‘No quick fix as Beijing gets tough’, says Warwick Smith

Former Australia-China Business Council head Warwick Smith has warned Beijing has shifted from ‘assertive to aggression’.

Former Australia-China Business Council head Warwick Smith. Picture: Britta Campion

Former Australia-China Business Council head Warwick Smith has warned Beijing has shifted from “assertive to aggression”, with Australia caught like a “little boat between two big rocks” as the US and China battle for ­regional supremacy.

Mr Smith, a former Howard government minister and adviser to Kerry Stokes, said the push to diversify trade markets would not happen “overnight” as China continues its pressure campaign, led by threats against Australian exporters. “Diversity doesn’t come quickly. It takes a long ­period of time. You can’t just switch one market off and then go to another. So, having a correct narrative from government is very important,” Mr Smith said.

“You can’t immediately diversify all your trade overnight. You cannot. This requires realism and it needs to be more deeply understood in Canberra.”

Speaking on a webcast hosted by the Minerals Council of Australia on trade, investment and the US-China relationship, the prominent businessman said it was “China that has changed, not Australia”, as Xi Jinping strengthens the communist nation’s global assertiveness.

“We’re like a little boat ­between two big rocks. We can’t afford to land on either one of them badly,” he said.

Former ASIO director-general Dennis Richardson, who previously led the Defence and Foreign Affairs and Trade departments, said Australia must be prepared to remain “in the doghouse for a good two to three years”.

“The notion that the Prime Minister could stand up tomorrow and give a glowing speech and everything returns to quite normal I think is a bit far-fetched. That can’t happen and won’t happen,” he said.

Speaking on the MCA webcast, Mr Richardson said relations with China had been “too caught up with domestic politics in Australia, both inside the Labor Party and inside the Liberal Party”.

The former Australian ­ambassador to the US said the business community must be “prepared to speak out a bit more than what it is”.

“I get the impression that elements of the business community have become intimidated by a concern that if they do speak out they’re going to be dismissed as simply talking about their profits,” he said.

Mr Smith, who has been travelling to China for more than 30 years and leads the Business Council of Australia international engagement committee, said Australia should not be offensive to the Chinese diaspora, with more than 1.5 million Mandarin speakers in the country.

“They are key electors in many key electorates of this country. So we don’t need to be offensive. But what we have to do is work out how we deal with the new China.”

Speaking in parliament on ­national security challenges in the Indo-Pacific region, Home Affairs Minister Peter Dutton said Australia would “never compromise on our values, and our partners know that”. “We know that the Indo-Pacific is in the midst of the most consequential, strategic realignment since World War Two and Australia stands very firmly with our partners,” he said. “We want to make sure that we have a free, open and prosperous Indo-Pacific.”