Australia-China relationship chills

Since the beginning of 2020, Australia's relationship with China has gone into free fall. Just in the past week, China has threatened to cut iron ore exports, something pundits said wouldn't happen because of China's need. Tasmanian Senator Jackie Lambie's recent call to boycott the 2022 Winter Olympics in Beijing will further antagonize China greatly.

Earlier Canberra's strong support for an international inquiry into the origin of COVID-19 in Wuhan earned strong criticism from Chinese diplomats and sharp condemnation from the Chinese media attack dog Global Times. Chinese police arrested a local Chinese news anchor Cheng Liu, an Australian citizen, for allegedly endangering China's national security, while two ABC journalists left China in a hurry after being visited by Chinese security officers late at night.

The deterioration of relations led to restrictions on Australian beef exports to China, high tariffs on barley and timber products and anti-dumping tariffs on Australian wines. Customs procedures have been tightened leading to the deaths of a shipment of live crayfish. About A$6 billion of Australia's A$150 billion exports to China appear to be affected.

Australia has earned additional criticism for Canberra's stance on the erosion of democracy in Hong Kong, its threats to cancel Victoria's BRI agreement, and a decision to sign a defense agreement with Japan. Political trust between the two nations is now at the lowest ebb it has been since the countries opened formal diplomatic relations in 1972. Direct contacts between Australian ministers and their Chinese counterparts have been suspended since January.

Australia's perception and management of the China has always been a difficult exercise. In 1989, after the Tiananmen incident, then-Prime Minister Bob Hawke allowed Chinese students studying in Australia to stay permanently without consideration of the implications. With growing influence of the Chinese in Australia's Chinese-language media, Australian universities and local government.

With high-ranking former politicians as consultants and lobbyists for China from both sides of the political spectrum, then-Prime Minister Malcolm Turnbull in 2017 declared Australia would stand up to China and began containing Beijing's influence. Then-China foreign ministry spokesman Geng Shuang said that the introduction of a foreign interference bill to the Australian Parliament "undermines the foundation of mutual trust and bilateral cooperation."

Australia has been long seen by China as existing in contradiction, long benefiting from trade with China, now its largest trading partner, yet at the same time perceiving China as a potential military and national security threat. It's not just Australia's close military ties with the United States – China's adversary in the Asia-Pacific region – that irks China. Australia often extolled the US alliance on numerous occasions, beginning early this century with former Prime Minister John Howard dubbed the United States' "deputy sheriff" in the region.

The Australian media of both sides of the political spectrum have been contributing to Chinaphobia with alarming stories of Chinese territorial ambitions. The media persecuted Liberal Party Federal MP Gladys Liu over purported links to the CCP. Tasmanian Senator Jackie Lambie's attacks on the government's dealings with China are given wide publicity. Regular cyber-attacks on Australian governments, various institutions, and big business have been painted as "warfare."

Every Australian prime minister since Robert Menzies (1949-1966) with the exception of Gough Whitlam (1972-1975), has been a staunch supporter of the US alliance. China foreign policy is formulated within the China section of the Department of Prime Minister and Cabinet (PM&C). Although outside organizations like the Australian National University and Australian Strategic Policy Institute advise the PM&C, the Australian Security Intelligence Service (ASIS) has been a prime influence on the formation of China policy.

Australia's China policy has been formulated by alarmist bureaucrats with a very strong Anglophile orientation, still living in the memory of the Cold War. Although trade between Australia and China has grown exponentially over the past two decades, this hasn't been factored into the policy framework enough. Australia publicly espoused opportunity over the China relationship, which has created economic prosperity.

Consequently Australian policy makers have locked Australia into an unproductive relationship, due to the perception of threat and competition with China. Consequently, the outcome over the last three years has been one of containment.

Prime Minister Morrison admits that the management of the China relationship has been difficult. Canberra is watching the difficulties other 'Five Eye' nations Canada, New Zealand, United Kingdom, and the United States are currently having with China, reinforcing the perception that China is a threat. Partially, the mandarins' long-held, deep assumption has become a self-fulfilling prophecy. One Chinese diplomat recently said that "if you make China the enemy, China will be the enemy."

Australia has failed to heed the success of some of its ASEAN neighbors, failing to recognize their ascendancy and growing diplomatic aptitude, and missing valuable lessons. Malaysia, with disputed territories and frequent maritime confrontations, even managed to renegotiate a number of BRI deals and carry Chinese respect. Indonesia also has territorial issues with China but understood the art of focusing on outcomes rather than letting unbeneficial rhetoric fly over differences.

Singapore has a close relationship with China, due to the assistance Singapore gave to China on development over the past 40 years. China has said little about Singapore troops stationed in Taiwan for training, or jet fighter squadrons based within the United States.

Staunch anti-communist Thailand is working on a number of strategically important projects to both countries, particularly the opening of a new gateway from Yunnan Province into Southeast Asia. The common thread here is all these countries have independent foreign policies, and work bilaterally and multilaterally for each countries' benefit.

This is what China has wanted – respect, mutually beneficial bilateral and multilateral cooperation, and diplomatic support. China's contentious borders since 1949 have been primarily solved politically. Australia has prospered under the China relationship with massive growth in trade. Australia's position as a middle economic power has been mostly dependent on its exports to China.

China sees Australia as ungrateful, leading to a supposedly leaked document from the Chinese Embassy in Canberra recently which claims that:

1. Australia id blocking more than 10 potential Chinese investments on opaque national security concerns,
2. Huawei Technologies and ZTE are banned from the 5G network, over national security concerns,
3. Foreign interference legislation is being enacted which is viewed as targeting China's BRI agreement with Victoria,
4. Australia-China cultural, education, and economic exchanges are being politicized, and visas are being revoked for Chinese scholars,
5. Australia has called for an international independent inquiry into the origins of COVID-19,
6. Australia has interfered in in internal Chinese matters such as Xinjiang, Hong Kong, and Taiwan, and spearheaded a crusade against China in multilateral forums,
7. Australia has made hostile statements about the South China Sea to the United Nations,
8. Australia has sided with the US anti-China campaign, spreading disinformation about China's efforts in containing COVID-19,
9. Australia has funded an anti-China think-tank spreading untrue facts about Xinjiang and manipulated public opinion against China. Chinese journalists' homes and properties have been raided without laying charges or giving explanations,
10. China is accused of conducting cyber-attacks against Australia without any evidence,
11. Australian MPs have made racist attacks against Chinese and Asian people, and
12. The Australian media has made unfriendly and antagonistic reports about China

The relationship is set to get worse. Australia is paying a price for being too pro-US in its narratives, a perception that China is a threat to be contained. Global Times' comment on Morrison's statement that "we will always be Australia: we will set our own laws and rules according to our national interests" is a claim that Australia is just a vassal state of the United States.

An independent foreign policy is one of the most important prerequisites to a healthy Australia-Chinese relationship. Treasurer Josh Frydenberg based next year's economic growth in Australia on a strong China recovery, with the IMF estimating the Chinese economy will grow 8.2 percent in 2021. This must be factored into defense and foreign policy.

Australia must come to terms of the loss of its status as a middle-sized defense power and rely much more on the region for future defense. Australian international commentary must take this into account. There is no point in aggressively calling for an independent inquiry into COVID-19 source within China when there will be one anyway.

The Canberra mandarins must see China as an opportunity rather than a threat and realign the narratives. China needs to be re-understood by policymakers. It is time for Australia to reassess where mutual benefit exists, enhance cooperative research, and work earnestly on multilateral issues where there is mutual benefit.