China’s rise not as certain as they’d have us believe

Beijing’s vindictive punishment of our universities, tourist sector, farmers, coal exporters and Karm Gilespie has shattered two widely held assumptions about China’s rise: that it will continue inexorably and is overwhelmingly to our benefit.

Legions of operators in the Chinese Communist Party’s Central Propaganda Department have skilfully spun the narrative that the country’s return to greatness is preordained. Best to get on the train before it leaves the station. We did in our thousands, crowding on to gleaming new locomotives to discover the mysteries and beauty of China, while trade boomed and the education and tourist sectors profited from an influx of Chinese students and free-spending tourists.

A few lone voices warned it might not be wise to put so many eggs in the China basket. Dependence on one market could expose Australians to unacceptable risk in the event of an economic shock or turn in the relationship. These warnings were largely ignored because there seemed no downside to ever strengthening ties with a country that had an insatiable appetite for all things Australian.

Well, the party is over and the true costs of the relationship are evident. Diversification away from China is an imperative. We have allowed ourselves to become overly dependent on China to our detriment. Whether measured in dollars, lost independence or fundamental human rights, the price of not diversifying China risk is too great. We can’t be held hostage to China’s whims and coercion.

Protecting our interests and preserving our independence require a more calculating approach based on mutual benefit. Why do we allow Confucian Institutes in our universities when they serve another country’s interests?

China has changed, not us. There is no special relationship or strategic partnership. Factoring this reality into our policy settings means a managed, selective, decoupling from China. This is not a rejection of trade or the relationship but a rethinking of interdependence. The coronavirus crisis has exposed the fragility of just-in-time supply chains and the folly of relying on a single country for critical goods and infrastructure. Some economic separation is unavoidable and necessary.

Beijing is a practised decoupler. It has avoided dependencies, creating protective trade barriers and positioning itself to control strategic areas of the international economy from rare earths and pharmaceuticals to advanced manufacturing. Its success has been due, in no small part, to Western neglect and a reluctance to confront its dirigiste impulses.

Self-styled pragmatists justify hitching our wagon to China by­ ­assuming the much-touted Asian century will be China’s century – so best to contain our reservations about the autocratic party-state and learn to live with and profit from its continuing rise.

It’s a false assumption based on flawed strategic logic. US-China rivalry threatens to derail the promise of the Asian century and the anticipated China ascendancy. In a sober reassessment of Asia’s future for the journal Foreign Affairs, Singapore Prime Minister Lee Hsien Loong says: “An Asian century is neither inevitable nor foreordained. The troubled US-Chinese relationship raises profound questions about Asia’s future and the shape of the emerging international order.”

China’s ambitions face growing headwinds on many fronts. Over-reach and an ­increasingly aggressive national strategy have cost it American goodwill and threaten to alienate much of Asia and Europe. Australia is not the only country on the receiving end of Beijing’s wolf-warrior diplomacy and strongarm tactics.

In focusing on our vulnerabilities, China’s weaknesses are too often ignored. Exposed by the coronavirus and the US push back, China’s power may already have peaked, challenging the notion that the communist nation will­ ­inevitably become the dominant state and global rules-setter.

Despite the polarisation of American politics, the US is far from a nation in decline. In the ongoing trade and tech wars with China, Donald Trump has demonstrated a willingness to use the still formidable tools at his disposal to force Xi ­Jinping into trade concessions and make life difficult for Chinese tech champions such as Huawei and ZTE.

Closer to home, China’s relations with Asian neighbours have deteriorated markedly, causing more headaches for Xi. Except for prickly North Korea, compliant Cambodia and tiny Laos, the rest of Asia is united in wanting a ­restraining and balancing US regional presence. India, Japan, South Korea and Taiwan have all been victims of Chinese belligerence. After a long period of quiescence to China’s militarisation of the South China Sea, Malaysia and Indonesia are reasserting their sovereignty. Even the usually pro-China Rodrigo Duterte has reversed his decision to end a bedrock defence treaty with the US because of China’s continued harassment of Filipino fishers.

Relations with Europe also have taken a turn for the worse, precipitated by China’s ill-conceived attempts to score a propaganda win by supplying poor quality face masks and other medical equipment to countries afflicted by the coronavirus. Chinese officials compounded the fiasco of their mask diplomacy by faulting Europeans for their allegedly poor crisis management.

China has not lost Europe yet, but there is growing anti-China sentiment across the continent. NATO Secretary General Jens Stoltenberg has called out China’s “bullying and coercion”, signalling a toughening of European security policy towards Beijing. Britain has reversed course on Huawei, easing the Chinese company out of its 5G network.

All this could have been avoided if China had been true to its “peaceful rise” rhetoric of win-win outcomes. Unfortunately, winning for China is all too often a loss for the interests, freedoms and independence of other countries. That’s not a price we should pay.

Alan Dupont is chief executive of the Cognoscenti Group and a nonresident fellow at the Lowy Institute.