johnston and Rachel Baxendale revealed Victoria is locked in final-stage negotiations with Beijing over an investment road map, as part of the communist regime’s pushy Belt and Road Initiative. In the second, below a picture of Victorian Premier Daniel Andrews at Tiananmen Square, Greg Sheridan reported on a new study showing Australia was more dependent on China across strategic sectors of the economy than any other Five Eyes nation. There is a danger in embracing the dragon, for sure, but equally in decoupling from the dance. As we recalibrate our relationship with the rising economic and military giant, we need to keep our eyes open, uphold our values, pursue the national interest and show a united front — as we have, until recently, in our pandemic response.

Daniel Andrews visits Tiananmen Square in China. Picture: File/@danielAndrewsMP/Twitter

China has many faces, as changeable as a weathercock. Lately, we’ve felt its scorn and seen a glint of its charm. Punishing our barley and beef producers because of Canberra’s push for an international inquiry into the origins of COVID-19 was brutal and calculated. In a twist, China is making it easier for Australian iron ore to enter its ports — naturally, given its dependence on our rocks because of problems with supplies from Brazil. Intemperate verbiage from Beijing’s sock-puppet news outlet and mouthy envoys is losing its oomph. At times, however, it’s like being in an abusive relationship. National leaders have wisely kept calm and emphasised mutual interests, while some state politicians have played to the cheap seats at the visitors’ end.

Victorian Treasurer Tim Pallas. Picture: AAP

Victorian Treasurer Tim Pallas has gone out on a limb. Amid trade and pandemic inquiry tensions, Mr Pallas savaged the Morrison government for “vilification” of China. He described the government’s stand as “dangerous, damaging and probably irresponsible”, and laid direct blame on Canberra for the 80 per cent tariff on barley farmers. At best this is wrong, but in the context of the broader issues it is foolhardy. The Andrews government has simply lost the plot, mesmerised by the rhetorical extravagance of Belt and Road marketing. Article 1 of the framework agreement signed last October states Victoria and China must: “Adhere to the principle of mutual consultation, joint efforts and shared benefits. Bearing the Silk Road spirit of peace, co-operation, openness, inclusiveness, mutual learning and mutual benefit.” President Xi Jinping serenaded federal parliament in 2014 with that tune.

COMMENT: When Beijing is under pressure, it frequently resorts to Cold War insults and propaganda. Several unpleasant conclusions are inescapable, writes Greg Sheridan.https://t.co/LzlcPLgbjS

— Australian Opinion (@AusOpinion) May 19, 2020

Victoria, the only state to ink a deal of this kind with China, should adhere to the advice from national security agencies. Don’t do it. While Labor’s unsure deputy leader, Richard Marles, pussyfooted around the issue, more sensible opposition heads saw the agreement as “bad policy and bad optics”. Poor countries are now finding Beijing’s debt-trap diplomacy has bite. Given Victoria has an AAA credit rating and money is preposterously cheap, the state should finance any big, feasible infrastructure projects on its own. If he needs a partner, Mr Andrews should call Scott Morrison or tap into industry super funds. The murkiness of the deal, due to be signed by the middle of this year, is also disturbing. Pulling down shutters on public information is from the Chinese Communist Party’s school of disclosure. Open up, Victoria.

Daniel Andrews meets with China’s Foreign Minister Wang Yi in Melbourne in 2017. Picture: File

The pandemic has awakened Australians to our trade over-reliance on China. One-third of our exports go there, equivalent to sales in our next five markets. Disruption to supply chains has harmed manufacturing. A new report by London think tank The Henry Jackson Society found Australia is dependent on China across 595 categories of strategically important goods, especially in hi-tech areas, such as the internet of things, big data and biotechnology. This compares with the US at 414 and Britain at 229. The study calls on Five Eyes countries to conduct stocktakes of exposure to China in raw materials, components and complex supply chains, and for strategies to deal with it. As we argued on Thursday, the retreat from globalisation presents opportunities. But we should reject protectionism. Fortifying our industrial base by orthodox policy reform, as suggested by two former top Canberra mandarins, will encourage investment, productivity and growth that are not tied to the daily temperature in China.