Commentary on Political Economy

Sunday 25 July 2021


We’ve empowered the bully we now face

Relations with China reached their zenith in 2014: symbolised by our trade deal, China’s first with a G20 country, the declaration of a “comprehensive strategic partnership” between our two countries, and President Xi Jinping’s assurance, in the English version of his speech to our parliament, that China would be “democratic by mid-century”.

It all now seems so distant, in this new era of wolf-warrior diplomacy, with Australia described as “chewing gum” on China’s boot.

For those of us who grew up in the Cold War, and might have been tempted to conclude with Francis Fukuyama that “history really had ended” in a global convergence towards market economics and liberal democratic politics, it’s all changed and changed utterly. China has dropped the Deng-era tactic to “hide its strength and bide its time” while for the rest of us, there can be no more wishful thinking about liberalisation. We have to accept that when the Chinese strongman states that “east, west, south, north and middle, the party leads everything”, that is what he really means.

That unipolar period, roughly 1990 to 2010, from the fall of the Berlin Wall to the global financial crisis, is now but a memory from another age; and – barring a revolution in Beijing – how to live with China, to deal with it but not to be pushed around by it, won’t just be our main external preoccupation; it’s likely to be our great grandchildren’s too.

For almost every country, the China relationship will be as consequential as the US one, only far more fraught: because, at least for fellow members of the Anglosphere, America has been family; and because whatever mistakes America may have made, and whatever particular interests America may have pursued, the US has been a benevolent and idealistic hegemon. With roughly four times the population of the US, China only has to be as quarter as prosperous, per person, as America, to be its economic equal; and, sooner or later, economic equality will translate into strategic parity.

A key factor in the Beijing regime’s belligerence towards Taiwan is the palpable demonstration it provides that Chinese people can be both prosperous and free. Picture: Reuters
A key factor in the Beijing regime’s belligerence towards Taiwan is the palpable demonstration it provides that Chinese people can be both prosperous and free. Picture: Reuters

It’s not enough, though, simply to appreciate the scale of the China challenge; we also need to appreciate all the ways in which we might be making ourselves weaker in facing it.

First, we sometimes fail adequately to distinguish between the Chinese people and the Chinese party-state, and risk turning our ethnically Chinese citizens from an asset to a liability; second, we still think that China “does business” as opposed to “practises politics”, with every entity and each individual expected to do the state’s bidding; third, we often seem oblivious to the extent to which some of our domestic preoccupations might be sapping our morale in this contest; and fourth, conversely, there’s also a tendency to see China’s eventual dominance as inevitable and to despair of an unequal struggle.

As China’s leaders know, and as Taiwan and Hong Kong prove, there’s no in-built totalitarian gene in Chinese people’s DNA. A key factor in the Beijing regime’s belligerence towards Taiwan is the palpable demonstration it provides that Chinese people can be both prosperous and free. It’s a real-life example of a genuine “democracy with Chinese characteristics”.

Quite apart from preferring democracy to dictatorship, supporting Taiwan would be proof that Western governments are not anti-Chinese, just opposed to the communist party-state. Especially in a country like Australia, with a million-plus citizens (or about 5 per cent of the population) of Chinese birth or background, it’s vital to avoid making decent Australians (who just happen to have Chinese ancestry) feel like aliens in their own country.

Like all migrants, people from China have chosen to live in Australia and they typically take enormous pride in their adopted country. They’re far more likely to be ambassadors for Australia to China than the other way round, despite the intrigues of “United Front” bodies. That’s why, along with the vast majority of Chinese-Australians, our governments need to be strong against the genocide of the Uighurs, the suffocation of Hong Kong and a potential Chinese invasion of Taiwan, rather than just be anti-China.

President Xi Jinping and Chinese Premier Li Keqiang. Picture: Getty
President Xi Jinping and Chinese Premier Li Keqiang. Picture: Getty

As Beijing’s hysterical reaction to Australia’s call for an impartial investigation into the origin of the Wuhan virus suggests, not to mention the Chinese foreign minister’s 2010 admonition to Singapore that you are small country but we are a big one – “the weak suffer what they must while the strong do what they will” – the Chinese government has no sense of the independent sovereignty of nations.

As in the imperial past, with China, other countries are expected to “tremble and obey”; tributaries to the ruler of “all under heaven”. To its leadership caste, China has always been the “middle kingdom”, the dominant country on Earth, with the “century of humiliation” an aberration to be expunged, even avenged. Thanks to globalisation, the whole world has become China’s neighbourhood; and thanks to Marxism-Leninism, the Chinese leadership’s overlord instincts have been reinforced.

The “14 grievances” against Australia that the Chinese embassy published last year: that Australia had blocked some Chinese investments; banned Huawei from sensitive national infrastructure; backed international law in the South China Sea; arced up against Chinese cyber attacks; and blocked Victorian participation in the contemporary version of an “unequal treaty”, the Belt and Road Initiative; all of them are replete with expectations that no self-respecting country could ever meet.

Yet it’s the West itself that’s done so much to empower the bully we now face; a strategic challenger that’s likely to prove a far stronger competitor than the old Soviet Union because, unlike Russia, it’s a first-rate economy with increasingly a military to match.

Most obviously, from the time president Bill Clinton auspiced its entry into the World Trade Organisation, China has made use of other countries’ investment and technology to expropriate their industrial base. To us, back then, it seemed a richer China would inevitably become a freer China. To the CCP, of course, a richer China would be a stronger China, with the added bonus of being able to bring economic as well as military pressure to bear on its adversaries.

Cheap consumer goods now no longer seem such a bargain in return for the hollowing out of the industries that were the foundation of our economic strength and technological edge.

The pandemic has brought home the extent to which even the US had become dependent on China for drugs and PPE; and in Australia’s case, we simply cannot afford to be so dependent on an economic partner that uses trade as a strategic weapon to be turned on and off like a tap. But this isn’t just a problem for a country like us with 30 per cent of its trade with China. Every business with Chinese intermediate goods in its supply chains is exposed to economic pressure, which naturally enough has created a vast lobby for Western governments to do nothing to alienate Beijing. Hence the politics of standing up to Beijing has become so fraught that no one is prepared to challenge the developing-country status of the world’s number one trading nation already and soon-to-be number one economy.

Still, if there’s to be one lasting legacy of the Trump presidency, it’s likely to be the new consensus in Washington for economic decoupling from China. But this will require a very different approach from Western businesses that have grown so accustomed to outsourcing to China so many of their inputs, and it will mean higher short-term costs – yet vital though it is, it’s only one factor in our strategic vulnerability.

Countries such as the US, Britain and Australia are moving at breakneck speed to decarbonise our economies. To us, saving the planet is more important than our own relative place in it – more important, for instance, than affordable and reliable power and preserving the jobs and industries that depend on it. Yet even assuming that human emissions are the key factor in climate, it’s a one-sided and ultimately futile struggle if the world’s biggest emitter by far is not involved.

China is happy to pile on “moral pressure” against the West in global climate forums, and to sell us solar panels and prefabricated wind farms, but – because it will never prioritise cutting its own emissions ahead of boosting its economy – the practical result of climate change policy is an economically weaker West and a stronger China without any great reduction in emissions.

Likewise, in countries such as the US, Britain and Australia, nationhood is being undermined, often with official connivance. Australia hasn’t yet had the orgy of statue toppling that’s occurred in the UK but, for a decade at least, under our national school curriculum, every single subject, from physics to Latin, is supposed to have been taught from an Indigenous, Asian and sustainability perspective; that’s calculated to convict our country, in young Australians’ eyes, of national illegitimacy, cultural sterility and environmental vandalism.

Then there’s our response to the pandemic, which has been curiously Chinese in its approach to freedom but most un-Chinese in its zealous protection of every single human life.

For 18 months, most Australians have been living under states of emergency, subject to draconian rules on who can do what, set by unelected and unaccountable chief health officers; even though, in our country at least, Covid policy has arguably done more damage than Covid itself. Granted, getting the balance right between safety and freedom is rarely straightforward. At one level, it’s admirable the lengths we’ve gone to in order to protect the vulnerable. On the other hand, it’s hard not to wonder about the resilience of countries that are so discombobulated by a virus.

Of course, China has its problems too. The emerging democratic superpower, India, will soon overtake it as the world’s most populous nation. China has plenty of hard power, but almost no soft power. It has no friends, only clients and supplicants. No one flees to China seeking a better future, and all the Chinese who can want a Western education for their kids and as much property as possible beyond the reach of the commissars. There are plenty of people inside China who think their country has lost its way.

Especially for Australia, there’s a duty to be more engaged with our own China-connected citizens, in order to understand China better and perhaps, over time, help the people of China to appreciate that the alternative to dictatorship need not be anarchy.

There’s no reason why we shouldn’t continue to sell China our commodities, to buy its consumer goods, and to make common cause with China where it accords with our interests and our values to do so, such as in the search for the still-missing Flight MH370. What we can’t do is become dependent on China for anything that’s vital to our future. Essentially, what’s need is a reciprocity test: “We will allow you to do here, what you would allow us to do there.”

Meanwhile, with the mass executions starting in Afghanistan, as the American-led West scuttles out, it’s not our values and our capabilities that are in doubt so much as our readiness to assert them. Churchill’s lamentation after Munich seems apt: “The first foretaste of a bitter cup that will be proffered to us year by year, unless by a supreme recovery of moral health and martial vigour we arise again and take our stand for freedom as in the olden time.”

Our competitors are sure that they’re tougher than us, and that history is on their side; and who could blame them? Neurotic about risk, worried about climate, uncertain about identity; it’s hard to imagine countries less temperamentally ready for the new Cold War – or even for the cold peace – that’s likely to exist between the democracies and China for as long as it maintains its current leadership.

Tony Abbott is a former prime minister of Australia. This is an edited version of a speech he delivered this week to the Scotland-Asia Society in Edinburgh.

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