An insight into Sino-Aussie relationship | By Syed Qamar Afzal Rizvi

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An insight into Sino-Aussie relationship


CURRENTLY, a trade war is brewing between Beijing and Canberra over the economic parameters that the newly established Morrison government in Australia is trying to impose on Beijing.

Whilst the past economic relations between China and Australia have increased significantly to the benefit of both nations, the current spat between Canberra and Beijing has sprouted a new wave of confrontation as China’s top diplomat in Canberra blamed Australia for deteriorating ties between the nations, accusing it of economic coercion and “provocations” in a wide-ranging speech that painted Beijing as a victim.

Citing Australia’s decision last week to cancel agreements between Beijing’s flagship Belt and Road Initiative and Victoria State among litanies of “negative moves,” Ambassador Cheng Jingye said the country’s perception of China as a “threat and challenge” had hurt relations.

China’s emergence as a major economic power is of key strategic significance for Australia because it guarantees a material basis for greater Chinese prominence in regional and global affairs.

In March, China also placed anti-dumping duties of between 116.2 per cent and 218.4 per cent on Australian wines in containers of two litres or less after concluding its anti-dumping investigations.

China imposed an 80.5 per cent tariff on Australia’s barley exports in May last year following the conclusion of an 18-month investigation.

Australia filed a complaint with the World Trade Organization (WTO) in November, but China rejected the request to form a panel on Wednesday – a move that will only delay the process.

The Morrison government’s decision to scrap Victoria’s Belt and Road Initiative (BRI) agreement with China was based on Australia’s new Foreign Relations Act, which says the Foreign Minister may ensure that arrangements entered by state or territory governments, and associated entities, are not negotiated, entered or continue in operation where they adversely affect Australia’s foreign relations or are inconsistent with Australia’s foreign policy.

Conversely, Prime Minister Scott Morrison himself also stated in an interview with a Chinese magazine in November 2018 that Australia welcomes the contribution the Belt and Road Initiative can make in meeting the infrastructure needs of the region, and we’re keen to strengthen engagement with China in regional trade and infrastructure developments that align within the international standards of governance and transparency.

Given the key role of the US alliance in Australia’s foreign policy, China often interprets Australian actions in the context of US policy objectives.

Australia is appreciated for the occasions in the recent and more distant past when it has acted independently of the US, but China remains very sensitive to perceived changes in Australia’s policies which suggest a return to policies of the past.

Along with managing a growing Australia-China bilateral relationship, a key challenge for Australian policymakers will be to balance the demands of the Chinese connection while maintaining close ties with the US.

The ambiguous status of the US and Australian relationship with Taiwan will be a continuing issue and the reunification of Hong Kong with China in July 1997 has potential for political and economic problems.

The Gillard government’s action to station US troops in Australia has been strongly criticised and viewed with suspicion by China as it asserted that the defence pact could undermine regional security.

In April 2013, Gillard went to China and met with the new Chinese President Xi Jinping with Foreign Minister Bob Carr and Trade Minister Craig Emerson to secure closer ties with China and economic relations.

Defence Minister Senator David Johnston has expressed his belief that Australia does not need to “choose between the US and China.”

Speaking on behalf of the coalition government, he further stated, “we see that there is a balance between our relationship with China and sustaining our strong alliance with the United States.”

On 17 November 2014, Australia and China finalised a deal which saw a Free Trade Agreement established between the two nations.

Xi Jinping addressed a joint-sitting of the Upper and Lower Houses of Australian Parliament in November 2014, lauding Australia’s ‘innovation and global influence.

Australia has been among the firmest opponents of China’s territorial claims to the South China Sea.

In July 2016, following the ruling by an international tribunal which held that China holds “no historical rights” to the South China Sea based on the “nine-dash line” map, Australia issued a joint statement with Japan and the United States calling for China to abide by the ruling, as “final and legally binding on both parties.” In response, Chinese state-run media called Australia a paper cat.

Later in the year, in response to an Australian swimmer’s critical comments towards Chinese swimmer Sun Yang over a past doping experiencee, state media labelled Australia “Britain’s offshore prison… on the fringes of civilization.”

Australia is party to two trade agreements with China: the China-Australia Free Trade Agreement and the Regional Comprehensive Economic Partnership. If these do not protect Australia from trade coercion, the message is that such agreements mean little.

In June 2017 after a Four Corners investigation into supposed Chinese attempts to influence Australian politicians and exert pressure on international students studying in Australia, Turnbull ordered a major inquiry into espionage and foreign interference laws.

It also claimed that despite Australian Security Intelligence Organisation warning both parties about Chinese interference in democratic processes, significant financial contributions continued to be accepted.

In 2018, in the Lowy Institute poll there had a sharp rise in the proportion of the Australian population who say the Australian government is “allowing too much investment from China”.

However, some analysts argue as China’s influence and economic strength grow, it is unlikely to give middle powers like Australia more latitude to manage their relations with both Beijing and Washington.

Australia has become much more “sensitive” to its trading links with China – that is, the changing value of its trade with China as a share of its own nominal GDP.

Add to this its shrinking “relative economic power”, and it is clear that Australia is in a particularly precarious position when it comes to trade with China.

—The writer, an independent ‘IR’ researcher-cum-international law analyst based in Pakistan, is member of European Consortium for Political Research Standing Group on IR, Critical Peace & Conflict Studies, also a member of Washington Foreign Law Society and European Society of International Law.