For Australia, a country that had enjoyed considerable economic success for around thirty years by developed nation standards, a major policy dilemma is how to address the growing tension between the United States of America (US) and China given that the latter has become increasingly important to Australia’s economic fortunes.
With considerable debate in recent years about China’s interference in Australia’s affairs, which led the government to pass new foreign interference laws in June 2018, the 2019 Lowy Institute Poll (2130 respondents) found that 74% believed Australia is now too economically dependent on China, 68 per cent though too much investment came from China, 73 per cent urged measures to counter Chinese influence, 77 per cent believed Australia should do more to resist China’s military activities in the region, 60 per cent backed the navy to do freedom of navigation exercises in the contested South China Sea, and 55 per cent agreed that a Chinese military basin in the Paciﬁc would be a ‘‘critical threat’’ to the national interest.
But with 72 per cent still supporting the US alliance as important for Australia’s security with 73% agreeing that the US alliance is a natural extension of our shared values and ideals, balancing security and economic needs may get a lot harder.
After all, resources do matter in terms of Australia’s ability to meet its various policy needs (including social welfare) and China received 30.6% ($117.5 billion) of Australian exports during 2017-18, Chinese tourist spending comprising over a quarter of the tourist market ($11.3 billion), and 170,547 Chinese students were enrolled in Australia’s various education sectors from January to June 2017, by far the highest proportion of the total 583,243 international students.
In the end, however, the US, which does call upon Australia for assistance to help uphold the international rules-based system in the Asia-Pacific, no longer accepts the ongoing rise of authoritarian China.
With “Made in China 2025 initiatives now intended to make China a major global player in 10 key manufacturing sectors, after China’s share of global merchandise exports increased from 2.0% in 1990 to 14.1% by 2015 (13.2% in 2017), the Trump Administration from 2017 increased tariff barriers on Chinese imports on the basis that a Section 301 inquiry gave the president power to retaliate against certain unfair trade practices that are “harmful to U.S. economic interests”.
The Section 301 inquiry found strong evidence that the Chinese government has violated trade agreements, hacked US computer systems to benefit Chinese companies, routinely pressured US companies to enter into joint ventures with Chinese partners that required sharing valuable technology, and used state funds to purchase US companies to get their patents and other intellectual property.
Any hope that US policy will soften towards China with the demise of President Trump is also unlikely given that anti-China sentiment also exists within the Democratic Party given longstanding concerns about Chinese practices with regard to trade, foreign-policy, and human rights.
During 2019, Democrat Senator Elizabeth Warren declared China had “weaponized its economy”, Senator Cory Booker called the Chinese government a “totalitarian regime” that has been “taking advantage of this country”, and Senator Chuck Schumer tweeted “Hang tough on China, President@realDonaldTrump. Don’t back down.”
For most Australians, who have little knowledge or interest in the US state of domestic affairs, mostly focusing on their own well-being and local issues, they too are now confronted by an age-old problem that confronts many nations with regard to how best to balance strategic and economic needs.
This dilemma was evident in the Lowy institute poll. Despite just 32% now trusting China to ‘act responsibly in the world’ compared to 52% trust for the US, only 50% believed that ‘the Australian government should put a higher priority on maintaining strong relations with the US compared to 44% for China, even if this harmed relations with the other major power.
But, I for one support the US’s opposition to China. Not to curtail the right of China to prosper, but to ensure that the current global order withstands the negative influence of nations with authoritarian tendencies.
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