Australia’s ‘amateurish’ China diplomacy sets business on edge

This week marks the fifth anniversary of the China-Australia free trade deal, a diplomatic triumph that has boosted trade by A$100bn a year. But no one is celebrating in Canberra amid a breakdown in bilateral relations, which has sparked a rare debate about Australian diplomacy.

Foreign policy is characterised by bipartisan agreement between Labor and the conservative government, which has held power since 2013. But Prime Minister Scott Morrison’s furious reaction to a tweet by a Chinese diplomat and Beijing’s imposition of trade sanctions on Australian products have caused disquiet about the handling of China relations.

“I think the government really does need to stop focusing on splashy headlines and work out what is it doing, how is it helping our exporters, how is it helping those who are so dependent, and have become more dependent on China for Australian jobs,” Penny Wong, Labor spokesman on foreign affairs, told Australian television last week.

“In diplomacy you always have to think about how you calibrate your response.”

Ms Wong’s criticism was directed at Mr Morrison’s decision to respond directly to a mid-level Chinese diplomat’s “repugnant” social media post, which depicted an Australian soldier holding a knife to the throat of an Afghan child.

The government has dismissed Labor’s criticism, noting that the opposition party has backed all its main policies, including excluding Huawei from 5G networks, combating foreign interference and calling for an international inquiry into the origins of Covid-19 in Wuhan.

“They [Labor] are in lockstep with the government,” said Dave Sharma, an MP for the ruling Liberal party and former diplomat.

“The same party which always urges Australia to be a ‘creative middle power’ seems to have a problem when Australia articulates its viewpoint on the world stage. You cannot have it both ways.”

Nevertheless, some commentators and businesses fear Canberra is quietly departing from its long-held position that it does not have to choose between China, its largest trade partner, and the US, its strategic ally.

“Australian foreign policy with respect to China has been weaponised, and it’s largely because I feel the security, intelligence and defence establishment has taken over the management on Australia’s foreign policy over the past six years,” said Geoff Raby, a former Australian ambassador to China, who runs a consultancy and is a board member of Yancoal, which is majority owned by a state-backed Chinese company.

Trumpeting policy shifts directed towards China, such as banning Huawei from 5G or tough foreign interference laws, had needlessly irritated Beijing, said Mr Raby.

Seething diplomatic and trade tensions have also alarmed Australian businesses, which have publicly urged Canberra to pursue a reset with Beijing. In private, an executive at a multibillion-dollar company with Chinese partners told the Financial Times that the government’s diplomatic strategy had been “amateurish”.

James Robson, owner of Ross Hill Wines in Orange, New South Wales, warned Beijing’s imposition of tariffs on Australian wine was terrible news for the industry and questioned the government’s diplomatic strategy. “We don’t understand why the Federal government picked a fight with our biggest customer,” he told Australia’s national broadcaster ABC.

Prime Minister Scott Morrison, whose diplomatic push back against China, Australia’s largest trading partner, has come under fire © Getty Images

The deterioration in Sino-Australian relations has been swift and painful. Back in 2014, China’s president Xi Jinping was accorded the rare honour of addressing Australia’s parliament. His speech lauded the “oceans of goodwill” between the nations and laid the groundwork for a trade deal, which boosted two way trade to a record A$252bn ($191bn) last year.

But in the past six months, Beijing has slapped tariffs on barley and wine and is disrupting imports of many other Australian goods. Chinese ministers refuse to return calls from their Australian counterparts and its diplomats are deploying confrontational “wolf warrior” tactics, such as leaking a 14-point memo to media blaming Canberra for the breakdown.

Mr Morrison declared last month that Canberra did not want to be forced into a “binary choice” between superpowers.

“Our actions are wrongly seen and interpreted by some only through the lens of the strategic competition between China and the United States,” Mr Morrison said. “It’s as if Australia does not have its own unique interests or views as an independent sovereign state.” 

There is no doubt, said analysts, that managing China relations has become more challenging as Beijing asserts its national interests and the US pushes back. Beijing’s territorial land grabs in the South China Sea, its crackdown in Hong Kong and human rights abuses in Xinjiang have alarmed diplomats, they said.

Many China scholars support Canberra’s forthright approach in defending its values, including demanding an apology from Beijing over the tweet, which followed Canberra’s publication last month of a critical war crimes report. Labor also condemned the post, although it has urged the government to respond strategically, rather than “be emotional”.

James Curran, professor of history at University of Sydney, said the failing in Canberra’s diplomacy towards Beijing has not been the substance of its policy but rather the presentation. In particular, the decision to call for a Covid-19 inquiry was a mis-step, owing to the lack of consultation with China and other nations.

Mr Curran said Canberra’s naivety had left it exposed to economic coercion from Beijing, which has used Australia as a warning to other nations of the risk of getting too close to the US.

Other countries, such as New Zealand, have been more successful by speaking out in concert with allies against Beijing, for example regarding political repression in Hong Kong, without suffering a backlash, he said.

“Some Australian analysts have not hesitated to state that not only is Australia at the vanguard of ‘pushing back’ against China,” said Mr Curran. “But will America come to Australia’s aid in terms of our export markets that have been affected? No.”

Source: Economy - ft.com