Australia must not cave to trade threats from China by sacrificing its principles in the hope of boosting export earnings, federal government MPs have warned amid Labor calls for stronger action to repair ties with Beijing.
Liberals and Nationals warned against any shift in national policy in response to the new risks, arguing this would only reward the Chinese effort to use trade as a lever in security and foreign policy.
The response suggests the trade threats are not building pressure on Prime Minister Scott Morrison within his party room, with some MPs saying Australia should prepare for more friction if China escalates tensions with its neighbours.
“I don’t think that any amount of sucking up to them is going to stop them being the pariah they are,” said Warren Entsch, a government MP from Queensland whose constituents include seafood producers whose exports are at risk.
“Otherwise we are just compromising ourselves on our integrity and principles, and we’re better than that.
“Let’s pick up our efforts with Japan, South Korea, Taiwan and India.”
Former resources minister Matt Canavan, a Liberal National Party Senator for Queensland, said the questions over barley, meat, seafood and other exports could not be allowed to shift national policy.
“We can’t sell our principles out for $150 billion in exports,” he said.
“Previous generations sacrificed their lives to protect our independence. All we’re being asked to do is give up our access to cheap TVs.”
Senator Canavan said he had spoken to exporters about the risk of their heavy reliance on China at a time when it was at odds with neighbours such as Taiwan.
“If our iron ore is going to be used to build ships and planes and they are used to threaten peaceful countries, that might not be something that should continue,” he said.
“That is something we should be thinking about now.”
Government MPs believe the Chinese trade threats, described as “rumours” by official media in Beijing, are designed to force Australia to back down on its foreign influence laws, foreign investment controls and objections to telco giant Huawei on security grounds.
“If this is indeed China seeking to use trade to pressure us politically, and force changes in our policy settings, it is important that we remain united, resolved and patient,” said Liberal MP Dave Sharma, the member for Wentworth in eastern Sydney.
“Decisions taken in Australia’s sovereign interests are not negotiable.
“Ultimately the fundamentals of our extensive trading relationship with China should reassert themselves. We should continue to seek a productive and beneficial relationship with China, but it needs to be one founded on mutual respect.”
Liberal MP Katie Allen, who represents Higgins in Melbourne, said the trade interactions required “nuance” to reflect each country’s identity.
“For us that means staying true to democratic values, the rule of law and being respected as a responsible and reliable trading partner of high-quality products,” she said.
“China will continue to be a major trading partner for the foreseeable future but there is widespread recognition that diversification is an important aspect of Australia’s trading future.”
In the same way, Liberal MP Fiona Martin from the seat of Reid in western Sydney said Australia was building stronger trading relationships with Japan, Korea and India, as well as trade deals with the United Kingdom and European Union.
“From the outset of the pandemic, the Australian government made it clear that we will not be economically coerced by other nations on matters of foreign policy,” she said.
“My electorate shares the views of the rest of Australia. We are watching this closely and hoping for a fast resolution.”
The trade tensions come when foreign policy experts believe Chinese President Xi Jinping and the Chinese Communist Party may seek to test the United States and allies such as Australia in the wake of the US election.
Mr Morrison is considering a visit to Tokyo in coming weeks to meet Japanese counterpart Yoshihide Suga, who recently visited leaders in Vietnam and Indonesia.
Labor deputy leader and defence spokesman Richard Marles accused the government of mishandling the relationship with Beijing
“We are seven years into this government and there is not a single personal relationship of substance between any member of this government and any member of the Chinese government,” Mr Marles said.
“I find that astounding.”
Labor does not propose any shift in Australian policy on foreign investment laws, foreign interference laws, the treatment of Huawei or Chinese military expansion in the South China Sea.
Chinese state media blamed Australia for creating the trade tensions by “baselessly sanctioning Chinese companies and aggressively sending warships to China’s doorsteps” as well as “colluding” with Washington DC.
While The Global Times said Australia would “sober up” because it was nervous about losing exports earnings, one Liberal MP said that was an example of “wishful thinking” about a change in security and foreign policy.
Mr Entsch, who is co-chair of the Parliamentary Friendship Group for Tibet and represents the electorate of Leichhardt in northern Queensland, expressed his frustration with the Chinese Communist Party government.
“I think we need to appreciate the nature of who we are dealing with,” he said.
“They are spiteful. The normal rules do not apply. It’s their way or the highway.
“It’s going to hurt us. But it’s also going to hurt the Chinese people because they’re going to miss out on our products.”
By David Crowe
‘We surrender or walk away’: Readers respond to new trade concerns from China
As Australians joined the world in turning their focus to the US election this week, many were also looking anxiously in China’s direction.
This week The Age and the Sydney Morning Herald reported that there had been unconfirmed instructions from Chinese customs authorities threatening to block Australian wine, copper, barley, coal, sugar, timber and lobster.
The news article, Australian exporters to China face $6 billion ‘D-Day’, by staff reporters including China correspondent Eryk Bagshaw, noted that if enforced, such action will be a major escalation in Australia’s trade dispute with China.
“The notice, distributed by a customs clearance agent on Tuesday, has not been confirmed by the Chinese government, but its publication was enough to send shares in ASX-listed copper miner Sandfire Resources falling by 8 per cent,” the article reported.
It comes as more than 20 tonnes of Australian lobster remains stuck at a Shanghai airport, Queensland timber has been blocked, Australian wine has been subject to an anti-dumping investigation and Chinese steel mills have been told to stop importing Australian coal.
The trade dispute followed Australia’s push for an inquiry into the origins of the coronavirus earlier this year but has intensified after Beijing imposed new national security laws on Hong Kong and advanced its territorial claims on the South China Sea.
Australian Trade Minister Simon Birmingham and Agriculture Minister David Littleproud have not had official-level contact with their Chinese counterparts since the beginning of the pandemic.
For some readers commenting on the unfolding situation, it was a case of “reap what you sow”. Among these readers Australia was criticised for relying too heavily on China as an export market, and for past foreign ownership decisions.
Frying pan: “No sympathy for any of this. We gladly gave them carte blanche to produce and sell back. Then we let them buy up our farms and one port. Then to top that we put all our eggs in the one basket.”
I hate lying politicians: “Sucked in. We have allowed their people in to buy up our Prime Ag land and they no longer need our imports…Australia – we must be the dumbest people on earth to allow this to occur. I think it’s called ‘reap what you sow’.”
Australian authorities were also criticised for what some saw as their haphazard handling of foreign policy issues, saying greater diplomacy was required.
Calis: “People ought to take a look at the series of actions taken by the government targeting China since 2017, they shouldn’t be surprised by the actions taken by the Chinese government. You poke someone long enough you will eventually get his attention. Unfortunately, in this case that someone is a customer.”
Scott55: “If a CEO loses her job for spending $20k on watches what happens to PM Morrison who has given away $6 billion in export revenue? All of this damage just because he could make maximum noise for an inquiry that was always going to happen anyway.”
Eric Olthwaite: “This is what happens when you go all the way with DJ. Trump. China is no angel by any means but you cannot continually disrespect a country which is your largest trading partner. This is the Coalition’s fault, nobody else’s.”
Lex: “A trading partner and a vindictive economic saboteur are not the same thing. The sooner Simon Birmingham gets a grip on reality and lodges a formal complaint about China with the World Trade Organisation the better. I don’t know what he’s waiting for.”
Reflecting on the reader comments, Bagshaw explained how the Chinese carry out such actions.
He said instructions are given verbally to traders, many of them state-linked, and then disseminated through each industry. Phones and written notes are forbidden in these meetings – a written notice to unilaterally stop importing certain products would almost certainly be litigated at the WTO.
“These tactics achieve two things,” Bagshaw says.
“Firstly, the verbal instructions become self-fulfilling. Traders become reluctant to import Australian wine or sugar out of fear they will be stopped at Chinese ports. The Chinese government can then label these actions as a matter for private companies, as they did on Wednesday.”
Secondly, Bagshaw says, it makes Australia second guess its foreign policy without actually telling the government what it has done wrong.
“This puts all aspects of Australia’s foreign policy on China under political pressure rather than any one initiative,” he says.
“Australia’s ministers cannot get a phone call to their Chinese counterparts for this reason. The Chinese government wants to keep them guessing.”
Many readers maintained that Australia had to stand its ground on important human rights and security issues.
Oldsie wrote: “We can not trade our sovereignty at any price.”
B-black agreed: “Security trumps trade every day of the week. The price of Chinese trade was their unfettered interference in our political processes in addition to well documented state sponsored cyber crime (which will probably still happen).”
Randroid: “China is weaponising trade. We surrender or we walk away. I love the Chinese culture and people, but not enough to transfer control of Australia to Beijing.”
They said it was clearly time to diversify our trading partners – or, as one reader suggested, at least ensure any export deals with China are done on a “cash before despatch basis”.
AlunH: “Then at least the lobsters dying in Shanghai will be Chinese.”
Others wanted authorities to go a step further and retaliate – in business and foreign policy.
SteveSyd : “Add iron ore to that list too, denying them what they need most. Or tax its exit to compensate for the other industries that have been casualties in China’s weaponizing of trade. Put a rocket up them and their Belt and Road initiative.”
Trogdor: “So pick a random Chinese import and hold it on the docks. It’s the only way to deal with petulant child-nations.”
MotorMouth: “The first thing to do is officially recognise Taiwan, re-open diplomatic relations and see how China feels about that. The last thing we should do is capitulate on anything.”
Gc_lc: “Yes, let’s formally recognise Taiwan including by immediately appointing an ambassador to Taiwan. It’s time to let Xi know that we do not like his modus operandi!”
Meanwhile, other readers vowed to play their part and boycott Chinese products, even if they are cheaper.
lawyers: “I have stopped buying anything from China even if the alternatives cost more. China is not a good trading partner and it is time to find other markets and support local industries.”
Gman: “Rip the scab off – let’s stop importing China. Let’s suffer a little and regain some dignity.”
Barry: “Can our retailers now please acknowledge the truth of the China relationship and stop filling the shelves with ‘made in China’ product. I am trying very hard to not buy ‘made in china’ and will go without if I have to.”
Kathy: “I do my bit by putting it back if it’s made in China.”
By Orietta Guerrera