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Commentary
Australia cannot win its trade war with China. The only question is how much it will lose and what could that mean for New Zealand.
In case anyone in New Zealand missed it, Australia is now under sustained attack from China.
That attack takes two forms: trade sanctions and rhetorical threats.
Trade sanctions began in May when China accused Australia of dumping barley on the Chinese market and imposed an 80 percent tariff. Since then, China, citing various problems, has restricted Australia’s imports of beef, lobster and timber. There have also been reports from Chinese customs officials telling importers not to buy Australian sugar and copper.
More than 80 ships carrying more than $ 1 billion worth of Australian coal lie off Chinese ports, sustained by alleged concerns over “environmental regulations.” In the latest development, China claims that Australia has been ditching wine and is imposing tariffs of 107 to 200 percent on Australian wine imports. That will effectively close a $ 1.2 billion market for Australian winemakers.
One sanction is chance, two is coincidence, three is an orchestrated campaign.
China, at least, has claimed that there is a legitimate basis for its various trade sanctions. There has been no such pretense with the threats. They have been open and unambiguous.
In April, the editor of the Global times, the Chinese government’s English language forum, said: “Australia is always there, creating problems. It’s like gum stuck to the sole of Chinese shoes. Sometimes you have to find a stone to rub. “An editorial in the Global times in June he warned that “Australia will pay an unbearable price” if it adjusts too much to US foreign policy.
Last month, a Chinese government official said in a briefing with an Australian reporter: “China is angry. If you make China the enemy, China will be the enemy. “
Australia is being used as an example to show other countries that there is a high price to pay for disrespecting China.
This week, China’s foreign affairs spokesman Zhao Lijian shared a tweet showing a false image of an Australian soldier slitting the throat of an Afghan child. Australian Prime Minister Scott Morrison asked China to apologize. On Tuesday, China responded through a derogatory editorial in the Global times titled “China’s goodwill in vain with wicked Australia.”
How did this come about?
Relationships have been slipping for several years. In 2018 Australia passed legislation aimed at preventing foreign interference in the country’s internal affairs. This was interpreted by many as directed at China. The same year, Australia banned the Chinese company Huawei from participating in its 5G market. There have been incidents related to raids on Chinese journalists in Australia and the blocking of Chinese investments.
Along with many other countries, Australia has also openly criticized China’s treatment of Uighurs in Xinjiang, its suppression of democracy in Hong Kong, and its military activities in the South China Sea.
The turning point came in April, when the Australian prime minister took the international initiative by calling for a comprehensive investigation into the source of the coronavirus. He even proposed the use of independent investigators with powers similar to those of the “weapons inspectors.” This outraged China. From a diplomatic perspective at least, it was a catastrophic mistake on Morrison’s part. Since then, the deterioration of the relationship between China and Australia has been rapid.
What can Australia do now? Not much.
Without strong alliances, the moral ground can be a lonely and dangerous place.
In the 2019-2020 period, 39 percent of Australia’s exported goods (over $ 150 billion) went to China, but only 1.9 percent of China’s goods made it to Australia. About 12 percent of tourists to Australia come from China, but Australians make up only 1 percent of tourists from China. In 2019, there were 260,000 Chinese students enrolled in Australia; only a handful of students went the other direction.
This is a trade war that Australia cannot win. The only question is how much will you lose.
Of course, the purpose of China’s attack is not just to send a message to Australia. There are two other audiences planned: the Chinese people and other governments around the world.
China is the looming superpower. He sees himself exercising his natural role as the ‘Middle Kingdom’. This is just the latest stage in a long restoration that followed the Century of Humiliation from the mid-19th century to the mid-20th century, when China was subjugated by Western powers and Japan.
This restoration is vital for the Chinese Communist Party to maintain control. For many years, political scientists have predicted that as the Chinese people get richer, the CCP will fight to suppress the demand for democracy. The CCP has been successful to date in generating a dramatic increase in living standards. As the rate of increase inevitably slows, the CCP is using nationalism to maintain unity and dominate political discontent. Retaliation against Australia must be seen in that broader context.
By punishing Australia, China is also warning other governments around the world not to meddle in its affairs; do not challenge their sovereignty. Australia is being used as an example to show other countries that there is a high price to pay for disrespecting China.
This is ‘realpolitik’ in action. As the Greek historian Thucydides explained more than two thousand years ago, “the strong do what they can, the weak suffer what they must.”
What does all this mean for New Zealand?
It would be surprising if some kiwi opportunists weren’t salivating at the prospect of an economic uptick for New Zealand on Australia’s disgrace. Indeed, in the short term, New Zealand could see increased demand for many of its products, particularly wood, wool, beef, and wine. There could also be a significant boost for the education and tourism sectors.
But here’s a warning for the land of the long white cloud. China is New Zealand’s largest trading partner, importing more than NZ $ 20 billion worth of kiwi products and services in 2019. As Australia is learning, that level of confidence carries substantial risk.
If there is ever a dispute between Middle-earth and the Middle Kingdom, there will only be one winner.
New Zealand tasted China’s discontent recently when a senior spokesman warned members of the Five Eyes intelligence association (of which NZ is a member) that “if you dare damage China’s sovereignty, security and development interests , they must be careful with their pricked and blinded eyes ”.
Beijing’s growing “wolf warrior diplomacy” means the potential for disputes is increasing. As China becomes more assertive on the world stage, it may be less tolerant of any perceived disrespect from its trading “partners.” You can exert more pressure to avoid criticism or interference in your actions at home and abroad. What will New Zealand do when faced with a serious conflict between its liberal democratic values and its economic interests?
Much of China’s antipathy towards Australia stems from the close ties (military, economic and cultural) between Australia and the United States. However, that relationship also brings significant comfort to Australia. Unsurprisingly, recent events indicate that Australia is finding it increasingly difficult to maintain a happy balance between its biggest trading partner and its biggest ally.
That raises an important question for New Zealand. As a new Cold War erupts between China and the United States, what does the future hold for the relationship between New Zealand and the United States?
Without strong alliances, the moral ground can be a lonely and dangerous place.
