If you feel like getting angry, pop over to the ABC’s live blog on the China trade war starring journalists Stan Grant, Stephen Dziedzic and Bang Xiao as they answer questions from punters.
It is abundantly clear that all three have little China expertise, are brainwashed about “China’s inevitable rise” and spreading the CCP gospel as far and fast as they can. There is no counter-voice to balance the answers.
None of my pointed questions have been answered of course.
Will young Australians be left to deal with the fallout?
Will young Australian’s have to pay in the future the economic costs of a bad relationship with China?
-Cameron
Here’s Stan Grant:
I fear for the world our young people are going to live in. As Scott Morrison out it recently we live in a world that is poorer, more disorderly and more dangerous. I think our age is equivalent to the lead up to World War I. Not that we will repeat it, but similar forces are at play.
There is a rising power in China and a relatively waning power the US just as then there was a rising Germany and waning Great Britain. The world is deeply interconnected as it was then. Germany and Britain were each other’s biggest trade partners.
The weights on the scale tipped the balance to war then and the weights are piling up again today: trade disputes, diplomatic freeze, territorial disputes, rapid militarisation.
Between 1915 and 1945 the world saw war, a flu pandemic, economic collapse, rise of fascism, communism, revolution and war again.
Today we have terrorism, war in many parts of the world, a global financial crisis in 2008, a virus pandemic, a resurgence of authoritarianism and a weakening of democracy.
China sits at the hinge point of this history. How the world responds will determine the fate of our children.
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By Bridget Judd
How are farmers feeling?
I keep saying this will all work out but on our farm this trade relationship seems just another thing after drought, fire, flood and covid!How will it work out?
-NO MORE!!!
Here’s Stephen Dziedzic:
You’re not alone. The ABC has heard from many farmers who have been hit by this dispute and who are very angry and frustrated.
Some blame Beijing, some blame the Federal Government and accuse it of bungling the relationship. Some blame both.
Whatever your view, we hope that you can find a way through this.
By Bridget Judd
What does the dispute mean for Australians living in China?
How does our worsening relationship affect Australians with current or former Chinese citizenship who live and work full time in China? What risks do they and their families face? – Jacob
Here’s Bang Xiao:
China’s economic coercion means Australians who work in the trade sector in China can be more affected by the political tensions than others. With growing concerns about losing our biggest market and customer, the deterioration in Australia-China relations could have a direct impact on their livelihood and future.
They may try to keep themselves away from involving in any public discussions, because they would be worried about the security of their families — and more realistically, their ability to get a visa to keep their life and work running in China.
We have seen Australian journalist Cheng Lei and writer Yang Hengjun being detained and accused of espionage by the Chinese Government. And the expulsion of the ABC and AFR’s China correspondent Bill Birtles and Mike Smith means individual Australians can face safety threats in the country.
However, some Australians in China told us the people-to-people relationships between China and Australia has been “strong” and “positive”, though they are keeping an eye on the situation.
By Bridget Judd
Are both sides just trying to save face?
Has the concept of “saving face” been affecting Chinese-Australian diplomatic relationships and if so, how?
-Z
Here’s Stan Grant:
Saving face is a critical issue. The West does not appreciate the sensitivities of China. Western society has been built on ideas of progress and to a large degree leaving history behind.
Western philosophers talk about a linear movement of history and in 1989 American political scientist Francis Fukuyama wrote an influential essay that saw the the fall of the Berlin Wall as “the end of history”, that western liberal democracy had triumphed over Soviet communism.
The Chinese were lectured that they were on the wrong side of history.
We get into tricky water when we imagine that western values are universal, China rejects that. It believes its model of authoritarian capitalism is superior.
China also has long memories of the humiliation and domination by foreign powers. It portrays criticism by countries like Australia of China’s human rights record, for instance, as another example of western humiliation.
How do we legitimately criticise China or challenge China on issues of human rights and values without antagonising? That is the critical question.
By Bridget Judd
How is the rest of the world responding?
How are other countries reacting to the current tensions between Australia and China? Are there sides being taken at international levels, particularly within the Pacific nations?
Here’s Stephen Dziedzic:
Australia has only received public support from Western nations so far. Unsurprisingly, the United States has been the most vocal critic of China’s actions — although the public response from the incoming Biden Administration was less forceful than some in Canberra expected.
Several other countries, including New Zealand, France, Germany and Britain, have also criticised China’s behaviour — particularly the inflammatory tweet posted by the Chinese foreign affairs Zhao Lijian which kickstarted the most recent Australia-China dispute.
But most other countries (including Pacific Island nations) have remained silent.
By Bridget Judd
Where does the US fit into all of this?
AP
You can not have a sensible discussion about China without taking into account the American empire.
-Bev coates
Here’s Bang Xiao:
It’s a great question Bev! Both Beijing and Washington consider each other as a political threat. In the CCP’s propaganda, the US has been described as a bully on China’s internal stability, and a blackhand behind the conflict in Xinjiang, Hong Kong and Taiwan.
But bringing the US to the discussion can be a double-edged sword. It gives contexts for the debate between two global superpowers in our times, but helps Beijing’s narrative to legitimise its suppressive treatment of its own people and raise nationalism. It is one of the most difficult parts of the discussion about China.
Stan Grant has also weighed in:
America has been the dominant power since World War II albeit locked in a Cold War with the Soviet Union. It wrote the rules of a global order that assisted China’s rise. It was an American president Richard Nixon who travelled to Beijing in 1972 to meet chairman Mao Zedong and assist a rapprochement that in time brought China back into the world.
For much of the past 50 years there has been an attitude of cooperation. That era is over.
The rivalry between the US and China will define this century and handled poorly could lead to greater conflict. America is no longer the sole global power. But we don’t yet live in a post-American world either — it is still the biggest economy and most powerful military but it has been drained by decades of crisis and conflict.
It is a deeply divided society that no longer carries the same global prestige. We are all readjusting to this new global reality.
By Bridget Judd
Why have China and the CCP become interchangeable?
Why do western democracies, and their institutions, continue to refer to China and the CCP as one and the same? China’s people and culture, including the Chinese diaspora, are not the CCP, yet we continue to equate China to the CCP. Why don’t we drop the use of “China” and put the party first? China is not the CCP, and the CCP is not China!
Here’s Bang Xiao:
I could totally understand this! It has been one of my biggest concerns around the rise of China on the world stage. Mixing China, Chinese Communist Party, and Chinese people is unwise, but a common practice in the West. It is common sense that delicious Chinese food isn’t part of Beijing’s regime. When it comes to Chinese citizens and people of Chinese heritage, the distinctions are often ignored. Fortunately, we have seen a growing number of our politicians trying to tell differences between these concepts.
However, the confusion comes from the CCP’s narrative too. The party has been making a conceptual shift between these terms in its nationalism propaganda. By doing this, some Chinese people may believe criticisms about the party are also targeting Chinese citizens and diaspora.
One of the great examples is that China’s deputy head of mission, Wang Xining, describes Canberra’s focus on determining the origins of the coronavirus “hurts the feelings of the Chinese people”. There is no doubt that some Chinese citizens feel hostility, but the diversity of Chinese people means Canberra’s call can gain some support too. We just didn’t find it being represented.
By Bridget Judd
What’s the end game?
AP
What does China want? What is their preferred outcome from this spat?
-Tom Ho
Here’s Stan Grant:
China wants respect. For much of the last three thousand years China was the great power of the world and the largest economy. The past two hundred years are an aberration. The fall of the Qing empire was the start of what China sees as the great humiliation by foreign powers.
Now it wants to be seen as an indispensable nation.
China has a point: the so-called global order was created by the West and the major global institutions are dominated by the West. For instance only a European can head the International Monetary Fund and only an American can be president of the World Bank.
China is setting up rival institutions like the Asia Infrastructure Investment Bank and the Belt and Road initiative to counter what it sees as a Western institutional bias.
The problem is China does not share liberal values and that creates a crisis in the order.
By Bridget Judd
Can we just stop trading iron ore?
Reuters
Can the Chinese economy do without Australia? Without trade with China, Australia would be dealt a pretty hefty blow–but is the reverse as bad for China? It just seems like they’re playing a risky game, especially during a global pandemic.
-Kas
Can Australia just stop trading Iron with China until such time as the other trade disputes are resolved? As much as it would hurt our economy I think it would hurt China more
-Iron Mind
Here’s Stephen Dziedzic:
There is really only one Australian export which China really needs, and that’s iron ore.* More than 60 per cent of China’s iron ore imports come from Australia and its other major supplier — Brazil — is in a world of trouble because of COVID-19 in its mines and a tailing dam collapse. So if we suddenly stopped sending them iron ore, many of their larger steel mills would probably stop operating. That would deliver a substantial blow to China’s economy.
But there’s no way Australia would do that because we’d lose a market worth tens of billions of dollars. That would be a hammer blow to our economy, which is only just starting to emerge from the coronavirus crisis.
Earlier this year the Nationals Leader Michael McCormack declared “we need China as much as China needs us” but unfortunately that’s probably not true. The brutal reality is we simply do need China, more than they need us. This doesn’t mean we should just fold to Beijing’s demands of course. But they hold more cards than we do.
*Australian coal is also quite important and there are another one or two which are quite crucial to supply chains but that’s a more complicated story
By Bridget Judd
What’s happening with the WTO?
If Australia takes these disputes with China to the WTO, how might all this play out for Australia and China? If the WTO cannot really enforce its rules, what kind of results might we see?
Here’s Stan Grant:
China joining the WTO was a pivotal moment for the world. A communist country was embracing the rules of global capitalism. China has undergone an economic revolution in the past four decades that has lifted more than half a billion people out of poverty. It is now the biggest engine of economic growth surpassing the US and is on track to be the biggest economy in the world within a decade.
Big powers play big power games. Just as the US has manipulated the global order – that it designed and dominated – to suit its interests so China has manipulated trade rules to favour its economy. It artificially kept its currency low to gain a trade advantage. Its cheap labour costs helped make it the factory of the world and took jobs from other countries. Its Belt and Road Initiative seeks to export Chinese power and wealth.
But many countries have benefited and have negotiated deals that may flout WTO rules to strike better trade relationships with China. China has actually used the WTO mechanisms for greater leverage.
The WTO is meant to be an umpire but it is often more productive to try to build stronger bilateral ties with China rather than pursue multilateral solutions. It is a reality of our complicated world.
By Bridget Judd
What is China trying to achieve?
What is China trying to achieve? Are they just annoyed Australia is supporting an investigation into the origins of COVID 19 that I understand is happening soon? Does China want us to back down from this stance? Is there a long game China is playing for added influence in the pacific region? I’m just confused about the motivations.
-Andrew K
Here’s Stephen Dziedzic:
That’s a great question. Identifying motives can be tricky. There are lots of plausible answers. Take a quick look at China’s list of “14 grievances” if you want to see their public rationale. And there is no doubt that Australia’s call for an investigation into COVID-19 was a real red flag.
But one theory is that China is not really trying to change Australia’s behaviour, or force Canberra to make concessions. Their real audience is international.
Beijing is sending a clear message to other countries: if you challenge us directly, there will be severe economic consequences. And they hope this message will shape the behaviour of other states, particularly in Asia.
By Bridget Judd
Does China believe its own propaganda?
Why do Chinese officials tell so many lies? Do they actually believe their own propaganda?
-Gary
Here’s Bang Xiao:
These are my favorite questions so far! Just to be fair, lies and politics can be a natural fit in many countries. But the authoritarian political system and the massive censorship and self-censorship in media and academia made the cost of a lie from Chinese officials far less than others in a democratic country.
Do they believe their own propaganda? Yes or no. There are certain nuances in the system where some members don’t agree with Xi Jinping’s propaganda.
However, speaking out the doubts may result in harsh punishment on dissidents and their families. That might be why we haven’t seen many officials make the choice.
By Bridget Judd
Should Australia be playing hardball?
Reuters
The USA has been taking a much stronger approach towards China which seems to be more successful than the Australian ‘Lets wait and see approach’ Should Australia be playing more hardball? After all we have a country full of resources and it is VITAL to show leadership and strength to a country like China I believe ?
Here’s international analyst Stan Grant:
In 2017 the United States declared China a “strategic competitor”. It listed China followed by Russia as its greatest security and strategic threats. It marked a change in posture for the US — until then it had been in a relationship of cooperation.
Since then we have seen an escalation in tension. China has doubled down on its territorial claims particularly in the South China Sea, outlawed dissent and locked up dissidents. Under Xi Jinping China has taken a more authoritarian turn. China and US have engaged in a trade war that can be interpreted as part of a broader Cold War.
This is no longer a unipolar world, American power is not uncontested. We have returned to an era of great power politics.
Where does this leave Australia? The first thing to say is Australia is not a great power. We are dependent on both America and China for different reasons. The world has changed we are misguided if we don’t recognise this.
We need a diplomatic strategy for a new age: strong alliances with our friends that defend and strengthen our values and a pragmatic approach to a big power in China that does not share those values.
It is not weakness or appeasement, it is thinking smarter and having a more realist approach to the world.
By Bridget Judd
Can we survive without China as a trading partner?
Does Australia have any possible way of reshaping its export model to thrive without China as a dominate market? – Anonymous
Does Australia need China as a major economic partner moving forward? Would investing in Australian manufacturing help to offset any overreliance on one trade partner?
-Josh
Here’s Stephen Dziedzic:
Not really. At least not for many years. In the short term, China’s sheer size and wealth means it cannot be quickly or easily replaced.
In 2018-19 Australian exports to China were worth $153 billion. That is about the same as our next five largest export markets – Japan, South Korea, the US, India and NZ – combined.
One economist estimates that Australia has no realistic alternative to China for about one-third of its exports, and no viable source (other than China) for about a fifth of all exports.
The best example of this is Australia’s iron ore exports to China, which are worth around $60 billion a year. The total global market outside China is only *half* what we already send there. So if China didn’t buy it Australia would have nowhere else to go.
On the plus side, China badly needs Australian iron ore — which might explain why the Government is confident it won’t be targeted.
By Bridget Judd
What’s happening with the South China Sea?
One member of the audience asked:
Is the trade conflict between Australia and China driven by a territorial claim for natural gas fields in the South China Sea?
Here’s the ABC’s Bang Xiao:
Apparently, there are many factors behind the trade tensions between the two countries.
Long story short, Beijing views the territorial dispute in the South China Sea as an internal affair of China’s sovereignty, as well as its moves in Xinjiang and Hong Kong.
Canberra’s stances on these disputes and its call for an independent inquiry into the origins of COVID-19 are apparently opposed to Beijing’s will. As a result, we have seen the unprecedented tariffs and trade conflicts this year.
By Bridget Judd
Why aren’t we enforcing our own trade restrictions?
The questions are coming in thick and fast, so we’ll start with a few from our early birds to kick things off.
Why is the trade spat a one way street? Reciprocal tariffs on Chinese imports would help our local manufacturers – Anonymous
Foreign affairs reporter Stephen Dziedzic has been following the relationship between Canberra and Beijing closely. Here’s what he had to say:
I asked someone in the Government the very same question a few days ago. They said “we don’t want to get in the sandpit with China and start flinging stuff about”.
In other words: we don’t want to play dirty. If we were to hit Chinese imports with tariffs for no valid reason then our moral authority would be shredded. Our appeals to China to play by the rules would ring very hollow and any global support we’ve gathered would fade away.
Plus it would likely just draw further economic punishment from the Chinese Government. And this is probably a good time to repeat an obvious point: China’s capacity to inflict economic pain on us is *much* greater than our capacity to inflict economic pain on China.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
