A (true) short history of Australia’s China de-coupling

Some nice work from Reuters over the weekend which presented an antidote to the kind of lies we still hear from some unjournalists, bought businesspeople, and (usually Labor) politicians:

For years, the Australian political and business establishment had a paramount goal: protect and expand this natural resource powerhouse’s booming exports to fast-growing China. Iron ore, coal, natural gas, wine and more: Until COVID-19 struck, Australia had a 29-year run without a single recession as it sent its signature goods to the world’s voracious No. 2 economy. Canberra’s diplomacy came to focus on balancing the Chinese trade relationship with the nation’s equally important defense alliance with the United States.

But the paradigm through which the government of Prime Minister Scott Morrison now views China has shifted dramatically, people inside his government told Reuters. The relationship is no longer shaped just by trade, but by a stark view emerging widely inside this continent-spanning country – that Beijing poses a threat to Australia’s democracy and national sovereignty.

Discussions about China inside Morrison’s cabinet now revolve around the need to preserve sovereignty and fend off Chinese efforts to sway Australian politics, two government sources told Reuters.

…Reuters spoke to 19 current and former Australian government officials and two former prime ministers in examining how relations with China have deteriorated. They provided the first comprehensive account of how the government came to adopt its view that Australia must “speak up,” as several ministers have said, about Beijing’s actions.


…The economic relationship peaked with the signing of a free trade agreement at the end of 2015 that lowered Chinese tariffs on agriculture, dairy and wine, and promised to open the door for Australian banking and other professional services to China’s restricted market.

But Australia was jolted within months of the signing when Beijing refused to recognise a 2016 international court ruling that China had no historical claim over disputed islands in the South China Sea. The Turnbull government joined Washington in rebuking China.

Canberra was also becoming concerned by growing Chinese attempts at influence in Australia, particularly through political donations from Chinese businessmen to local politicians that had come to light. In December 2017, Turnbull introduced foreign interference laws to parliament. Among the activities the law aimed to curb were the Chinese Communist Party’s covert influence over Chinese students on university campuses, interference by Beijing in local Chinese-language media, and attempts by China to shape decisions by Australian politicians, from local councils to federal members of parliament.

A report on these and other Chinese activities prepared by the Australian Security Intelligence Organisation (ASIO), the country’s national security agency, had “galvanized us to take action,” Turnbull said at the time.

Beijing reacted furiously to the foreign interference legislation and responded by freezing diplomatic visits. This included an end to annual leaders’ visits.

After the 2017 report by ASIO, defense and security agencies took over running China policy, along with key advisers in then-Prime Minister Turnbull’s office, three former diplomats said. The foreign ministry, which preferred a lower-key approach, was sidelined.

Cyber intrusions were becoming a major concern. Alastair MacGibbon, Turnbull’s special adviser on cyber security and former head of the Australian Cyber Security Centre, told Reuters that China was probing companies to gather intelligence about resources or investment areas to benefit its state-owned enterprises.

“China has very significant capability, and was making strategic grabs of what competitors, friends and foes were doing,” said MacGibbon, who is now the chief strategy officer at CyberCX, a private cyber security firm.

…In August 2018, Australia became the first country to effectively ban Chinese tech giant Huawei from its next-generation 5G telecom network on national security grounds.

Turnbull, who co-founded Australia’s first major internet service provider, explained the logic behind the move. “If Huawei were to provide your 5G network, or a large portion, does that give Huawei the capability to disrupt large parts of your economy? The answer is yes,” Turnbull told Reuters. “Do you want to give a foreign state whose attitude to you may not always be benign the capability to inflict harm? The answer is no.”

Mike Burgess, then the head of the nation’s technology intelligence agency, the Australian Signals Directorate, had advised Turnbull that the technology risk posed by Huawei couldn’t be mitigated, Turnbull said. Burgess previously had worked at the defense intelligence base Pine Gap, a top secret U.S. satellite tracking and missile launch detection station in the Australian desert. Burgess declined to comment.

…One of the officials engaged with London over Huawei was Andrew Shearer, who moved from the Office of National Intelligence to be Morrison’s cabinet secretary last year. He has become a powerful voice on China policy in the prime minister’s inner circle and has urged closer engagement with Japan and India, government sources told Reuters. In June, Australia sealed a strategic partnership with India that granted the two countries access to each other’s military bases and allowed for Australia to provide India with rare earths, metals that are crucial to defense and space programs.

Shearer worked in Washington at the Center for Strategic and International Studies (CSIS), an influential defense and security think tank, between 2016 and 2018. It was a time when attitudes towards Beijing were hardening among U.S. Republicans and Democrats, said CSIS senior vice president for Asia, Michael Green. Appearing before the U.S. House Committee on Armed Services in 2017, Shearer told members China was intent on undermining the liberal world order and the institutions that underpinned it.

Shearer worked on issues including China’s “gray zone” interference in the East and South China Seas – aggressive moves that stopped short of war, such as erecting and fortifying artificial islands. “We were looking for ways to harness alliances and partnerships to deter Beijing from escalating further,” said Green, who formerly served on the U.S. National Security Council.

That thinking was evident in Morrison’s recent announcement that Australia will boost defense spending by 40% over the next decade. Morrison said his defense strategy would bolster Australia’s ability to respond to “operations in the ‘gray zone’ – falling below the threshold of traditional armed conflict.”

…The sharpest public criticism of China has come from a bipartisan group of parliamentarians who call themselves the Wolverines, inspired by a group of teenagers who resist a Soviet invasion in the 1980s movie Red Dawn. The group, none of whom are in the cabinet, coalesced in 2019.

The most prominent Wolverine is former special forces soldier and Liberal Party lawmaker Andrew Hastie, who chairs parliament’s intelligence oversight committee. In August last year, Hastie compared the West’s approach to an authoritarian China to the failure of France to stop the advance of Nazi Germany.


When China threatened economic retaliation over Australia’s call for a coronavirus investigation in April, the phones started ringing in Trade Minister Simon Birmingham’s office as industry heads called to express concern. But publicly, Australian business leaders stayed largely quiet.

Iron ore miners have also been largely restrained, as they continued to ship Australia’s most valuable resource, extracted from the red, dry dirt of the Western Australian Pilbara region, to Chinese steel makers. In June, Australian iron ore shipments hit a record AU$9.9 billion ($7.2 billion), pushing annual exports past AU$100 billion ($73.2 billion) for the first time, as the only rival supplier, Brazil’s Vale, suffered COVID-19 shutdowns.

“China needs our commodities – we do have some of the best iron ore in the world. It does mean Australia comes from a position of strength,” Chamber of Minerals and Energy of Western Australia chief executive Paul Everingham told Reuters. At the same time, he added, the iron ore industry is uncomfortable with the newly “adversarial climate.”

In the wake of the 2018 diplomatic freeze, the national security agency and the ministry of foreign affairs held briefings for executives in industries exposed to China. The executives have been told that complaining would provide ammunition to Beijing for propaganda against the Australian government, said an agriculture industry source. Companies were advised instead to work with Australian officials to comply with the minutiae of Chinese red tape and expose Beijing’s trade retaliation for what it was.

The government also told industry it was seeking alternative markets for Australian goods, had negotiated access to Indonesia, and was in talks with Britain, Europe and India.

The muted response from the business community is in contrast to 2018, when chief executives complained loudly that the Turnbull government’s dispute with China risked damaging trade, and implored him to fly to Beijing to fix it.

“So much of the Australian business community, faced with criticism or a difference of opinion between Australia and China, will side with China,” Turnbull recalls of the situation he faced as prime minister. But, he adds, “there has been an awakening.”

Reuters was not the first. All of this in on the record at MB over the past four years. And there is more, missed by Reuters, most pointedly around the increasing tension in CCP-bought universities.

It’s a very straight forward tale of an imperial power launching a “silent invasion” of Australia. We fought back, just in the nick of time. The CCP spat the dummy as it was beaten back.

The war is not over. Not by any stretch of the imagination. It is yet to even penetrate thick Labor skulls even though it will cost them government forever as far as I can see. So it is especially important that the story so far is told truthfully to prevent the resurgence of treasonous shills.

David Llewellyn-Smith
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  1. SupperannuationMEMBER

    Good piece. Rebuilding the state will hopefully keep Daniel Andrews occupied. He won’t have to get photos in Tiananmen Square in order to feel important.

  2. Nothing but a poor apology (not referring to MB) as to why the gov did nothing about Chinese behaviour, until it suited them.

    “…The economic relationship peaked with the signing of a free trade agreement at the end of 2015 that lowered Chinese tariffs on agriculture, dairy and wine, and promised to open the door for Australian banking and other professional services to China’s restricted market.”

    The above is why they did nothing, the gov was willing to tolerate whatever China did so long as there was an economic advantage for doing so. When that didn’t arrive they changed their minds.

    The financial pork barrelling by Chinese CCP connected interests of our political parties must have been known or both the LNP & Labor are completely stupid. The sudden realisation is nothing but self-interest, they need a distraction and national security is one voters always fall for because we’re a fearful nation, not brave and it didn’t bring them the rewards they expected. If it had we wouldn’t be hearing this today.

  3. Good news. I’m so relieved these issues are finally being taken seriously at the highest levels.

    One thing we need to be aware of: from the Chinese Communist point of view (indeed all Communist-Leninist ideology) this area we referred to as “the grey area short of armed conflict” is war. They have been at war with the west for decades – economic war, narrative war, and now cyber war. They call it war.

  4. TailorTrashMEMBER

    “ we won’t sell our sovereignty “
    “We won’t sell our democracy”
    “We won’t sell our values “
    ”We won’t sell out on who we are “

    But but …We will sell our children’s homes ….and the freedom of speech enjoyed by young Australians in
    Universities for generations

    Let’s hope eventually these areas are addressed
    In the “grey zone “

  5. Does rather skip over Julie Bishop’s Foreign Policy White Paper, over glorious Gladys and invisiblises Clive Hamilton. Skates over the quite distinct turning point. but still a fair account.

  6. And who woulda thought that a big lump of the West selling out industrial production to China for the ideological reason of busting unions and super profits at the top would have come back to bite us. A mass transfer of technology with the bonus of Aussie raw materials and a nice fat conduit to spy on western business and perhaps military secrets. Never mind the misery of obscene house prices thanks to giving Chinese money launderers a free ride.

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