Friday, August 26, 2016

Suddenly, Everyone's Pressuring Australia


Australia, China, South China Sea, Foreign Relations, Foreign Policy, Foreign Trade, War, Ausgrid

Both sides of the political spectrum in the US (Washington Post) (Wall Street Journal) are telling Australia to get off the pot in regards to her ambivalent policy towards China  - who, in the wake of the Ausgrid decision and other disappointments, has been acting like a passive-aggressive psycho suitor of late. So how codependent is Australia?

From earlier in the month: Gregory Clark outlines Australia's on-and-off ardor for China, and China's recent reproach over South China Sea stances:

In 1971, Canberra’s fear of China was so great that it became the only major Western nation resolutely to oppose Chinese Premier Zhou Enlai’s desperate efforts to open China to the West by inviting ping-pong teams at championships in Japan to visit China. 
But then things changed dramatically... China was not just the flavor of the month. It was to be the catalyst for 40 years of close trade...All this seemed to come to a climax when Kevin Rudd, a former diplomat who like myself had been trained in Chinese, became prime minister and began to advocate a midway policy between China and the U.S. in the Pacific. In April 2013 the two governments announced they had a strategic partnership. But that did not last very long... Since then Canberra has moved increasingly in a pro-U.S. direction, to the point of being willing to risk important trade ties with China in order to confront Beijing over the South China Sea islands issue... We now find that the 40 years of claimed friendship with China never went much below superficial cultural exchanges and a boom in acquisitive Chinese investment. The instinctive urge to bond closely with the U.S. is as dominant as ever. 
Even so, the vitriol of the Global Times editorial is surprising. The paper is owned by the Communist Party organ, People’s Daily, and in the past treated Australia with kid gloves. But in line with Beijing’s recent foreign policy shifts it has turned increasingly nationalistic.

Andrew Clark reports on how a recent conference between Australia and China on security issues illustrates the tensions between the two:
Now, issues ranging from restrictions on Chinese investment – a la the Ausgrid blocking – to access for Australian "green" farm goods in China... to tensions over the South China Sea, have made Australia's biggest commercial relationship more complex and at times conflicted. 
The Canberra conference ranged over a number of potentially explosive issues. These include possible information swapping about the increasing number of Australian-born and Chinese-born Islamists who have joined terrorist groups in Syria such as the so-called Islamic State and the Al Quaeda-linked Al Nusra Front...Any shared intelligence about the mayhem in Syria will, for the Chinese, provide significant additional information about dissident movements in the huge, sprawling region of western China, which neighbours such flashpoint states as Afghanistan, Tajikistan, Pakistan and Uzbekistan. The Chinese authorities claim that in the past few years, hundreds of Uighurs – ethnic Turks who are Muslims and live in western China – have travelled to Syria and Iraq to join Islamic State and other jihadist organisations. These claims have been used as justification for a tough new crackdown on dissent in China. 
There is also some evidence that recent, more stringent measures on the western Chinese border have led Uighur militants to move further south into states like Malaysia, Indonesia, the Philippines and Thailand, and so onto the radar of Australian intelligence agencies. So far there is no concrete sign of Australian intelligence agencies passing on such sensitive information to their Chinese counterparts. Any move in that direction would be met with a wave of protests about the lack of civil rights in China.

Tim Treadgold looks at the trade consequences in Western Australia:
The Ausgrid situation has triggered a fresh debate about the delicate path Australia is treading when it comes to choosing an investment partner and a security partner. And it’s on the questions of trade and defence that WA enters the debate because: 
• China is unquestionably Australia’s most important investment and trading partner; the two countries complement each other perfectly in business – one providing the raw materials, the other providing the bulk labour to convert those materials into manufactured goods; 
• the US is unquestionably Australia’s most important security partner, providing a defence umbrella that has protected this country since WWII; and 
• WA is a key to both Australia’s defence and trade but it is also a state that does not necessarily benefit from decisions made on the eastern seaboard, and certainly not from those made in Canberra.If, as is feared, the Ausgrid knock-back affects Australia’s relationship with China, then it will be WA that pays the highest price because of its close trading ties with the Asian powerhouse. 
What appears to be happening is similar to a number of other controversial events, for which WA has been punished in the name of national policy.
Business News (AU)

Finally, Terry McCrann prescribes therapy:
For the past 20 years or so — the first 10 or so, essentially uncomprehendingly — we’ve only thought of China as an economic Santa Claus. That 1.3 billion Chinese have been placed on this planet with the sole purpose of enabling 24 million Australians bask in the good — heck, the fantastic — life. That on the one hand, we got to buy all those consumer goods so cheaply; and that on the other, we got to sell them great lumps of Australian dirt at the highest possible price. And that surely, both would continue forever.
YES, the policy elites had a sense of the challenges of geopolitical relationships around the China-Australia-US triangle. But nowhere has there been any sense of a holistic all-encompassing approach to all this. 
The increasing desire by Chinese interests to buy assets in Australia — a combination of a willingness to take lower returns in the short-to-medium term than Australian and other foreign investors, and an appreciation that Australian assets are fundamentally undervalued in a secular sense in the global context — has increased dramatically the points of intersection friction. 
In response we really need to take a big step back; to fundamentally reassess the totality and development of our relationship with China over 10, 20 and indeed 30 years — of course, in the global context and the specifics both of the US in that context and our bilateral relationship.

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