Alexander Downer cautions business on China

Alexander Downer has warned business leaders that they risk alienating the public, their customers and their staff if they side with China against the Morrison government.

Former foreign minister Alexander Downer. Picture: AAP

Alexander Downer has warned business leaders that they risk alienating the public, their customers and their staff if they side with China against the Morrison government to “push up their share prices”.

The nation’s longest-serving foreign minister said Australia’s relationship with China was ­“extremely bad”, but businesses needed to “play the long game” rather than undermining Australia’s national response.

In a podcast with Asialink at the University of Melbourne, Mr Downer said China had behaved in a “childish” manner in circulating its list of 14 grievances with Australia, abandoning its “great traditions of diplomacy”.

He urged Australian CEOs to remain “quietly patriotic”, as Japanese companies did during decade-long tensions between the neighbouring countries that finally eased in 2006.

“The Australian business community needs to be careful too because they don’t want to alienate the Australian population,” Mr Downer said.

“They don’t want to alienate their own workers by sticking up for China just for pecuniary interests, so they can push up their share prices. Seriously, they have to think this through. And that’s what the Japanese business community did. It thought it through.”

Australian businesses have become increasingly agitated over the state of the Australia-China relationship, amid a barrage of targeted trade sanctions at Australian exports.

Former Business Council of Australia president Graham Bradley said last month that he didn’t know “any business leader who thinks the Australian government has handled the China relationship well”.

Mr Downer said such “tut ­tutting” by business leaders was unhelpful. “Little do they realise that that is extremely damaging to their own interests because in the end that will make it harder for this wave to break,” he said.

He said Australia couldn’t stay quiet on issues such as the security crackdown in Hong Kong simply to maintain good trading relations with Beijing.

“Money isn’t everything. Making the rules-based international system work, making sure that there is an appropriate balance of power in the Indo-Pacific region … making sure that Australia maintains its networks around the world with countries which are its natural friends and allies — all these things are more important than just money.”

Mr Downer warned the one-side trade war could get worse, as China tried to reduce its reliance on Australia as much as possible.

The lesson for Australia was to diversify its trading relationships to avoid being “vulnerable to the vagaries of what might happen in Chinese politics”.

He said business leaders could help by maintaining their personal links with Chinese counterparts as best they could.

Back channel “Track Two” diplomacy, which can involve business figures, academics and retired government figures, was “much more important than governments often realise”, Mr Downer said, adding: “I made ­extensive use of those sorts of lines of communication.”