Australia’s looming cloud: The China challenge

President Xi Jinping’s China has been increasingly pushing its agenda beyond its borders and testing how far it can go to exert its influence within the sovereign borders of its democratic trade partners. This has only led the Chinese Communist Party (CCP) to gradually alienating its counterparts in the highly contested Indo-Pacific region.  

Whether its Beijing’s heightening aggression in the East and South China Seas, its Galawan border stand-off with India, or most recently, its thinly-veiled threats against Australia, China is looking to map the future in Asia and the Pacific. 

In this scenario, Australia has emerged as a global case study in Chinese influence and coercion, and has come into focus as the world looks to see how it will assume the role and responsibility of responding to the calculated Chinese interference in its political activity. 

Sino-Australian Relations: A Time of Friction 

On a macro level, China-Australia relations can be best categorised by advantageous yet asymmetric economic interdependence. China is Australia’s biggest trade partner and consequently, a critical and valuable link for the Australian economy.  

Despite deep economic ties, both states are radically different from each other in terms of culture and political values. Hence, both states have shared a complex relationship fraught with tensions, particularly in recent years. 

For instance, a 2019 New York Times report revealed that the Chinese consul general conducted a meeting with almost 100 Australian residents of Chinese descent to mobilise them to help shape public opinion in the country. This involved reporting any critics to the consulate, holding coordinated rallies in Beijing’s support and masking any images of protests in China. 

The incident is merely one example of Chinese attempts to exert its influence domestic policies and public opinions - whether openly or discreetly - in service of its national interest. 

Australian policymakers are routinely lobbied by Chinese officials in secret and Australian businessmen coerced into acting favourably towards China at the threat of dire economic consequences. Additionally, there have also been reports of the Chinese government suppressing its critics through defamation lawsuits and furthering its agenda through advertisements, financing pro-China research institutes and advancing sympathetic politicians. 

Australia’s move to limit such coercion through legislation was promptly met with ‘punishment’ on the economic front. Major trade deals stalled and Australian exports and imports suffered from delays. More recently, as tensions peaked between the two states, China imposed a whopping 80.5 per cent tariff on Australian wheat and barley - possibly in retaliation to the democratic nation’s call for an independent investigation into the origins and early management of the COVID-19 pandemic.  

Just this week, Australia condemnation of China’s national security law in Hong Kong and the subsequent grant of over 10,000 visa holders a five-year extension and a pathway to permanent residency in a measure just short of a humanitarian intake. The move sparked outrage in China as the CCP promised: “consequences” for “gross interference” in China’s internal affairs. 

With Australian intelligence repeatedly raising warnings of an increasingly dominant China, and the Sino-Australian relations only becoming more fraught with Australia’s actions under Morrison’s leadership, it has become vital for Australia to reconsider its grand strategy in relation to China. 

Devising A New Security Strategy  

Australia is faced with an uncomfortable and tremendous challenge of balancing its economic interests with the political uncertainty posed by the overconfident authoritarian power. 

China’s approach is one of sticks and carrots: economic prosperity in exchange for obedience, or facing almost certain economic ruination. This leaves Australia with a decision to make: what and how much is it willing to give up in order to confront an assertive China? 

Under Scott Morrison, Australia is already proceeding, albeit cautiously, in a manner which suggests that it is willing to confront unprovoked Chinese aggression in Asia and the Pacific. The nation’s actions in response to Chinese assertiveness in Hong Kong, as well as, its advocacy of a COVID-19 investigation are a testament to this. 

Even more indicative is Australia’s active participation in the Quadrilateral Security Dialogue (Quad) since its revival in 2017. Paradoxically, China’s far from moderate behaviour has only caused the other players to enhance their level of diplomacy in the security domain.  

Australia, India and Japan have been engaging in dialogue at increasingly higher ministerial levels. In a clear sign of bolstering security in the region and balancing China’s growing contention, the countries are partaking in bilateral, trilateral as well as minilateral security arrangements such as joint military and naval exercises.  

The Quadrilateral security dialogue is deeply reminiscent of a preparatory dialogue one is likely to see before states engage in coordinated action. If Beijing continues to flex its muscles in the Indo-Pacific security theatre, the QUAD may well expand to include other Southeast Asian countries and develop into a regional security framework. 

In Australia, public opinion regarding Beijing is one of deep suspicion already. Many see China as a looming presence which threatens their democratic and humanitarian values and their national security.  

In fact, in July, a parliamentary inquiry examining Australia’s vulnerabilities in its supply chain infrastructure, defence and foreign affairs, concluded that the nation needed to urgently re-evaluate the risk associated with an over-reliance on China. 

The inquiry, which was prompted by a breakdown in the nation’s supply chains at the peak of the Covid-19 outbreak in China, argued that there was a critical need for Australia to partially decouple its economy and gradually drift away from China if it was to bolster its sovereign resilience. “Although we may hope for reconciliation [with China], the odds favour a partial separation,” said Alan Dupont of The Cognoscenti Group, a geopolitical risk consultancy. 

A key angle for consideration, as Australia devises a new strategy for China in the post-pandemic world order, is the role of and its relationship with the US. As US-China relations grow ever-more antagonistic, Australia may no longer be able to sustain a simultaneous trading partnership with China and a security partnership with the US.  

As things stand, there is a real possibility that we may soon see a bipolar world order with a China bloc (likely comprising of countries in Southeast Asia, Middle East, Africa and Latin America) and a US bloc (likely consisting of nations in Europe, Asia, Africa and Latin America).  

If such a global order were to emerge, Australia will have to decide where its priorities, and indeed its economic survival, lie. Can it successfully lay the foundations for a prosperous economic future without China? Or will it be forced to recognise its considerable reliance on the Chinese economy and adjust its defence and foreign policies to work within this framework? 

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)