A trade war that it had hoped would leave the other side in shambles turned out to be self-inflicted damage, and Beijing was resigned to it.
The year-long trade war between Australia and China has finally reached a stage recently: Australia’s exports to China hit the second highest level in history in 2020, with Australia, which is sanctioned by China, exporting A$148 billion of goods to China, A$6 billion lower than the record A$154 billion set in 2019, but nearly 10 percent higher than the third-ranked 2018. What makes China even more bitter is this: over the course of the year, the price of iron ore, Australia’s most profitable export industry, rose from about $60 per tonne to a record-breaking level of more than $200, for which China lost a lot of dollars.
Faced with this report card, the Australian community hailed their country’s beautiful win, and Chinese public opinion lamented: Australia is not as weak as we thought, and China is not as strong as we thought. A trade war that it had hoped would leave the other side in shambles turned out to be its own damage, and Beijing was resigned to it.
Beijing draws strategic inspiration from its trade war with the United States
China’s strategic vision for a trade war with Australia was undoubtedly inspired by the trade war between the U.S. and China. in late March 2018, when then-President Trump announced the start of a trade war with China, the Brookings Institution released a report on April 9, “How China’s proposed tariffs could affect U.S. workers and industries), which breaks down the impact of China’s two lists of tariffs to the county level in the U.S. Of the 2,742 counties, 2,247 (82 percent) voted for Trump in 2016. won eight of each. The study’s calculations show that if a trade war breaks out between the U.S. and China, it is likely to be President Trump’s deep red vote that will be hurt the most.
This is a clear message to Beijing: Soybean-based agricultural exports are a major concern for the Trump ticket. After discovering this, Beijing was like a treasure, and decided that this is Trump’s weakness, and decided to delay for change, to exchange time for space, to delay until the election year, there will be a turnaround. And Trump’s changing attitude at times in the trade war has reinforced Beijing’s confidence. By the time the epidemic spreads in 2020, China’s strategy of “stalling for change” will have worked. Beijing’s confidence then grew: China’s huge purchases are the weakness of the supplier country, and as long as it seizes the weakness, we in China have won against the world’s top power, and Australia, which is much weaker than the United States and heavily economically dependent on China, is still a sure bet.
Tactically, we can hurt Australia’s ten fingers but not dare to break its big finger
Accordingly, China has made a sandbox projection of China-Australia relations: more than 80% of China’s iron ore needs to rely on imports, and is concentrated in the four major foreign miners, according to the analysis of China’s iron ore import data in 2019, 67% is from Australia, followed by Brazil. Therefore, among the two major Australian commodities exported to China, China picks the main target is Australian coal rather than iron ore. Exports of the rest, such as wine, barley, beef, copper, sugar, lobster, timber and a host of other products, have also been called off or sanctioned by the Chinese Ministry of Commerce.
But Beijing has committed a tactical faux pas. Mao Zedong, the grandfather of the Chinese Communist Party, said in Chapter 5, Section 9 of “Strategic Issues in China’s Revolutionary War”: “For a man, it is better to wound his ten fingers than to break his one finger; for the enemy, it is better to rout his ten divisions than to annihilate his one division.” This means that when fighting a war, it is better to concentrate superior forces on annihilating an enemy’s The enemy’s living force. Beijing forgot Mao’s teachings, and the tactics of the trade war with Australia went exactly the opposite way, sparing Australia’s economic pillar of iron ore and grabbing the edges: iron ore (Iron Ore) accounted for nearly half of Australia’s exports to China in 2018, while wine, barley, etc. only accounted for a marginal tofu block.
Beijing did not expect that, with the increase in global steel production, Brazil’s supply could not keep up, not to mention the obvious low-cost advantage of several major Australian mining companies compared to Brazilian iron ore. The price of iron ore in Australia has been rising steadily, with the price of iron ore at nearly $160 per ton earlier this year, once topping $200, compared with about $60 a year ago. On the coal side, Australian producers have sought alternative export markets, particularly India, to counter China’s coal ban. While producers may not be able to get the same prices as before, China is forced to buy lower quality coal at higher prices, while Chinese competitors can buy Australian high quality coal at lower prices and benefit considerably. whitehaven Coal explained in its quarterly report to the ASX in December last year that China is sourcing Australian coal through other countries Whitehaven Coal explained in its quarterly report to the ASX last December that China was purchasing Australian coal through other countries.
Even for Australian agricultural products, China has not been able to get stuck in Australia’s neck. Only 33,000 tons of Australian barley has been exported to the Chinese market since October last year, according to the Australian Bureau of Statistics. During the same period, Saudi Arabia imported 1.5 million tons of Australian barley, making it Australia’s largest export market. Grain growers in Western Australia expect this year’s barley sowings to be near record highs.
The tactical blunders have led to the following results in the China-Australia trade war: Beijing has sanctioned a number of Australian exports in an attempt to hit the Australian economy hard, while at the same time it has had to buy large amounts of high-priced Australian iron ore and natural gas to blood the Australian economy. While China is “hitting hard” at Australian export industries such as wine and barley, Chinese steel companies are suffering from the continuous rise in iron ore prices.
It is important to note here that Beijing is afraid to choose iron ore as a target of sanctions because China itself is highly dependent on Australian iron ore. After this battle, China must realize that it has a serious external resource dependence, not only the purchase dependence of other countries on China, this interdependent relationship, advantages and disadvantages can be converted at any time.
China’s trade war with Australia has largely failed
In three ways, China’s trade war with Australia has failed.
- miscalculation in target selection.
To summarize the trade war, one question must be answered: Why did China pick Australia as the target among many Western countries?
Among Western countries, Australia is relatively weak and has been infiltrated by the Chinese Communist Party for years, cultivating many agents. Among the five-eyed alliance, the United States and the United Kingdom are among the five permanent members of the United Nations, so it is not easy to confront them; New Zealand is too weak and more subservient to Beijing, so it is not easy to win a strike against it, and it is also easy to hurt those who are friendly to China. Canada is close to the United States, the economic dependence on China is weak, a Meng Wanzhou case, China exerted pressure to dump the country, but also did not win. In comparison, the choice of Australia, which is medium in size and strength and has serious economic dependence on China, as the target of the attack, is easy to achieve the goal, but also to establish the prestige and enhance China’s international influence.
However, in about a year of the trade war, the Australian government’s diplomatic strategy towards China has demonstrated that we put our national dignity first and that we not only have the will to confront China, we have the courage to do so. It was this undignified confrontation that led the international community to launch a solidarity campaign to buy Australian wine when China cracked down on it.
- Beijing’s strong-arm diplomacy has suffered a setback.
Authoritarian totalitarian politics has never understood “equal” diplomacy. Beijing’s intention was to use Australia’s economic dependence on China to coerce Australia into changing its political attitude toward China through economic sanctions.
In November 2020, the Chinese Embassy in Australia issued a list of what Beijing considers to be the problems between China and Australia. The list listed 14 areas in which Beijing believes Australia has contributed to the deterioration of relations between the two countries, including the 2018 decision to ban Huawei from the 5G tender, the failure to recognize China’s claims in the South China Sea, and the so-called “reckless interference in the issues of Hong Kong, Xinjiang and Taiwan” and the demand to investigate the source of Covid-19. In the words of Chinese officials, Australia has become increasingly anti-Chinese in recent years and must be punished. This list of very bullying gestures came out and was called the “14 edicts” by the BBC and other media, treating other countries with the gesture of an edict, which was taken for granted by the rising China.
3、Educated its own people: China is not that scary.
When Beijing launched the trade war with Australia, not only did China’s big foreign propaganda series play up the heavy blow Australia would face, even the New York Times and others also played up the economic difficulties Australia would encounter from all sides, and talked about the risk of losing votes in the article “China officially bans coal imports from Australia, what does this mean for Australia” (December 17, 2020).
Now, faced with the report card of the first round of the China-Australia trade war, the Australian public finally recognizes that principles and national integrity are more important than short-term economic gains.
Will Beijing continue its trade war against Australia? The situation is akin to a triplet of tasteless chicken ribs, which are a pity to discard – there is nothing to be gained by China’s continued entanglement in the trade war, but to give up the “sanctions” at this moment would be embarrassing for Zhongnanhai, who equates face with dignity.
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