Australia’s government had a minor meltdown last week, with Prime Minister Scott Morrison calling an impromptu press conference to demand an apology for a “repugnant” Twitter post by a Chinese government spokesperson that contained a doctored image of an Australian soldier holding a knife to an Afghan child’s throat. The image, which Chinese Foreign Ministry Spokesman Zhao Lijian tweeted from his verified account, had a caption that read, “Don’t be afraid, we are coming to bring you peace.” Zhao’s accompanying text in the Twitter post expressed shock at the death of Afghan civilians and prisoners at Australian hands, calling for accountability.
A week earlier, the Australian government had released the findings of an official inquiry that documented the murders of 39 Afghan civilians or prisoners by Australian special forces soldiers. Known as the Brereton Report, it was the result of a four-and-a-half-year investigation into allegations of Australian war crimes in Afghanistan. Police investigations into the atrocities described in the report are forthcoming.
Morrison’s anger at Zhao’s grotesque provocation was certainly justified, but that didn’t make it a good idea to hold a press conference. China’s ambassador to Australia should have been called in for a private dressing down by a senior official, but instead, it looked like the nation’s prime minister had been goaded by a mid-ranking Chinese bureaucrat into demanding an apology he was never going to get. What should have been a firm but quiet statement of Australia’s disgust at Zhao’s indecency became a test of strength that Australia couldn’t win.
From Australia’s perspective, the pressure had been building. Days before Morrison’s press conference, China announced tariffs of 107 percent to 212 percent on imported Australian wine. Beijing had targeted other key Australian exports earlier in the year, including barley and beef, affecting billions of dollars in trade. Earlier this year, Cheng Lei, a Chinese-born Australian journalist who worked as a TV anchor for a Chinese state media outlet, was detained on vague charges of “endangering national security.” Two other Australian journalists, Bill Birtles and Michael Smith, were forced to leave the country after being aggressively questioned by authorities in connection with Cheng’s case.
In fact, Australia has been in the diplomatic deep-freeze with China for more than two years. In June 2018, Australia introduced new laws to guard against foreign interference in its politics, mainly due to concern about China’s influence activities. Two months later, Australia became the first nation to ban the Chinese telecommunications giant Huawei from competing to build its 5G communications network. This year, the Morrison government clumsily called for an international investigation into the origins of the coronavirus pandemic in a way that clearly targeted China. And Australia’s 2020 Strategic Review signaled a navy-led effort to expand the military, with the threat from China in its sights. Many of these developments were part of an extraordinary 14-point list of grievances that the Chinese embassy in Canberra leaked to local media outlets last month.
So, emotions were high last week at Morrison’s press conference. But for all the heat, there was not much light. Australia seems no closer to answering the question: How do we get out of this downward spiral in relations with China?
For months now, Australians have heard calls for trade diversification to reduce its dependency on Beijing. But “dependency” is really inter-dependency, because China imports 60 percent of its iron ore from Australia, and it cannot source that quantity from any other country. Nor can Australia easily find new markets for its exports on the scale of China; if diversification was profitable, Australian exporters would have done it already.
Of course, there is an argument that Australian companies now have an imperative to diversify, thanks to China’s tariffs and the need to price in more political risk to their efforts to expand market share in China. But that’s something these businesses can judge for themselves; the market, in the end, will decide. And the market is saying that Australia’s trading relationship with China will, in fact, become more important, not less. Australian exports to China have actually grown while diplomatic relations have cooled, and they are likely to keep doing so.
Australia’s friends and allies are in a similar position: For all of them, China will become an increasingly important market. Last week, in response to China’s new tariffs, politicians and commentators in Europe and the United States encouraged their fellow citizens to buy Australian wine. Widely heralded as an act of solidarity, it was in fact an empty gesture, because it demanded no sacrifice. More than a third of Australia’s wine exports were going to China, so the sudden rise in supply triggered by the new tariffs will probably make Australian wine cheaper for consumers elsewhere. If, in the future, standing shoulder-to-shoulder against China imposes actual costs, Australia’s friends and allies are more likely to wish it well, and then back away slowly.
Australia should assume that its friends and allies will always put their own economic interests first, and they will behave the same way when it comes to security. Australia’s China hawks are rightly alarmed about Beijing’s rapidly growing military capabilities, but their solution is to lean more on Australia’s alliance with the U.S. and to build new regional security partnerships. This stance has been encouraged by Joe Biden’s recent victory in the U.S. presidential election. Whereas President Donald Trump is a lifelong sceptic of America’s security alliances, Biden says he stands for a return to American leadership and commitment to allies. “The best China strategy,” he told The New York Times last week, “is one which gets every one of our—or at least what used to be our—allies on the same page.”
Initiatives like the Quadrilateral Security Dialogue—a partnership between the U.S., Japan, India and Australia that is better known as the Quad—are touted as promising new platforms to bring together powerful nations with a common interest in keeping Chinese power in check. But in the event of a security crisis between China and Japan or India or Australia, it is almost impossible to imagine any of the smaller Quad partners offering substantive support to any of the others. Neither Japan nor India nor Australia have a big enough interest in protecting each others’ security to justify that kind of risk. On the contrary, each has valuable economic reasons to maintain good relations with Beijing. Nor will Biden’s victory reverse the steady relative decline of American power in Asia; the president-elect has shown no indication that he will order the Reagan-like arms build-up that would be needed to reverse the strategic trends favoring China.
So, if Australia wants to defend itself and its interests against China’s aggression, it will need to do so largely independently. It is not an impossible task. Australia’s economy is already well placed to withstand the kind of shocks China is meting out. As for national defense, Australia still enjoys the advantage of distance, and it is not beyond Australia to build a maritime defense capability that can impose too high a cost on any great power which wanted to challenge it.
Unless Australia is prepared to make concessions, there is no easy solution to the downward spiral of Australia-China relations. But the market does impose limits on how bad it can get. After all, when China imposes tariffs it is Chinese consumers who suffer, not just Australian exporters. And the lucrative iron-ore trade is likely to remain untouched because it is not in China’s interest to threaten it. In the meantime, a quiet and resolute stoicism, coupled with economic and national security policies which improve Australia’s resilience, will demonstrate to Beijing that the pay-offs for coercion do not justify the costs.
Sam Roggeveen is Director of the International Security Program at the Lowy Institute in Sydney.