Weak Albo begets war with China

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Greg Sheridan wrote a nice piece on the weekend:

Anthony Albanese’s meeting with Xi Jinping at the G20 summit in Bali, the first between Australian and Chinese leaders in six years, will burn itself into the history books.

It is nonetheless being wildly misinterpreted by many of its friends and many of Albanese’s ­admirers.

It’s just as significant as they claim and reflects great credit on Albanese. But it’s not significant in the way they say.

…Geoff Raby, a former Australian ambassador to Beijing, leads the misinterpretation of the Albanese meeting. Raby is reliably pro-Beijing in most, not all, contexts. In his misinterpretation, the main problem in China relations was the unreasonableness of the Morrison government and all Australian governments over the past decade. The softer tone of the new Albanese government was thus all that was needed for benevolent Beijing to forgive us our sins.

Jennifer Westacott of the Business Council of Australia, normally an immensely sensible and thoughtful business leader, was ­seriously ill-advised to describe the meeting as “ a tremendous reset” of the relationship.

This was a week of momentous change and activity in geo-strategic issues, but let’s stay focused on the Albanese/Xi meeting. It’s wrong to see it in isolation, or even to imagine that Australian statecraft was primarily responsible for bringing it about.

…The Quad, AUKUS, and the Japanese Joint Security Declaration are good in themselves and well considered. Beijing despises them, absolutely despises them. They contradict in spirit and substance, in letter and intent, every element of contemporary Chinese strategic policy. Beijing has denounced all three. That is what makes Albanese’s achievement so historic and singular

…Thus, the Albanese government has given away absolutely nothing to Beijing. Indeed, it has continued on policy paths which Beijing hates. It has added new policies which Beijing also hates – such as the Security Declaration with Japan and the promise of increased military capability. Yet it’s seen relations with China restored to functional normality. That’s the real significance of the Xi/Albanese summit. That’s why it’s historic. It’s an example supremely of Australia holding its strategic nerve across both sides of politics and several electoral cycles.

…For a guide to Canberra’s strategic standing, take Mike Green, CEO of the US Studies Centre at Sydney University. Green is the pre-eminent American authority on Asian strategic policy. He was the Asia director in George W. Bush’s National Security Council, and is the author of definitive books on Asian geo-strategic policy.

I have known him for many years. He is hard-headed and weighs his words carefully. Here is his crucial judgment: “I cannot think of an Australian government that has had a stronger series of successes at the outset. This comes in part from strategic continuity. The new government did not fundamentally change the strategic pillars of Australian policy. This was very reassuring to Australia’s partners.”

We did give something away. Something very important. Perhaps the greatest asset of all in preventing a war with China. Albo has allowed the CCP to put its friendly mask back on.

This is a shift in the normatives that govern soft power relationships. That is why the China grovellers are crowing about business as usual, and it is why lots of interests will now deepen engagement with China again, sending Beijing entirely the wrong message.

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Consider, there are three possible outcomes ahead for China in the Asian region.

  1. It displaces the US as hegemon.
  2. It is locked in a permanent contest with the US over who is hegemon.
  3. It fails to displace the US as hegemon and is contained.

Of these, the last is by far the most preferable for a liberal region and world. It means that the Chinese people, not everybody else, will have to confront their own misbegotten ruling regime, the CCP.

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There are only two ways to fight this war. We do it economically. Or we do it literally.

The next major turning point in the struggle is Taiwan. Nobody sane wants a hot war. Taiwan will be leveled. The US and its allies will probably lose. The region will be economically and politically sundered.

But the CCP is insane and does want war. Its tyrant will benefit from the conflict at home. The key domestic pillar of CCP political legitimacy – economic growth and prosperity – is already crumbling. It needs nationalism to replace it.

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This is the key calculation that is being missed. The CCP exists for its own ends, not those of China.

Thus, the wonderful outcome of Beijing dropping its friendly mask was that its true character became clear to all. Now, with it fitted back on, everybody can return to pretending that the CCP isn’t evil. To wit, Europe:

President Xi Jinping started his week overseas mending ties with the US, and ended it with European leaders making the case for resisting the Biden administration’s sweeping chip curbs on China.

The shift in sentiment amounts to a victory for Xi on just his second foray outside of China since the pandemic began — a span that had seen Beijing’s relations with the US and its allies go from bad to worse. In October, President Joe Biden restricted the sale of semiconductors and chipmaking equipment to China in a bid to stem its economic development, and asked key allies to comply — raising fears of a split in the global economy.

On Friday, French President Emmanuel Macron called for engagement with Beijing and resisting efforts to divide the world into competing blocs. That followed similar appeals from German Chancellor Olaf Scholz, who visited China earlier this month, and efforts by Dutch Prime Minister Mark Rutte to coordinate with other key chipmaking nations in resisting US pressure.

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Europe is probably kowtowing in return for the Beijing hosing off Vladimir Putin’s hints of nuclear war. But it is also kicking the economic can. Germany especially is economically dependent upon China and it will become more so (apparently, it hasn’t learned a thing from kowtowing to Russia).

In short, while the CCP acted out its true character on the world stage, there was a growing hope of avoiding a Taiwan war. Western unity on Russian sanctions and, more recently, very negative market reactions to the ascension of the tyrant, made clear to the CCP that the price of war over Taiwan is that China will be booted out of the global economy.

That is not something that the CCP could survive at home. At least, not without a major conflict with its own people that would shrink it from the world stage.

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But, now, with the tyrant slipping back behind the friendly mask, and free again to buy western elites, that warning will diminish, making war over Taiwan more likely.

Far from giving nothing away, a weak Albo is squandering our greatest hope for a peaceful century.

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.