More to China than business

Industry group leader Innes Willox has added a welcome voice of reason to how business and government should relate in the face of continued provocations from our biggest trading partner, China. As a former adviser and chief of staff to long-serving foreign minister Alexander Downer, Mr Willox has the depth of experience needed to know where commerce stops and issues of sovereignty begin. Unlike some of his commercial colleagues, who want Canberra to back down, Mr Willox says government efforts should be focused on helping to open new trade opportunities rather than seeking to appease escalating demands from Beijing.

Canberra must work to keep lines of communication open with the Chinese Communist Party leadership but also use its diplomatic assets to help open the door for business in the world’s other major markets, including India, Latin America and a newly unshackled Britain. With first-hand exposure to the CCP leadership’s past indifference on issues of human rights, Mr Willox says Australia is currently being harassed and bullied to tease out who stands on whose side in the fight for post-pandemic economic and strategic dominance. Willox says while we might not quite be a pawn in the global realignment that is occurring, Australia is certainly being used as a straw man to demonstrate what can happen if you question or stand in the way of the new kid on the global block. This is a much more sophisticated view than one that has been expressed by other industry leaders who argue that government should be willing to compromise to safeguard the nation’s economic interests.

The government has angered Beijing and some local business figures by taking a hard line on foreign investment from Chinese-government backed companies, blocking the takeover of construction and other businesses with strategic contracts and assets. Australia is well within its rights to block foreign government interference, and its actions and policies regarding investment are in line with those of other countries, the US and China included. A list of 14 points of grievance, issued by China, that Australia should address to restore normal relations are beyond sensible consideration. Among complaints are banning Huawei from the rollout of our 5G network, the introduction of foreign interference laws and Australia’s call for an inquiry into the origins of the COVID-19 virus. The Chinese Communist Party leadership wants Australia to stop speaking out on sensitive issues such as the South China Sea and allegations of human rights abuses in Xinjiang. Seasoned China watcher Rowan Callick has outlined how giving in to China’s demands will lead only to more demands that must be satisfied as a public demonstration of obedience. Canberra must be respectful but prepared to play the long game on normalising relations.

In the meantime, global markets are showing that trade relationships are a two-way street. As we reported on Friday, despite tariffs and bans Australia exported $148bn of goods to China in 2020, the second-highest ever and a fall of only $6bn, or about 4 per cent, from the record level in 2019. Exports were still up almost 10 per cent on 2018, the third-biggest year. Higher prices for iron ore and continued sales of liquefied natural gas blunted the impact of China’s trade bans in other commodities.

Expectations are that 2021 will continue to be a bumpy ride both economically and in relations with China. The task for government is to safeguard the nation’s values and insist that global rules are honoured when it comes to trade.