Reported the Sydney Morning Herald, “The list of grievances also includes: government funding for ‘anti‐China’ research at the Australian Strategic Policy Institute, raids on Chinese journalists and academic visa cancellations, ‘spearheading a crusade’ in multilateral forums on China’s affairs in Taiwan, Hong Kong and Xinjiang, calling for an independent investigation into the origins of COVID-19, banning Huawei from the 5G network in 2018 and blocking 10 Chinese foreign investment deals across infrastructure, agriculture and animal husbandry sectors.”
An anonymous Chinese official explained that it “would be conducive to a better atmosphere” if Canberra changed course. That is, abject submission highlighted by a mix of cowering and groveling would help improve relations. The Chinese representative added ominously: “China is angry. If you make China the enemy, China will be the enemy.”
During the Cold War, U.S. operatives gained a reputation as “the ugly American,” officious, arrogant, obnoxious. Now we see “the ugly Chinese” at work, doing everything possible to make others hate them and their government. Beijing is doing a better job making the case for Australia’s alliance with America than could Washington.
The Morrison government has stood fast. Trade Minister Simon Birmingham said, “The ball is very much in China’s court to be willing to sit down and have the proper dialogue.” Treasurer Josh Frydenberg indicated Canberra’s willingness to conduct a “respectful and beneficial” discussion but insisted that his nation’s interests were “non‐negotiable.”
The redoubtable Aussies are capable of making their own way in an unfriendly world, but an enraged PRC remains a daunting foe. Indeed, Canberra is not Beijing’s only target. After South Korea decided to participate in America’s THAAD missile defense system four years ago, the PRC retaliated economically, including with consumer boycotts and tourist restrictions. Such attempts to threaten and intimidate smaller states one by one demonstrates the need for democratic solidarity. Australia deserves support. But what kind?
The place to start would be citizen solidarity. Australian wine tasted good before China start firing its big economic guns Down Under. It is even more appealing today, with Canberra under economic siege and confronting a Sino challenge similar to that facing Washington. American individuals and companies should take an extra look at Australian products now barred from or limited in the PRC market. Aussie exporters already benefit from a bilateral free trade agreement, but Washington should minimize any remaining barriers on targeted Australian goods.
Moreover, American (and other Western) consumers and businesses should look to increase purchases of other traditional Aussie exports to the U.S.—most importantly, meat, dairy, nuts, aluminum, and optical and medical instruments. When COVID-19 fears finally subside, Australia would also be a fine tourist destination (I speak from experience, having visited a half dozen times over the years!). The purpose in doing so would be as much to show support as repair economic damage.
Although private action would be helpful, more is needed. For instance, some analysts proposed that the U.S. indemnify Canberra and other friendly states under economic attack. However, Washington, which ran a $3.1 trillion deficit last year and might end up facing a similar amount of red ink this year, cannot act like an ATM machine for the world. Moreover, a general subsidy would encourage other states to repackage preexisting disputes to trigger America’s new geopolitical “insurance policy.”
An alternative, advocated by some, would be for Washington policymakers to levy economic war on other nations’ behalf, imposing countervailing tariffs and more on the PRC. But the U.S. already overuses and misuses its economic clout to do what China is doing, penalize other nations that refuse to submit to Washington’s inconsistent, wide‐ranging, and ever‐changing dictates. Sanctions are an effective policy tool only if they do not threaten core interests of the target state and there is a diplomatic off‐ramp. Moreover, intensifying America’s ongoing confrontation with the PRC would further poison the overall relationship and put friendly states at even greater risk.
Writer Tanner Greer contended that Beijing’s “attempt to undermine the American alliance system demands a firm response from Biden as soon as he comes to power.” However, with that alliance system the U.S. already does more than its part, defending at great expense much of the known world, including a couple score of prosperous and populous states that could do much more to protect themselves, including Australia. None of them reciprocates by contributing to America’s defense, unless agreeing to let American taxpayers underwrite their security is viewed as a “contribution.” Australia is more serious about its military than many other U.S. partners, but still benefits greatly from America’s propensity to insist that other states allow it to defend them.
Better for Washington to engage allies and friends in Asia and Europe to discuss how to collectively deal with China’s threatening behavior. After spending three years bestowing air kisses on Xi Jinping, along with compliments for his response to COVID-19, President Donald Trump announced he was the PRC’s greatest critic. He demanded that allies join his newly launched Sinophobic campaign even though previously he had waged economic war against those same allied states—Canada, South Korea, and the Europeans, most notably—while attempting to win a trade war against China. It was a foolish, myopic, and incompetent effort. Additional evidence that the administration botched this issue came last week, with the announcement that Europe had negotiated a new market‐opening agreement with Beijing. Imagine if the Americans and Europeans had joined in 2017 to present a combined list of issues requiring resolution to the PRC.
However, the Biden administration offers a new start. An important objective should be to begin serious discussions over how to deal with Beijing’s attempts at economic coercion. Among possible steps would be creating a multilateral fund to support countries and industries under attack; opening markets for products banned or limited by the PRC; limiting or prohibiting Chinese sales to governments (China gained about $2.5 billion in procurement contracts from the European Union this year); and retaliating more broadly, including general trade penalties along with narrow restrictions on particular industries and services.