Pascometer redlines on China grovelling

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Weeoo, weeoo, weeoo.

It’s been far too long since the Pascometer last registered a redline moment. Almost so long that some readers will not even be acquainted with one of MB’s former favourite contrarian indicators.

Today the mechanism returns with a vengeance to redline on a subject for which it has zero expertise: China. To wit:

Nearly all Australians last month missed the most important piece of journalism yet to examine the origins of and motives for Australia’s botched diplomacy with China – it was behind the Australian Financial Review‘s paywall.

The 9000 words spread over three parts were so good the usual China hawks and defence and security industry promoters seem to have run away from it. Sometimes being ignored can be the biggest compliment.

Yet, when a couple of politicians acknowledged one of the core conclusions of the series – that domestic political advantage is now the key driver of our China policy – the knives were quickly out.

The series, starting with How Australia got badly out in front on Chinawas painstakingly researched and written by Max Suich, a former deputy editor of the AFR and editor-in-chief of the Fairfax Sydney papers.

It’s old-school journalism. Multiple trusted and trusting sources sought out and cross-checked over months, in contrast to retailing lines pushed by anonymous individuals and organisations with their own agendas.

…Never mind that there’s a massive disconnect between what the Defence Minister says and what he does. As one of Suich’s sources with deep knowledge of defence policy making said: “If the Morrison government was genuine in its talk about war with China, it would be criminally negligent not to be spending 5 to 6 per cent of GDP on defence. Doubling our 100 strike aircraft. Not waiting till 2030-2040 for submarines.”

Suich divides the devolution of our China policy at the urging of security and intelligence types into three stages: “Push Back” since late 2016 followed by “Call Out” and finally “Out in Front” of our allies and other democratic nations in needling, then confronting China – a policy that became more strident after Scott Morrison took over from Malcolm Turnbull.

Part of what seems to dismay Suich and his sources is that we have fallen into the current mess by misadventure, by negligence, by policy creep.

“There has been a note of the casual, the she’ll-be-right, the scary shoot-from-the-lip, even insouciance, in the development of our China policy over the past four years,” he writes.

“While we dramatically changed our approach, we did not define a policy objective for the new relationship with China or a strategy to achieve it. Nor did we thoroughly review alternative options.

“We elevated anger about Chinese activities in Australia and latent ministerial hostility towards China, turning threadbare slogans into policy.”

…Suich doesn’t quite say it, but I shall: The spook industry has effectively captured Australia’s mainstream media. They have become tools in a dead-end game when the governments of Australia and China cannot concede errors or back down, the arguments on both sides retreating into slogans.

I know Max Suich a bit. He’s a journo of immense talent and integrity. I’ve read his series. At the end of the day, I have two things to say about it (and the Pascometer).

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Just about all of what Max Suich uncovers about policy creep, domestic political drivers for rising hawkishness, manipulated scoops and media by spooks, foreign policy gaffes, poor policy process and lack of planning are 100% right. If you’ve been reading MB over the past four years this will be no surprise to you.

But that is all entirely beside the point. That China has turned openly hostile to the liberal order is also not in question. That it is committing multiple genocides is not in question. That it has destroyed Hong Kong is not in question. That it has plans to do the same to Taiwan is not in question. That it plans to dominate the Indo-Pacific economically, strategically, intellectually and diplomatically is not in question. That its autocratic system has unleashed a plague upon the earth is not in question.

That it undertook a silent invasion of Australia to wedge it from ANZUS and its liberal roots is not in question.

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And this is where Max Suich’s wonderful journalism misses the woods for the trees. The spectacular blundering of the Morrison Government actually worked in favour of the national interest. Our personality disordered PM so bamboozled the CCP that its friendly mask slipped off and exposed the truth of what is underneath. The fourteen conditions to get along with our new CCP overlord are unequivocal:

The takeaway from this extraordinary episode is not that Morrison fucked everything up, which he most assuredly did, but that he accidentally exposed China’s plan for Australia and that it can fuck right off.

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I mean, seriously, is Max Suich, legitimate legend of Aussie journalism, really suggesting that we should embrace the above crushing of press freedom for a few yuan more?

The second point I will make about Max is that he comes from a generation and culture of Asian engagement ideologues. This school of thought predominated especially at ANU. Like Labor greybeards, many of the leading intellects of this school are embedded in the architecture of a vision for a wondrously free and free-trading multilateral Asia. I used to believe in it too.

Well, sorry, to say it, but the vision has collapsed.

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Blaming the Morrison Government for this is preposterous. The forces at play are epochal. China tried to liberalise politically and failed. We tried to help it and almost illiberalised ourselves instead. There is no meeting place between the two systems if the CCP is determined to become an autocratic hegemon.

This is the issue now. The deep and abiding enmity between liberal and illiberal systems. It is a structural divide that is going to sunder the entire global economy in the decades ahead.

Clearly, any pollie with half a brain is going to get on the right side of this (which makes you wonder what is inside Labor pollie’s heads).

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In conclusion, yes Morrison is a foreign policy idiot. Yes, he has no plan. Yes, we are taking on water that we would not have had to if others took the lead. Yes, Morrison is playing domestic politics.

But none of that matters. What does is that we need to divorce China as soon as humanly possible to protect our liberal democratic system for our children. Such a Herculean unraveling of thirty years of painstaking diplomatic and economic engagement was never going to be orderly, nor pretty, nor planned, nor nice.

Nor was it ever going to feel good to those whose vision is being dismantled. But that’s just too damn bad. What matters is it is getting done.

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A redlining Pascometer only underlines how out of step with the emerging reality that Max Suich and his old China guard now is.

Weeoo. Weeoo. Weeoo.

About the author
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.