There appears to be a new strategy afoot for Australia’s heretical strategic mind and CCP enthusiast, Hugh White.
Having comprehensively lost the policy debate over his black fantasy of endless Chinese growth, inevitable war around Taiwan, the crushing of the US and its comprehensive withdrawal for Asia, he has turned to the international press to humiliate Australia instead.
A few weeks ago, as ScoMo was headed for Tokyo, White took the opportunity to salt the earth in the Nikkei before ScoMo’s arrival:
Australia today is facing the most severe threat to its economic future in many decades, as Beijing applies an ever-growing range of restrictions on Australia’s exports to the world’s fastest-growing major economy.
…The problem for Canberra is that China holds most of the cards. Power in international relations lies with the country that can impose high costs on another country at a low cost to itself. This is what China can do to Australia, but Scott Morrison and his colleagues do not seem to understand that. They seem to have assumed that China will sooner or later change its mind and back off. At least that is what Morrison suggested in public, when he told Australians that they just needed to be patient and the problems with China would pass.
He has shown no sign of stepping back from his forthright, not to say provocative, statements and polices. On the contrary, almost every week sees new concerns aired about China and new measures announced in response. It is still not clear that the government in Canberra understands just how serious the threat has now become to Australia’s future prosperity. And he has no short-term political worries, because while some business groups are now starting to speak out, the weight of press commentary and public opinion are happy to rally behind the government as it stands up to China’s bullying.
Morrison has pandered to these emotions by saying that Australia cannot possibly resile from the positions he has taken because to do so would compromise Australia’s sovereignty and betray its interests and values. That kind of talk is designed to close down debate by painting dissenters as disloyal, but it misunderstands the nature of sovereignty and underestimates the complex array of competing interests and values that Australia must balance as it adjusts to the new power realities in Asia.
Blah, blah, Hugh. It’s called democracy, mate. That raucous and unruly beast that thrashes out its policy debates in public. There is no shortage of paid China apologists galavanting around the place putting forward its views. Believe me, I know, I have to dismantle their half-baked arguments all day.
And that debate has now wonderfully flushed out what is at stake. That is democracy or, rather the end of it, as China’s list of 14 demands made clear.
So, with the raucous Australian debate largely having dismissed Hugh White’s absurd demand that we end democracy, he’s headed offshore again to force-feed his bitter pill to everyone else. This time at The Economist:
It is the oldest move in the Communist Party’s playbook: to lock a country in the doghouse when it has offended the cosmic order. Yet even by China’s standards, the 14 grievances presented to the government of Australia this month are striking in scope and animosity.
The charges include speaking out against Chinese activities in the South China Sea, Xinjiang and Hong Kong; excluding Huawei from 5g telecoms networks; calling for an independent inquiry into the origins of covid-19; passing a law against foreign interference in politics; pressing the state of Victoria to end its involvement in President Xi Jinping’s flagship infrastructure initiative; blaming cyber-attacks on China; and accusing Chinese journalists of being state agents. China also griped about Australia’s hostile media and think-tanks. Make China the enemy, a Chinese official told an Australian broadcaster, and “China will be the enemy”.
The hypocrisy is breathtaking. China severely limits foreign investment, expels foreign journalists, takes innocent people hostage as a diplomatic weapon and routinely interferes in other countries’ politics. As Richard McGregor of the Lowy Institute in Sydney puts it, any provincial boss in China who tried to run a freelance foreign policy in the manner of the Victorian government would never be heard of again.
Meanwhile, China has all but shed any legal pretence for blocking Australian imports. Yet complaining gets Australia nowhere. Coal-carriers are anchored off the Chinese coast, unable to land their cargoes. Australian wine sits stranded on the quay in Hong Kong. For decades Chinese demand has stoked Australian prosperity. In just weeks China has raised obstacles to 13 products which generate over a third of Australia’s total exports to China. Barley, sugar, timber, lobsters and copper ore have all been banned. Wheat is next. Two biggies, iron ore and lng, have been spared, but presumably only because it is hard to find alternatives quickly.
Could Australia have avoided the doghouse? From cyber-attacks to influencing elections, China poses a threat, and the prime minister, Scott Morrison, insists Australia’s sovereignty is non-negotiable. Yet members of his own Liberal Party as well as the opposition Labor Party think the government’s handling of China has, in the words of Allan Behm of the Australia Institute, been “cack-handed and lacking nuance”. Why, in August, block the Chinese purchase of (Japanese-owned) Lion, a big dairy and drinks company, when the foreign-investment board had already given the nod? And calling alone for a covid-19 inquiry instead of with other countries was inviting Chinese spleen.
Hawkish dynamics within his party are one reason why Mr Morrison has, as Hugh White of the Australian National University puts it, “gone out of his way to poke China in the eye”. One group of mps, sporting claw-mark stickers on their office windows, calls itself the Wolverines, in homage to trigger-happy American teenagers resisting a Soviet invasion in a cult 1980s film. A member, Senator Eric Abetz, says its anti-China stand is about calling out barbarism: “That’s the Australian ethic—we call a spade a spade.” Yet the antics of members (who include Labor mps) are “immature, juvenile and destructive”, a foreign-policy expert, Allan Gyngell, recently warned. At one parliamentary hearing Mr Abetz called on Chinese-Australians to denounce the Communist Party.
Still, wariness of China is no longer a fringe activity. In two years the number of Australians who trust China to “act responsibly in the world” has plunged from 52% to 23%, according to the Lowy Institute. In this context, Mr Morrison’s talk of sovereignty, Mr White argues, has a primal appeal: plucky Oz standing up to a bully. But as American power ebbs and Chinese power is in flood, Australians, Mr White contends, “have no conception of how to make [their] way”.
The lack of plan, says John Hewson, a former Liberal leader, is all too evident in the government’s handling of China. The prime minister needs to get out of the fix without appearing to back down. The small businesses suffering from China’s boycott are his party’s natural constituency. The departure of President Donald Trump may help: Mr Morrison got special bile from China for hewing close to him. But the gap he needs to close is wide. Six years ago Mr Xi addressed Parliament in Canberra. Today the Australian government cannot even get a phone call answered. Welcome, China seems to be saying, to the new order.
I rest my case. Plenty of CCP apologists still out there. We do not need to back down. So what if we lose some trade to China? 40% of it is iron ore that is safe. Most of our commodities will go out anyway to other markets. We’re long overdue a correction for international students and immigration. And if the damage proves material at the macro level then the AUD will fall we’ll make it up elsewhere over time.
As well, it is abundantly clear that China has launched a new wolf warrior approach to economic relations in its exaltation of “Xi Jinping thought” that is going to land on everyone. Australia is neither the first nor will it be the last. Japan, Korea, Norway, Canada and India are all wrestling with similar. All democracies will need to come together to fight it in due course. Certainly, being divided and conquered, which has already happened to poor Hugh White, is no answer.
Where we can be highly critical of the Morrison Government is in its policy to offset the Chinese decoupling and beyond it. On that front, it has done next-to-nothing. Via The Australian:
The benefits to Australia of China’s economic rise have masked Australia’s reform sclerosis. With taxation rivers coming from commodity exports, Australia’s political leaders have been absolved from making difficult decisions because our standard of living has continued to improve and our economy has continued to grow. This despite our ageing population and declining education outcomes.
Sadly, all of the policy to best ease Australia’s Chinese decoupling adjustment is on the Labor side of politics:
- taxation reform to reduce housing misallocation of capital;
- productivity reforms en masse;
- industry policy;
- energy price and security reform;
- competitiveness and innovation reform.
So on and so forth. But Labor is captured by the CCP so is a complete political non-starter, contrary to Hugh White’s sub-altern hopes.
That does raise the risk of a post-China trade adjustment as its students and tourists never return but even that will be manageable with the Australian dollar playing a key role.
This is where the intellectual feebleness of Hugh Whites’ bleak outlook really bites. China has essentially launched a trial program to crush democracy worldwide using economic coercion. We can accept this bribe and bluff if we want. But there’s no reason why we have to. There is nothing inevitable about China’s rise. Its economy is exiting its high growth development phase not entering it and the middle-income trap clearly yawns ahead as it can’t shake its capital misallocation habit. Its soft power has collapsed post-COVID. Its hard power is growing, especially pertaining to Taiwan, but this is directly proportional to the decline underway in its economy as the CCP seeks to redefine its social contract with the Chinese people from one promising prosperity to one marshaling nationalist sentiment.
It’s not inexorable it’s paradoxical. China will get more assertive abroad as its economy bogs down at home. This will look like rising power when it is actually an emerging power losing its catch-up advantage.
Nor is the US in any hurry to withdraw from Asia. Not even the Trump Administration really mooted such. It pressured allies to pay some more for protection. What’s the upside for the US in trading off its missiles parked all around China for Chinese missiles parked all around it?
There are conflicts ahead. Freedom of navigation, tech, trade, Taiwan and proxy wars will all be in the contest. It will be a mess. So be it. The world is always such.
Hugh White’s alternative, of giving up freedom for a few yuan more, is the bizarre figment of a mind already overthrown by CCP talking points. It’s his right. But we should note that blabbering the Beijing point-of-view worldwide only helps isolate Australia and works towards his dark fantasy becoming reality.
