Post by NFA on Sept 1, 2021 21:42:28 GMT 8
How China Overreached in Australia
John Lee, Senior Fellow. August 29, 2021
...
Chinese economic punishment of Australia is increasingly driven by rage and resentment. But it is also pernicious statecraft for a Communist Party able to force domestic institutions, media, firms, and citizens to respond to its demands. The point of economic coercion is not to cripple the entire Australian economy, as this is beyond the powers of the Communist Party, but to heighten national anxiety and encourage political, business, and community entities and prominent individuals to criticize the government’s management of relations with China. The ultimate objective, as the Fourteen Grievances makes clear, is to compel the government to change its policies.
The brutal nature of international politics suggests that the proverbial David rarely prevails over Goliath. Yet, the Australian case study should warm American hearts. There is a strong case that China has overreached and that smaller but successful democracies have far more agency and options than is widely appreciated.
First, the national conversation about the menace of the Chinese Communist Party in the region and on Australian soil did not frighten the country into submission. On the contrary, it has convinced growing numbers of political, business, and community stakeholders that the cost of doing nothing and allowing the Chinese Communist Party free rein is too great. This is evident in all surveys and anecdotal encounters with Australians who are increasingly critical of Beijing. This increases Australian political and psychological preparedness to absorb pain and disruption, making it harder for Beijing to achieve its objectives through economic coercion.
Second, necessity is the mother of invention. The imposition of economic punishments has forced Australia to reassess its economic relationships and markets—something which might have occurred naturally but over many years and decades. The Chinese restrictions and bans are fast-tracking the exploration of alternative markets and economic partners, including with largely untapped economies such as India and older partners such as the United Kingdom and the European Union. It may be that the Chinese market was a once-in-a-lifetime boon for the local economy. But Australian businesses are more serious about looking to other markets than has been the case for the past three decades. Events have given a shot in the arm to hitherto drifting national conversations about necessary reforms to invigorate manufacturing and the development of new technologies.
Nor is this all. Chinese actions are forcing the country to give greater thought to reimagining economic globalization. This includes the importance of secure supply chains and greater emphasis on the importance of trust between economic partners—which will only tend to occur when they have similar interests and institutions. This is leading to better alignment between strategic and economic interests. All are part of a broader conversation about national economic resilience which was long overdue. Other democracies are thinking about similar issues but the economic pressure being heaped on Australia is causing the latter to think and act more rapidly.
Third, the fact that Australia has not been brought to its knees by its largest trading partner has a powerful demonstration effect for other democracies, something which Beijing was desperate to prevent. It is important to remember that it is not just a balance of power which matters in international politics but a balance of resolve. Beijing’s overreach and Canberra’s pluckiness have been significant in this respect. We might still be some time away from the Five Eyes countries adopting a collective economic security measure analogous to the North Atlantic Treaty’s Article V. This would be an agreement such that any economic coercive measures levied against one member demand a collective economic and diplomatic response. But the fact that the Biden administration made it clear to China in March that ending the punishments against Australia is a precondition for improved relations with America demonstrates collective resolve amongst allies is deepening. Indeed, a g7 joint statement in June of this year took the unusual step of directly criticizing Chinese actions, including its coercive non-market economic policies.
It is likely there will be further pain for Australia and future punishments applied to other allies with the temerity to pursue policies contrary to Chinese interests. It is also clear America and its allies are in for a long struggle against a Chinese state willing to use all tools of national power for its advantage. One is reminded of the quote, possibly apocryphal, attributed to Lenin: You probe with bayonets. If you find mush, you push. If you find steel, you withdraw. Beijing may not withdraw, but it is being reminded that it is in a struggle—and increasingly outnumbered.
The brutal nature of international politics suggests that the proverbial David rarely prevails over Goliath. Yet, the Australian case study should warm American hearts. There is a strong case that China has overreached and that smaller but successful democracies have far more agency and options than is widely appreciated.
First, the national conversation about the menace of the Chinese Communist Party in the region and on Australian soil did not frighten the country into submission. On the contrary, it has convinced growing numbers of political, business, and community stakeholders that the cost of doing nothing and allowing the Chinese Communist Party free rein is too great. This is evident in all surveys and anecdotal encounters with Australians who are increasingly critical of Beijing. This increases Australian political and psychological preparedness to absorb pain and disruption, making it harder for Beijing to achieve its objectives through economic coercion.
Second, necessity is the mother of invention. The imposition of economic punishments has forced Australia to reassess its economic relationships and markets—something which might have occurred naturally but over many years and decades. The Chinese restrictions and bans are fast-tracking the exploration of alternative markets and economic partners, including with largely untapped economies such as India and older partners such as the United Kingdom and the European Union. It may be that the Chinese market was a once-in-a-lifetime boon for the local economy. But Australian businesses are more serious about looking to other markets than has been the case for the past three decades. Events have given a shot in the arm to hitherto drifting national conversations about necessary reforms to invigorate manufacturing and the development of new technologies.
Nor is this all. Chinese actions are forcing the country to give greater thought to reimagining economic globalization. This includes the importance of secure supply chains and greater emphasis on the importance of trust between economic partners—which will only tend to occur when they have similar interests and institutions. This is leading to better alignment between strategic and economic interests. All are part of a broader conversation about national economic resilience which was long overdue. Other democracies are thinking about similar issues but the economic pressure being heaped on Australia is causing the latter to think and act more rapidly.
Third, the fact that Australia has not been brought to its knees by its largest trading partner has a powerful demonstration effect for other democracies, something which Beijing was desperate to prevent. It is important to remember that it is not just a balance of power which matters in international politics but a balance of resolve. Beijing’s overreach and Canberra’s pluckiness have been significant in this respect. We might still be some time away from the Five Eyes countries adopting a collective economic security measure analogous to the North Atlantic Treaty’s Article V. This would be an agreement such that any economic coercive measures levied against one member demand a collective economic and diplomatic response. But the fact that the Biden administration made it clear to China in March that ending the punishments against Australia is a precondition for improved relations with America demonstrates collective resolve amongst allies is deepening. Indeed, a g7 joint statement in June of this year took the unusual step of directly criticizing Chinese actions, including its coercive non-market economic policies.
It is likely there will be further pain for Australia and future punishments applied to other allies with the temerity to pursue policies contrary to Chinese interests. It is also clear America and its allies are in for a long struggle against a Chinese state willing to use all tools of national power for its advantage. One is reminded of the quote, possibly apocryphal, attributed to Lenin: You probe with bayonets. If you find mush, you push. If you find steel, you withdraw. Beijing may not withdraw, but it is being reminded that it is in a struggle—and increasingly outnumbered.
