Commentary |
20 March 2021

Australia can teach the UK a lesson in Chinese wrath

London may have to learn the hard way that it cannot have its cake and eat it with Beijing. Originally published in the Financial Times.

Richard McGregor
Richard McGregor

Even before Boris Johnson announced the results of his country’s national security review this week, China’s communist party tabloid, the Global Times, was asking: “Will the UK be the next Australia?”

As prime minister, Johnson has promoted “Australian-style” trade deals and immigration reforms for the UK. It is doubtful that he aspired to mimic Australia in another area — its relationship with China. Beijing is sharply at odds with the US, India, Canada and Japan, among other nations. But none has felt its ire like Australia, which has seen once strong political and trade ties with China unravel dramatically.

Beijing barely bothers to hide that its sanctions, targeting up to $19bn in Australian exports, are punishment for political disagreements. Canberra’s complaints are dismissed as “playing the victim”. Does the same fate await “Global Britain” just when it is looking for new markets after Brexit? China has warned relations are headed in that direction, and the UK’s national security experts appear to agree.

Britain’s defence review was remarkably blunt, calling China “a systemic challenge” to British values and prosperity and “the biggest state-based threat” to the country’s economic security. But the UK may be about to find out what Australia already knows, that it is no easy thing to change China policy, and, given Beijing’s sensitivities, there is a steep price to be paid in doing so.

The UK will have to get used to regular threats, to its education market and indeed any export which China can source elsewhere. A bilateral trade deal will be delayed, a real cost when the Chinese economy accounts for about a third of global growth.

There will be much ritual abuse in the Chinese state media. Just as Australia is depicted as an oversized kangaroo gormlessly hopping after the US, an image of the UK as a puffed-out lion yearning hopelessly for imperial glories will fill Chinese minds. Beijing will remind the UK that it will be on the wrong side of history if it sticks with its democratic partners. As the catchphrase of the popular press and politburo members in Beijing has it: “The east is rising, and the west is declining.”

Despite the UK’s hardening line towards China, Johnson declared himself last month to be “fervently Sinophile” and committed to good ties whatever the odd political difficulty. He can be forgiven for his incoherence. If Australia is any guide, it is a stage political leaders go through until they realise that, however much they want it both ways, Beijing won’t allow it.

As in Britain’s case, Australia’s relations with China fell apart in the way that Ernest Hemingway described going into bankruptcy — gradually, then suddenly. Many of the same issues abound: the banning of China’s Huawei from new telecommunications networks, condemnation of Beijing’s dismantling of democracy in Hong Kong and the Uyghur re-education camps in Xinjiang.

Australia’s relations comprehensively collapsed after Canberra called for an independent inquiry into the coronavirus outbreak in Wuhan. Given that the virus has killed millions and cratered much of the global economy, the case for an inquiry was unassailable. Canberra, however, handled the issue poorly.

By springing it on China and pushing for an inquiry on its own, Australia was left exposed. Hardliners in Beijing started doling out the punishment. Still, the inept diplomacy and ensuing Chinese sanctions turned out to be a teachable moment for Australia — and for its friends and allies overseas.

Beijing has imposed trade sanctions on many countries over the years, banning salmon from Norway and tropical fruit from the Philippines, slowing the export of rare earths to Japan and punishing South Korea in 2016-17 for installing a US anti-missile shield.

But the scale of the Australia sanctions are unprecedented — about 13 sectors in all, equal to more than 10 per cent of Australia’s exports. More wait in the wings, once the tourism and education sectors reopen after the pandemic.

Countering these measures, or alleviating their impact as a political weapon, is difficult, especially when commercial interests in friendly countries benefit from them. US farmers and Canadian miners have stepped in to fill the gap left by Australian crops and coal. French, Chilean and South African winemakers have rushed to make up the market in Shiraz and Chardonnay.

The world may be dividing into two geopolitical camps aligned with the US and China. But it does not operate in two separate commercial realms.

The next, harder step is economic co-operation among democracies such as the US, the UK and Australia to help nations singled out by Beijing for punishment. Kurt Campbell, who heads Indo-Pacific policy in the US National Security Council, said this month that Washington had told Beijing there would no improvement in ties while an ally is under “economic coercion”.

Beijing rails at such co-ordination. A party paper lashed out at the Five Eyes intelligence partnership, calling it an “axis of white supremacy”. But China’s behaviour is pushing friends and allies together, as the US made clear in a diplomatic confrontation in Alaska on Friday. Australia values their support. So too, soon, might the UK.