It is hardly controversial to say that Australia’s relationship with Beijing is well and truly in the gutter – rapidly mounting tensions, economic coercion and rhetoric are all undermining the relationship. As Beijing ramps up its designs for regional dominance, the question for Australia becomes should we apologise or acquiesce to the demands? Or, should Australia plan for the disruption accordingly?
For many Australians the nature of the global geo-strategic, political and economic environment in the aftermath of COVID hasn't quite hit home. Protected by a robust government response and the nation's geographic isolation, Australia truly is the 'Lucky Country'.
In many ways, much of the Australian public could be forgiven for thinking much of life was 'business as usual', despite inter-state border lockdowns and mask mandates, very little about Australians' daily lives remains disrupted when compared with the populations of North America, Europe and parts of Asia.
However, as certain as gravity, the global geo-political, economic and strategic environment is in a state of flux and disruption.
Australia's primary security partner, the United States, embroiled in bitter domestic troubles, economic calamity in the face of COVID and the aftermath of what many would call the 'Trump anomaly' is challenged for legitimacy by an increasingly assertive and powerful rising power in the People's Republic of China.
To this point, if asked, much of the Australian population would appear divorced from the broader evolution and deterioration of the global and regional economic, political and strategic order their lives are built upon, while that is changing with each passing day much of Australian society still has little understanding of the dynamics and its implications for the nation's future.
At a national level many from across the Australian political, academic and media divide have sought to reinforce a concept of choice, that is Australia must choose between its long standing strategic partnership with the US and its robust, albeit strained economic relationship with China.
While some have sought to negate this 'illusion of choice', with soothing language around balancing the relationships, others including former prime minister Paul Keating and acclaimed Australian strategist Hugh White have prompted an increasing 'accommodation' and 'acceptance' of China's economic, political and strategic ambitions in the Indo-Pacific.
Others have called for more nuance in the ongoing war of words between the two nations and a greater need to reset the dialogue and understand one another and work together to defuse tensions and resume 'normal' economic relations.
Prime Minister Scott Morrison has sought to chart a middle path, navigating the challenges of an increasingly bombastic and assertive Beijing, with the shared interests of democracy, shared economic growth and prosperity and a 'free and open Indo-Pacific' Australia enjoys with the US.
Recognising this, The Sydney Morning Herald's political and international editor, Peter Hartcher, has penned a thought provoking piece titled, 'Apologising for China's delinquency? We'll be sorry', in which he details a growing recognition that any formal apology on behalf of Australia would be tantamount to appeasement and would only serve to embolden an already enraged Beijing.
Hartcher states, "For decades, we’ve been making excuses for China. Often they’re pre-emptive – we excuse Beijing’s bad behaviour even before it’s actually done something. Does this make us enablers or just apologists?
"A long-standing excuse was that China was going to need more 'strategic space' as it grew richer and more powerful. This was an argument whose most prominent advocates in Australia were Paul Keating and Hugh White. The concept seemed to make sense. They argued that a rising China would want more power and should be allowed it. To accommodate this, the US needed to back off in the Pacific and create more 'strategic space' in which China’s armed forces could operate more freely.
"The historical and moral rationale was that the US itself had demanded more 'strategic space' as it grew powerful. President James Monroe had declared the Americas to be a US sphere of influence, off limits to the great powers of Europe, in 1823, for instance, with the Monroe Doctrine."
Australia has tricked itself into constant apologies
Building on these points, Hartcher details how the global acceptance of Beijing's regional ambitions has directly impacted Australia's consistent approach towards the rising power, an approach that has frequently devolved into apologetic accommodation, provided its ambitions don't directly infringe on Australia's sovereign interests.
"Under Xi Jinping, China is using its armed forces increasingly to intimidate Japan, India and Indonesia among others, while breaking its solemn commitment to Hong Kong’s autonomy and increasing its military pressure on Taiwan. The argument to allow it more 'strategic space' was a pre-emptive excuse not for some elegant academic argument on the rise and fall of great powers but an invitation to a rogue power to smash its way to dominance," Hartcher explains.
"And it’s not about the moral equivalence of China with the rise of the US a century or two ago. It’s about the absolutes of security today. Beijing is injuring its neighbours, destabilising the region, and ignoring the rules that middle powers like Australia rely on for national security and sovereign survival."
These points have led to Australian policy making up until the least 18 months hinging upon one central pillar, being, as Hartcher puts it, "we must not make China angry", a cause seemingly championed by the likes of Keating and White who have linked any active challenging of Beijing's territorial ambitions, bully-boy tactics and economic coercion as unfair characterisation of the People's Republic of China.
While this is starting to shift, particularly as the mask of Xi's China slips and its designs for regional and global dominance become apparent, as too are its crimes against humanity, particularly against ethnic and religious minorities domestically, much of Australia's internal dialogue and policy making decisions are still formed with 'the abusers' best interests at heart, disproportionately assigning blame to ourselves and others who would seek to assert their sovereignty and legitimately question the horrors of ethnic cleansing and the like.
Hartcher explains, "We put ourselves in a constant state of anticipation. Reporters and editors closely watched Australia’s government for anything that might 'make China angry'. It became the main frame through which Australia absorbed news about the bilateral relationship.
"Altogether, Australian newspaper reports on relations between Australia and China have featured the word 'angry' on 1,057 occasions over the five years from 2015 to 2020, according to a search of the Factiva database. That’s an average of 211 per year. Or one report of China’s 'anger' at Australia every 1.7 days. These reports usually are interpretations of remarks in the Chinese Communist Party’s media or by Chinese officials.
"This is unique among Australia’s international relationships. No other country’s dealings with Australia are assessed consistently through the prism of anger, anticipated or actual. Australians are not told that they should live in fear of any other nation. So, naturally, when China takes action against Australia it seems justified by its anger. Inevitable, almost. Implicit is that Australia has acted wrongly, aggressively or provocatively. It has earned this anger; we are somehow responsible."
In many ways this creates a self-fulfilling prophecy, one in which Australian policy makers, political leaders and media personalities have helped shaped the public understanding and internal dialogue as one where Australia is the perpetrator and China, the victim.
For Hartcher, this predicament has not developed in isolation, this has in some ways been conditioned by China, where he explains, "This successful Chinese conditioning of the Australian mind over the decades had made us more receptive to the sort of self-abasement we are urged to perform to assuage China’s 'anger'. This week, for instance, we hear a former secretary of the Department of Foreign Affairs and Trade, Philip Flood, telling us that the 'current low point' in relations is caused by both countries and that Australia needs to approach China with 'more nuance'.
"What sort of nuance would Flood suggest we use against a fascist power that is crushing human liberty at home – including a program of genocide in Xinjiang – and using brute force to make illegal territorial grabs abroad?"
We can't ignore the dramatic shift in Chinese policy
COVID-19 and the ensuing economic, political and strategic turmoil has also paved the way for the world to recognise the easily bruised ego of China's President Xi Jinping as nations, including Australia, place pressure on the Chinese government for an inquiry into the origins of the pandemic.
This push, spearheaded by Prime Minister Scott Morrison, has seen Beijing take direct aim at Australian exports, something Shoebridge believes needs to be taken into account by Australian policymakers as the nation seeks to recover from the economic impacts of the pandemic: "Why is the China market boom ending? Because China has changed under Xi Jinping, and Xi has changed the terms under which companies and countries can access the China market.
"He’s also changed the terms on which Chinese businesses can run their companies and access things like stock markets, as Alibaba owner Jack Ma has discovered as he’s tried to float Ant Group on the Shanghai and Hong Kong exchanges. International banks are discovering this in Hong Kong as the national security law affects far more than ‘the few’ Carrie Lam promised.
"Chinese policymakers talk about ‘reform and opening up’ and making China a better, more predictable place for foreign trade, investors and companies. But the government’s relentless drive to exert greater control over trade and economic partnerships and to intervene in unexpected ways is sending the opposite message — and not just to Australia.
"China’s market is becoming more closed, more difficult and more unpredictable, not more open and reciprocal. And, for companies operating from jurisdictions whose governments are not on board with the policy directions and strategic imperatives of Xi’s government, market access is being used as a weapon.
"It’s a weapon designed to punish such governments, like Australia’s, to pressure them through domestic business lobbies that simply want sales to continue, and to intimidate other governments that might be contemplating similar policies."
What this recognition does establish is the need for a strategic rethink about the nation's economic relationships, particularly the growing need for market diversification and the introduction and expansion of a national industry policy and supporting framework to support the government's $1.5 billion Modern Manufacturing Initiative (MMI).
Economic resilience as strategic deterrence
The last time Australia’s public policy community was called upon to respond to such a predicament was the combined challenges of the Great Depression and the Second World War, both of which had a dramatic impact on the national psyche and the post-war period of rebuilding and expansion.
This model is perfectly summarised by Ricky French in a piece for the Weekend Australian, titled 'After catastrophe, opportunity knocks', stating: “We’ve seen it time and time again.
"After bust comes boom. Major disruptions and economic calamities have historically opened the doors for positive change and left lasting imprints on our built landscapes.
"Against the backdrop of COVID-19, we’re seeing it again, with the rediscovery of the local neighbourhood counterpointing the tragedies of unemployment and its associated issues. We’ve started once again looking for a legacy, wondering how our country might visibly change for the better, seeking out that light in the gloom."
Indeed, in looking for the “legacy” as French states, the Australian public are seeking to reignite not only Australia’s sense of identity, but equally reignite Australia’s potential and indeed the promise our still young nation has to offer both to the citizens and the world, particularly as we will be increasingly required to provide for our own prosperity, stability and security in an era of great power competition.
Recognising this, French poses an important question for consideration: “So, where to now? Our borders are shut, there will be no influx of migration to fulfil grand infrastructure schemes, or create demand for them.
"As we step into our first recession in almost 30 years, what lessons from the past can we learn? Will any shining landmarks stand out when we look back on this time 30 years from now?"
Well, that is an important question to ask, and it is critical to identify that Australia’s state, territory and Commonwealth governments have made small strides to shore up industries across the economy. The approach is unfortunately fragmented and fails to be guided by a broader strategy and indeed vision for the nation at a time when both the public and the world are calling for Australia’s level-headed approach to life.
However, the simple reality is we can’t offer the world our best if we’re not at our best.
Addressing this requires a considered, targeted and integrated approach to develop not only economic resilience, but equally, economic competitiveness, industry diversity and, above all, trade diversity in an increasingly competitive and contested global environment.
For ASPI professional Michael Shoebridge, embracing the possibilities is a policy no brainer: "The direction we need to take is pretty clear, even if it’s not easy. We need to make the China market matter less to us, just as it did for the sectors mentioned above only six years ago. Because this is such a recent phenomenon, we know we can change the structure and direction of trade in these items. And the more difficult the Chinese government makes it for us to access the China market, the more this will happen.
"No single market can replace China, but wealthy consumers across the world want to buy more lobsters and more wine than the world can supply, and our commodities and resources are, as they were before the pandemic, high quality and well priced.
"Making the China market matter less, ironically, is also the best way to reduce the likelihood the Chinese government will use our trade against us, because it makes that trade much less of a weapon. If 20 per cent of our wine and lobster sales go to China in 2024, for example, bilateral trade will have returned to being more a simple calculation of mutual benefit that’s easier to divorce from politics and power."
These points are further enhanced by a poignant and timely question raised by senator for NSW, retired Major General and long-time advocate for a holistic National Sovereignty Strategy, Jim Molan, AO, DSC, who recently told Sky News: "The point that I make is that if we need to put $270 billion over the next 10 years into defence, what other parts of our society, of our nation do we need to address to match whatever this $270 billion is going to buy us in the end?
"The basis for our national security is the economy. The problem I have is how does a government know risks it is taking by not funding certain aspects of national security, if it doesn’t know what we absolutely need?"
Building on these points, Hartcher details two critical points, both of which Australia needs to use to empower itself as it charts a path forward over the next few decades: "There is no equivalence. So far Australia is holding firm against Xi’s campaign of coercion. It’s possible, however, that Xi could end up breaking Australia; we might end up yielding our independence to a rising fascist power. The least we can do is to stop making excuses for our oppressor in the meantime."
"The American poet Robert Frost once said that 'a liberal is a man too broad-minded to take his own side in a quarrel'. We have to decide whose side we are on," Hartcher poignantly states.
Australia is defined by its economic and strategic relationships with the Indo-Pacific and the access to the growing economies and to strategic sea lines of communication supporting over 90 per cent of global trade, a result of the cost-effective and reliable nature of sea transport.
Indo-Pacific Asia is at the epicentre of the 21st century’s era of great power competition and global maritime trade, with about US$5 trillion worth of trade flowing through the South China Sea and the strategic waterways and chokepoints of south-east Asia annually.
For Australia, a nation defined by this relationship with traditionally larger yet economically weaker regional neighbours, the growing economic prosperity of the region and corresponding arms build-up, combined with ancient and more recent enmities, competing geopolitical, economic and strategic interests, places the nation at the centre of the 21st century’s “great game”.
Enhancing Australia’s capacity to act as an independent power, incorporating great power-style strategic economic, diplomatic and military capability serves not only as a powerful symbol of Australia’s sovereignty and evolving responsibilities in supporting and enhancing the security and prosperity of Indo-Pacific Asia.
Australia is consistently told that as a nation we are torn between our economic relationship with China and the longstanding strategic partnership with the US, placing the country at the epicentre of a great power rivalry – but what if it didn’t have to be that way?
Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific and what you would like to see from Australia’s political leaders in terms of shaking up the nation’s approach to our regional partners.