Time to sharpen national, global dealings with China

Australia’s wheat and barley growers, winemakers, coal companies and beef, lobster and timber producers doubtless agree with John Howard and Peter Costello that our largest trading partner remains critically important to our economy. Millions of Chinese citizens shivering through subzero winter temperatures for want of coal-fired heating also would agree mending fences would be beneficial for both countries. The former prime minister and treasurer are correct that the key to getting trade back on track is re-establishing mutual trust and respecting differences. But that is easier said than done while Xi Jinping’ s government plays cat and mouse, refusing to deal with its Australian counterparts.

Mr Xi is a very different, more aggressive President than his predecessors, as Mr Howard and Mr Costello told Troy Bramston in reflecting on their dealings with China from 1996 to 2007. As they said, Australia should not waver from defending its values or sovereignty. What is needed is to find common interests, Mr Howard said. It is a sensible approach — presuming China will respond. It may not, for years. Scott Morrison is hopeful about a reset of the relationship in 2021. But, as he warned on Friday, it will not happen until Mr Xi and his officials answer Canberra’s calls.

Paul Monk, who led the China desk of the Defence Intelligence Organisation in 1994-95, argues in Inquirer on Saturday that Australia needs a new and resilient China strategy. Devising and pursuing it, he writes, will demand a “depth and seriousness of thinking not previously exhibited in our relations with China”. It would be hard to disagree with Dr Monk that the trade sanctions imposed on Australia by China are in “blatant violation of the World Trade Organisation principles to which China signed up 20 years ago and of the free-trade agreement we reached with it in 2015”. Beijing, he argues, is depriving its citizens of our high-quality commodities and even of electricity, “for no other reason than its anger that we put obstacles in the way of its infiltration of and interference in our institutions — and called for an independent inquiry into the origins in Wuhan, in late 2019, of the devastating 2020 pandemic”. Given China’s treatment of even mild critics domestically, its discomfort with Australia’s free press and open debate almost certainly is another factor.

Even before China began imposing bans on $20bn worth of Australian exports, this newspaper argued in favour of broadening our export markets to better embrace India, Indonesia, Britain and the EU. Australia, outgoing US ambassador Arthur Culvahouse acknowledges on Saturday, is “at the frontlines of the great strategic competition of our times”. In an interview with Ben Packham before he returns to the US, Mr Culvahouse, appointed by Donald Trump in 2018, put forward a pragmatic proposal that would enhance the security of democratic nations in the face of Chinese aggression. He called for the US, Australia and like-minded democracies such as other Five Eyes partners, as well as Japan and India, to join in a new “Manhattan Project” to develop trusted supply chains for economic and national security inputs that do not rely on China. Invoking the co-operation between the US, Britain and Canada that led to production of the world’s first nuclear weapons in World War II, he said the post-COVID era would require co-operation and a willingness to pay higher prices to guarantee supplies of key inputs such as critical minerals, pharmaceuticals and medical equipment. China had captured such supply chains because it was the lowest-cost producer. That became clear amid the international scramble for personal protective equipment early in the pandemic. A co-operative arrangement among like-minded democracies would open new opportunities for Australia. The deal by Australian rare earths miner Lynas with the US Department of Defence last year for a processing facility in Texas, for example, was the only source of separated heavy rare earths outside China, Mr Culvahouse said. More than 400kg of critical minerals are required to manufacture one F-35 stealth fighter jet.

Alliances are fundamental to our interests, Dr Monk also notes. From India to Japan, including Singapore, Vietnam, Indonesia, Taiwan and South Korea, Australia’s neighbours “do not wish to see a Beijing-dominated Indo-Pacific”. The Quadrilateral Security Dialogue between Australia, India, Japan and the US, he writes, has the economic, strategic and diplomatic weight to counterbalance China’s ambitions. He argues it is time to make it clear to Beijing that such balancing will now occur because its own behaviour has left members of the Quad no alternative. China is also busy making regional friends. Three million doses of its COVID-19 vaccine made by Sinovac Biotech have arrived in Indonesia, China’s People’s Daily boasted on Thursday.

Regardless of the imminent change of administration in Washington, imperatives regarding alliances and supply chains will remain. Incoming president Joe Biden had extensive experience with China when Barack Obama was developing his Pacific “pivot” in US foreign and defence policy and he appears disinclined to appease Chinese aggression. The advent of a new US president, however, may provide a window for the US and China to turn down the heat in the dominant superpower stakes. A change in the broader mood, however subtle or short-lived, also may create a window for Australia to initiate a thaw in our trading relationship with China. That also may be a vain hope. But we need to be adroit about seizing genuine opportunities without succumbing to Chinese pressure over issues such as China’s spurious list of 14 “grievances” with Australia, including the Huawei ban, foreign interference laws and the push for an inquiry into the origins of COVID-19. On Friday, the Prime Minister welcomed Chinese Foreign Minister Wang Yi’s indication that he wants relations back on track. It may be an olive branch; time will tell. As Mr Morrison says, the resumption of ministerial-level meetings is a first priority.