The Chinese Communist Party has been exerting economic and military pressure on Australia in an attempt to make an example of it around the world, but it has not only failed to achieve its intended purpose, but has also lost the trust of its allies and neighbors, and contributed to the effect of other countries joining together against the Chinese Communist Party.
A former senior national security adviser to Australia’s foreign minister, Dr. John Lee is now a senior fellow at the Hudson Institute and an adjunct professor at the Center for American Studies at the University of Sydney. In a recent article in The Hill entitled “The Chinese Communist Party is digging a hole for itself the size of Australia,” he describes how the Chinese Communist Party has not only failed to coerce Australia, but has fallen into a hole of its own.
Dr. Lee begins by writing that the CCP does not seem to care about the so-called “law of the loophole”: if you find yourself in a trap, stop digging. A case in point is the string of economic coercion and a litany of insults that the Chinese Communist Party has used against Australia. Beijing’s malicious behavior proves that the Trump and Biden administrations were right in identifying the CCP as the overall challenge of our time.
Michael Shoebridge, director of the Australian Strategic Policy Institute’s (ASPI) Defense Security Program, previously told news.com.au that the Chinese Communist Party’s retaliation against Australia was intended to send a message to the world that small countries should not have the audacity to defy the will of the Chinese Communist Party.
Dr Lee said Australia was demonstrating that smaller allies had their own unique strengths and that it would not be easy for the Chinese Communist Party to fully coerce the democratic nation into submission.
“This dispute may go on for some time, but Australia is determined to stand its ground and face adversity no matter what. Beijing seems ready to target other countries, and it is crucial for the United States to help these allies gain confidence in confronting the Communist Party.” He said.
China’s economic coercion against Australia has had little effect
Since 2010, the Chinese Communist Party has imposed at least 150 acts of economic coercion on a number of countries and companies, more than half of which have occurred in the past two years. Dr. Li’s article explains why the CCP is targeting Australia.
He writes that Australia is an easy target, a country that relies heavily on exports of minerals, energy and agricultural products, with more than a third of every dollar of Australian goods exported going to China. From a trade perspective, this makes Australia the most dependent developed economy in the world on the Chinese market.
Communist China’s economic measures to sanction Australia, such as the ban against Australian coal, have backfired in many ways. The CCP chose to ban Australian coal from entering China at the same time as the mainland was experiencing its coldest winter in 50 years, resulting in power supply constraints in many parts of the country and some Chinese residents losing their heating as the weather froze. And Australian coal companies quickly adjusted after the initial export setback, replacing China with the Japanese and Indian markets.
In the past year, barley sales that should have gone to China have successfully tapped Saudi Arabia and other Middle Eastern markets, and lobster and wine are still trying to find new markets.
According to data released by the Australian Bureau of Statistics in June of this year, the gross domestic product (GDP) and exports both grew in the first quarter. In contrast, the Chinese Communist Party has tried to coerce Australia to change its hard-line attitude toward criticism through a series of trade penalties, with little success.
The Chinese Communist Party’s approach to coercing Australia is very different from the past
Dr. Li also compares the coercive approach taken by the Chinese Communist Party towards Australia to the sanctions and coercion used in the past against economies such as Japan, South Korea, the Philippines, Canada and the United Kingdom.
He writes that while there is no doubt that previous sanctions and coercion (such as tariff increases) were the CCP’s response to these countries going against the wishes of the CCP government, the CCP often denies any connection between the (CCP-unpleasant) decisions of these governments and the CCP’s sanctions and coercion, leaving itself some room for good offices. For example, restrictions on China’s rare earth exports are claimed by the CCP government as a decision to reduce domestic processing and production of rare earths for environmental reasons; boycotts of South Korean companies are said by the CCP to be initiated by angry Chinese citizens, not by the regime.
“This disguise allows the CCP government to shift blame to some extent, and even if this is hardly convincing, it at least prevents countries sanctioned by the CCP from having the opportunity to obtain a ruling against the CCP through the arbitration mechanism of the World Trade Organization. Sanctioning or coercing nongovernmental private institutions or companies adds discretion to CCP coercion, while creating a great sense of apprehension for the governments of those targeted countries.” He said.
Such CCP sanctions and coercive practices are argued by pro-CCP advocates as unprovable against a particular government, which allows pro-Chinese lobbies in the targeted countries to accuse their own governments of mishandling relations with the CCP government, the article writes. In the absence of international arbitration confirming the illegality of the CCP’s sanctions, it is also more difficult for other countries to condemn the CCP’s actions, which only encourages other countries to stay out of the way as much as possible and work less against the CCP so that they do not suffer the same treatment.
In his article, Dr. Li illustrates the difference in the CCP’s coercion of Australia: With the recent sanctions actions against Australia, Beijing has changed the rules of the game. Senior Chinese Communist Party officials have signaled threats even before many of the economic sanctions were imposed. In an unusual move, the Chinese Embassy in Canberra even issued a statement of “14 grievances” against the Australian government last November as justification for these sanctions, including dissatisfaction with the Australian government’s criticism of the CCP’s provocative actions in the South China Sea and threats of force against Taiwan.
Most of the CCP’s grievances relate to Australia’s domestic policies and legislation, such as the decision to restrict foreign investment and the ban on Huawei’s participation in the construction of Australia’s 5G system. Dr. Li said this confirms that the CCP is retaliating against Australia for the Australian government’s refusal to give the CCP the power to participate in or veto Australia’s domestic policies; and dispels a misconception that many mistakenly believe that repairing relations with Communist China only requires Australia to allow the CCP to do what it wants in Australia’s strategic periphery.
Beijing now finds itself in a quandary
Beijing now finds itself in a quandary. According to Dr. Li, a key tool of the CCP’s international strategy is to weaken the U.S. alliance by forcing (America’s) smaller allies to adopt a more tolerant policy toward the CCP. The fact that the real threat of the CCP has been exposed to the world and has strengthened the resolve of Australian politicians, business and social elites and the public to resist Beijing means that Australia is ready to face psychologically and politically the dilemmas it may face as a result of confronting the CCP. The goal of Chinese Communist coercion has been defeated.
The effect of the CCP’s trade war against Australia, contrary to past experience in international relations and international trade order, shows a new trend of democracies supporting each other and strengthening their purchases from Australia, said Su Ziyun, director of the Institute of Military Strategy and Industry at Taiwan’s National Defense and Security Research Institute.
After months of negotiations, Australian Prime Minister Morrison and British Prime Minister Johnson reached an agreement in principle on a free trade agreement between the two countries following the G7 summit.
Australia’s Nine News reports that this is the first major post-Brexit trade deal, and that Australian exporters could gain more export access from the unstable mainland Chinese market through the agreement. The agreement is expected to bring an annual economic benefit of A$1.3 billion to Australia.
A survey of 1,032 academics, policy makers, business people, civil society leaders, media, and regional and international organizations in 10 ASEAN member countries conducted by the Institute of Southeast Asian Studies (ISEAS), a think tank, in February this year found that concerns about China (the Chinese Communist Party) are growing in ASEAN countries. The total population of these countries is 655.5 million people.
The latest survey shows that if they had to choose a side between China and the United States, more than 60 percent of respondents would choose the United States over China. Compared to last year’s survey, nearly 10 percent more respondents supported the United States. Respondents in Thailand, Indonesia, Vietnam, Malaysia, Cambodia and the Philippines all increased their support for the United States.
In concluding the article, Dr. Lee emphasizes that this is why the U.S. needs to not only stand by Australia, but also show that it will stand up for other allies if and when they are bullied, which will cause Beijing to fold the deeper the Chinese Communist Party will fall into the hole it has dug for itself.