A lifetime of expanding Australian engagement with the world’s second-biggest economy is at risk of coming to an end. A great coupling, initiated by the Hawke and Keating governments, is threatening to become a great decoupling, a process started by the Trump Administration and followed in important respects by Australia. If that is the democratic will of the Australian people as expressed through their elected parliament, it would be comforting know what Plan B is, since the size of China’s economy exceeds that of the rest of Asia combined.
Australian governments should, of course, give primacy to national security. Public support for the Australia-China relationship is being undermined by China’s cyberattacks, construction of military bases beyond its territorial waters in the South China Sea, its behaviour in Hong Kong, threats against Australian businesses trading with China, surreptitious attempts to influence Australian political processes and pressure on the Chinese diaspora in Australia to follow the party line.
But protecting Australia’s national security should not require hurling insults at each other. If an intention to legislate on national security is in the national interest, then the Australian government should convene a media conference and explain it, instead of tipping it out the previous evening for exclusive coverage and commentary the next morning by its favoured anti-China media outlet.
Forming friendships and building commercial relationships with China was not always considered unsound – although when Gough Whitlam visited China in 1971, promising to establish diplomatic relations if elected to government, Prime Minister William McMahon claimed he had been played “like a fisherman plays a trout.” Three days later Richard Nixon announced that he, too, would visit China.
Prime Minister Malcolm Fraser was well regarded in China. In fact, it was at Fraser’s invitation that, in April 1983, Premier Zhao Ziyang, the first Chinese head of state to visit Australia, was hosted by incoming Prime Minister Bob Hawke. Less than a year later, Hawke visited China, where he and Zhao Ziyang announced an agreement to integrate Australia’s and China’s steel industries.
A further exchange of visits resulted in Hawke returning to China in May 1986, where the diminutive but enigmatic leader, Deng Xiaoping, explained the reasoning behind his decision, from 1978, to begin opening up the Chinese economy.
Drawing on these discussions, Hawke foresaw the Asian Century. While still in China, Hawke invited me to take on the role of his trade and microeconomic adviser after his incumbent trade adviser announced he was moving on after several years in the job.
The Hawke-Keating reforms, to open up the Australian economy, were designed to take full advantage of the coming Asian Century. The relationship survived the Tiananmen Square massacre and Hawke’s decision to grant permanent residency to 42,000 Chinese students studying in Australia.
More than two decades later, as Australia’s trade minister, I was able to work constructively with my Chinese counterpart, Chen Deming, including on an Australia-China food study to promote Chinese investment and trade in Australia’s safe, premium agricultural products.
As the architect of the White Paper on Australia in the Asian Century, I sought to bring the Hawke-Keating vision to reality, with the fulsome support of Prime Minister Julia Gillard, by expanding cooperation in areas such as higher education, tourism and finance.
Despite the Gillard government’s 2012 decision to ban Huawei from the core of the NBN, the relationship remained in good shape.
In March 2013, we met China’s newly appointed President, Xi Jinping, at the annual Boao Forum initiated by Hawke and colleagues from the Philippines, Japan and China.
In Beijing’s Great Hall of the People, we signed a new strategic partnership between Australia and China. At the signing ceremony, Premier Li Keqiang asked Prime Minister Gillard: “Which one is the free trade guy?” Gillard pointed to me and Premier Li did likewise, smiling as I replied: “I’m the free trade guy.” I had kick-started the stalled free-trade negotiations begun under Prime Minister John Howard. The new Chinese leadership was keen to bring those negotiations to completion.
That task fell to incoming Trade Minister, Andrew Robb, who did a good job for the Abbott government and for Australia.
Yet, the Abbott government tore down the Asian Century website as one if its first acts. In more recent times the two governments have mostly provoked each other with aggressive language, and with largely spurious anti-dumping actions.
China has been dependent on Australia only for our biggest export, iron ore. Even that is changing, with its investment in a giant iron ore mine in the west African country of Guinea and the deployment of massive new ships to transport iron ore from Brazil to one of its newest deep-water ports.
China can readily do without Australian beef, gas, universities, tourist attractions, wine and seafood. Australian supporters of the great decoupling have not explained their Plan B beyond the glib statement that we should diversify our exports. Precisely what does that involve? Scouring the earth for another country that might like to buy a few hundred million tonnes of iron ore a year? Or an Australian prime minister phoning the prime minister of India or the president of Indonesia urging them to instruct their nation’s private businesses to buy vastly more chickpeas or live cattle?
By all means, the Australian government must protect Australia’s national security, but it would be wise to resist any urge to follow Trump’s “Chinah” playbook of labelling his presidential rival “Beijing Biden” and harvesting votes by fuelling anti-China sentiment. In that vein, recent reassuring statements by Trade Minister Simon Birmingham and Foreign Minister Marise Payne are commendable.
Craig Emerson is managing director of Emerson Economics, a distinguished fellow at the ANU, adjunct professor at Victoria University’s College of Business and director of the Australian APEC Centre at RMIT.