The conflict between Australia and China worsens with each passing day. The latest piece of news, China’s ‘indefinite’ pause in coal imports from Australia shows just how dangerous is the game that Australia is playing.
Australia’ apparent preparedness to sacrifice economic security now and into the future to better pursue American interests cannot be rationally explained. Our leaders speak about acting in Australia’s ‘national interest.’ How can the possible destruction of an economy, threats and belligerent posturing be in any way in our ‘national’ interest? There is an interest that is being served and it is that of Washington.
President-elect Joe Biden has been making some rather telling comments and making some rather interesting appointments as he readies himself for power. His political strategy and economic plans need assessing, as they have such serious implications for its most faithful and loyal deputy in the Asia-Pacific region.
As Obama’s vice-president, Biden played a major role in the United States shift of policy from engagement with to ‘containment’ of China. He oversaw the ‘pivot to Asia’ strategy which moved massive military power into the region, and which led to the building up of China’s defence capacity. At the same time the Trans-Pacific Partnership, the vast trade bloc that was designed to exclude China was initiated. Virtually all of the players in Obama’s anti-China push are now back in power. Antony Blinken, the choice for the role of secretary of state, is worth considering.
The New York Times recently described Blinken as a ‘a defender of global alliances” and said that he ‘will try to coalesce sceptical international partners into a new competition with China.’ While this may sound innocuous enough it needs to be seen alongside Biden’s recent pledge to spend $300 billion to ensure that China does not get the upper hand in research and development. Speaking to the New York Times Biden promised. ‘to fight like hell by investing in America first.’ He has also declared that he was in no hurry to wind back the 25 per cent tariffs that Trump imposed on Chinese products. Trade has increasingly become a weapon in the American quest to ‘contain’ China.
Biden’s choice of Katherine Tai as US trade representative is another clear indication of an unchanging anti-China policy. Biden praised the record of his choice as America’s chief trade enforcer against ‘unfair trade practices’ undertaken by China and that this would be a key priority for the new administration. Tai’s principal role is to seek to build a global anti-China cabal and to use the World Trade Organisation to exert additional pressure on China. The inference is that a veritable ‘coalition of the economically willing’ is to be set up to force China to play by US rules. This is an extremely dangerous ploy as China will seek to establish alliances, blocs will form, and the world will be facing off to ensure global market share and power.
America, as Biden has loudly proclaimed, ‘is back’ and is in the business of leading the world. It would seem that the Australian economy and the livelihoods of workers are of secondary concern. What is clear is that our political leaders, be they Coalition or Labor, remain in lockstep with the US, regardless of the cost.
One in every thirteen Australian jobs are directly derived from our relationship with China. Thirty per cent of our trade revenue comes from China. And this brings us back to the latest blow; China’s ‘indefinite’ pause in coal imports from Australia. Australian coal amounts to about 5 per cent of all Chinese coal imports and yet about 20 per cent of coal exported from Australia goes to China. Despite this and despite the absurdity of Australia being part of the US assault on China, we seem prepared to be first in this new coalition of the willing.
For America to be ‘back’ and for it to lead the world, China must be not merely ‘contained’ but its economic power ‘rolled back.’ This is the new US doctrine. Outgoing secretary of state, Mike Pompeo made use of cold war language when he set this new strategy in motion, referring to a choice between ‘Communist China’ or the ‘Free World.’ He bluntly claimed that the old paradigm of engagement needed to be replaced by a strategy that would ensure that the ‘free world’ would triumph over tyranny. The sinister nature of these words was dismissed by many. After all these words were uttered by Trump’s secretary of state. Biden, for his part, continually criticised the Trump administration for being too soft on China. Biden has yet to be sworn in and yet we can see the choices he is making, and they do not augur well for the world or the region.
It is one thing to play the bully, to make demands, and to issue threats. The US is, however, threatening an economic rival that would appear to be ready to respond in kind. Australia, by maintaining its dubious reputation as America’s most reliable and steadfast ally, is being swept up in this economic conflict and might well be one of the first casualties along the way. Economic ruin may well lie ahead, regionally and globally. What is even more disturbing is that the US in its quest to remain supreme might well be prepared to send the world to war to prove a point. Australia, it seems is willing to prove a point of its own. Present and future Australian governments, coalition or Labor, would appear to be prepared to accept economic death before dishonouring the alliance.
William Briggs is a political economist with special interest areas in the fields of political theory and international political economy. His latest book, China, the USA and Capitalism’s Last Crusade, will be published by Zero Books in mid-2021.
Dr William Briggs is a political economist. His special areas of interest lie in political theory and international political economy. He has been, variously, a teacher, journalist and political activist.
Comments
9 responses to “Australia, China and the weaponising of trade”
To Australians and indeed the other English speaking countries, the Chinese seems to be inscrutable (impossible to understand or interpret) as compared to our northern neighbours who understand the moves and intentions of a rising China. Their complacency and superior military hardward & attitude have blinded their ability to visualise China, which bid her time in rising to the surface quietly & “incognito”..
The 1970s strategy under Nixon administration, was a better strategy to accommodate China and the last 40 years of economic coupling has made both nations rich (US richer) and also benefited Australia, being in the right time and place to supply those minerals, oil and gas.
We now know what went wrong, ie. the Chinese excels herself in the business world, despite communism and the West were taken by surprise by the rapid rising of China and the agenda to stop her became the first priority, particularly on grounds of geopolitical dominance (hegemony), military might and global leadership.
Unfortunately, it is too late as the horse has bolted; there appear to be a lost of military superiority in high tech weapons etc. and a chance to win even a small war is remote for both sides. `The continued agenda to stop China rising will only lead to a hot war when no one will win; and every city in the world destroyed by nuclear holocaust.
We should all stand up and halt our pathway towards MAD; inclusion of a rising China is a gateway to peace for all in this planet.
And why are all the clearsighted understanding of our subservience to US interests as published here in P&I not being given wider presentation in the mainstream press – Oh, that’s right – Nine Media and NewsCorp serve US interests! So how about the ABC (Oh right – Paul Fletcher is bullying them)! I am wondering why Birmingham is being pushed out of Trade – having done his worst to lose the nation most of its trade to China…I guess we’ll see with the full reshuffle – or is it just a game of musical chairs. Making them all complicit in each other’s messes of the various key portfolios!
Canavan has given new meaning to the term convenient idiot. He cant be fair dinkum can he?
On 14 November, Peter Jennings, Director of the Australian Strategic Policy Institute (listed as such in the staff listing of the Defence Department), penned piece entitled “Alliance safe, but real danger lies ahead”.
https://www.aspi.org.au/opinion/alliance-safe-real-danger-lies-ahead
He opened his article thus:
“The fact is that brand Australia opens many doors in Washington. In the US military and intelligence establishment Australia is well regarded for our willingness to engage at the hard, war-fighting end of operations, for the quality of our military units, our intelligence work and direct, pragmatic diplomacy.”
The danger he went on to describe, was of the United States under Biden veering away from the bully approach of Trump.
He neither understands the United States beyond Pentagon chat-up, nor Australian interests, nor China.
Unfortunately Mr Jennings and other useful idiots in the service of conservative expansionist mates in the US, are immensely influential in this country. Attitude rules ahead of fact.
And unfortunately too many Australians have a penchant for sitting on the beach, belittling others and when something goes wrong entirely failing to accept any responsibility, as in “who the bloody hell do you think you are?”
Thus we will drown.
Sir,
Firstly, thank you for another brilliant article. I believe that while the US is trying its best to throw a spanner in the works of the Chinese in their effort to forge ahead economically, intentions and outcomes do not always match. Firstly, the US does not seem to have realistic understanding of China other than what they could glean from their spying activities. In a contest, winning or losing is as much about the mindset of the contestants as the hardware they possess. The Vietnam War is a case in point; and so is Afghanistan. This lack of understanding extends to those countries in the Asian region where they would attempt to build an anti-China cabal. What they fail or refuse to see is that many of the countries in the Asian region have economies so closely integrated with that of China that they would be committing economic suicide if they participate in killing the goose that lays the golden egg for them. The arrangement is a form of mutuality similar to that between Australia and China which our brilliant politicians are determined to kill. They send their rubber, oil palm, minerals, timber etc. to China in exchange for affordable consumer goods; thus lifting the living standards of their people and keeping them happy with their governments. Asians have a pragmatism forced on them by poorer economic circumstance. Australian hawks do not understand poverty or even reduced circumstances because they take our prosperity, partly due to our trade mutuality with China, for granted.
Secondly, in relation to military hardware, I believe that spyware does not always tell the full story. What strength they have, only they know. It is therefore unlikely that China will be caught unprepared after the frequent chest thumping by the US. Underestimating the strength of the enemy will be a fatal mistake in taking on a country of the size of China. If a hot war were to break out, I believe that it would be accidental rather than calculated, given the sabre rattling presence of the US in the region. If a serious conflict were to break out, it would not be one that hitherto see Australians in their lounge room watching TV footage of their soldiers meting out punishment to the hapless Afghans or Iraqi. We too will be the war zone. This time too, the US will be as vulnerable as the the enemy they are trying to punish – even if it is less so, there will be real destruction and suffering. In trying to dig a grave for others, we often dig our own.
A reasonable person would think that if China is doing so well economically, we will try harder to beat them at the game by becoming better – working harder, being more innovative and more astute in business. It is when a country that has always been the honcho sees its position being challenged and senses that it cannot keep up with the challenger that envy and malice creeps in. It is reflected in the behaviour and attitude of Donald Trump – the refusal to concede defeat even though it was a fair competition. That is not the behaviour of an honourable person but a sore loser. Fortunately, in the US, the loser is not able to use the force of arms to even out scores; but in geopolitics they could. This time, they may be biting off more than they can chew if an accident were to happen from their posturing in close proximity to the enemy.
Sincerely,
Teow Loon Ti
John your exports to China are off – they hit 48% last year to China. See here.
https://www.afr.com/policy/economy/china-hits-48-8pc-of-australian-exports-20200804-p55i9d
I think its important to also honestly assess their tech position – their primary focus is now on dominating tech – it is the primary means of sovereign dominance and has been since the long bow, fast ships, and gun powder.
Bidens $300 Billion pales into comparison with Chinas trillion investment in Chips and semiconductor dominance. They have looked to technology jump as its known (e.g. Africa to mobile skipping national copper telephony grids) – and develop carbon based chips and are miles in front of the west in this regard.
Their dominance with their release of Quantum computing last week has them with Quantum supremacy as its known – while the original configuration is for a specific task this can easily be reconfigured for tasks such as de-cryption – their current machine can do in mere seconds what the most powerful computer in the USA would take 2.5 Billion years to complete – itself a Google Quantum computer.
China has had for a long time Quantum ground based military communications network and satellite links. They have quantum radar capable of detecting all stealth and recently unveiled quantum sonar.
This week they returned with soil samples from the moon, while last week they switched on their fusion reactor – earth based sun – which is running well and has the potential to supply vast amounts of power – the western version which China is part of is at least half a decade away.
They also announced the Sodram Hypersonic jet engine which uses the Sonic Boom to supply compressed air which can travel at Mach 13 – almost three times the speed of anything the US has.
Their Huan-20 and strike Stealth bomber have been tentatively released both providing long range stealth capacity along with two near nuclear carriers and the worlds largest navy.
In short – Chinas technology and capacity trajectory is now vastly in front of the USA – while the USA is inversely contracting at possibly an even faster rate.
Australia has been played like fools and the coordinated response includes all 5 eyes, particularly UK.
Unfortunately Australia seems to think it can renegoiate its position, that we have bargaining power, that we matter and that Chinas demand can simply be replaced – the level of incalculable stupidity involved in websites like macrobusiness.com.au is beyond belief.
Our climate denying, coal loving government personified by Scotty have well and truly missed the boat now that the Arctic ice has retreated because of climate change and opened up the entire Northern Russia coast line to shipping. Russia produces very high quality anthracite , so it looks like our crappy thermal stuff, and maybe even the coking coal will get the flick.
Our overpriced lobster, wine and beef is gone too. Chinese spending on luxury items has declined 35% this year, as China’s leaders encourage a buy local campaign. And don’t think iron ore will save us. It seems apparent that China is stockpiling this product, probably in anticipation of other iron ore resources coming on stream in the future.
We will pay a huge price for inaction on climate change and reliance on coal, when we could have been well down the track with renewable energy and sustainable industries, no thanks to nearly a decade of Liberal and national incompetence and corruption.
As Clinton’s adivsor said in 1992, “It’s the economy, stupid.”
Iron Ore price is currently being held aloft by Chinas ban on all imported recycling. China was THE WORLDS recycler up until 2020. This blanket ban meant scrap could no longer be imported which makes up close to 20-30% of steel output. Steel scrap, along with copper, is being reclassified as a resource to allow it to be imported starting January 2021.
The Ore price is also high due to their implementation of a multi-trillion national infrastructure boost in rail and high tech – industrial internet, national energy grid, national car charging network, 5g etc.
At their latest plenary they also switched focus to hydrogen driven steel manufacturing – this is based on German tech for ore smelting but also 200 local mills using arc furnaces with hydrogen in scrap. In other words China is heading for massive reductions in ore requirements through green steel via scrap.
They are also expanding their ports capacity for taking in Brazil Valemax ships from 2 to 13 and incorporating these into their Simandou plans – basically China is looking to remove ALL reliance on Australian iron ore over the next few years.
As Paul Murray would say. We are punching above our weight. In boxing it is well known that people who fight out of their weight division get knocked out.