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Australia has sound reasons to support the US against authoritarian China

By Chris Lewis - posted Friday, 12 July 2019


Australia, and other wealthier allied nations, may also have to provide greater economic resources to resist the lure of China. For example, Sri Lanka’s President Maithripala Sirisena recently rejected a proposed military deal that would allow US troops free access to the island’s ports against his pro-Western Prime Minister Ranil Wickremesinghe at a time when China vowed to keep providing financial help despite warnings about the island nation’s mounting debt.

Similarly, with China being Cambodia’s largest aid donor, investor and creditor, and already suffering from Chinese “debt trap diplomacy” of “exorbitant interest rates, predatory loan practices and opaque contracts”, it is argued that Cambodia has become a “haven” for companies eager to circumvent US trade sanctions as it has no choice but to comply with China’s demands (‘Country a ‘loan shark victim’, The Australian, 5 Jul 2019, p. 11).

Within a political environment when the US is more willing to take action to uphold its national economic interests, with President Trump often taunting allies such as the EU, Japan and India when  industry difficulties emerge (‘Trump blasts US-Japan alliance’, Australian Financial Review, 28 Jun 2019, p. 31), Australia must promote the importance of the WTO.

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As American analysis suggests, the US can work with its allies (including Australia) to confront China. With an observation that China currently gets around US tariffs by selling products in other markets, with a recent study noting that China has actually reduced its tariffs on non-US goods since the trade war began by an average 14 per cent, it is argued that the US should strengthen the WTO by bringing cases against China which will should now be treated as a market economy. This approach would limit the ability of other countries to respond to Beijing’s dumping of goods at below-market prices.

But Australians should prepare for difficult economic times ahead, although the opportunity for Australia’s basic mineral and agricultural exports may find other destinations in coming years if China ever seeks to retaliate in economic terms.

I for one, would accept a lower standard of living which may result from less exports and less reliance upon China rather than see such an authoritarian nation have greater influence at the international level.

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About the Author

Chris Lewis has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

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