Why China is falling out with Australia (and its allies): QuickTake

Photographer: Cameron Spencer / Getty Images

China and Australia have become involved in an increasingly deep political dispute that is spreading to trade. Even with some Chinese cities experiencing power blackouts in December, Beijing officials continued to block Australian coal shipments, reinforcing their resolve. Miners are not the only Down Under exporters finding it harder to access their largest market as tensions rise, nor is Australia alone feeling hot. Other countries that have clashed with China, including Canada, the United Kingdom and India, have joined Australia to increase cooperation and intelligence sharing, while the new US president has promised a more united front against Beijing.

1. What is the China-Australia fight about?

Ties have been on a downward spiral since 2018, when Australia, accusing China of meddling in his domestic affairs, he spent a new law against foreign interference and espionage. Also barred Huawei Technologies Co. built the country’s 5G mobile network, one of the first to do so, citing national security. The atmosphere worsened in April after Prime Minister Scott Morrison’s government called for an international investigation into the origins of the coronavirus, which causes Covid-19. Then, in November, a Chinese Foreign Ministry spokesman tweeted an edited image of an Australian soldier holding a knife to the throat of an Afghan child – a barbed reference to an ongoing war crime investigation. At a time when the Chinese “warrior wolf “diplomats are increasingly combative, Morrison apology was rejected.

2. What was the economic impact?

Whereas China is from Australia main trading partner by far, the impact has been relatively small – although the individual sectors affected are different. As of May, China began to impose crippling tariffs on Australian barley; prohibited beef from four major meat processors; launched an anti-dumping investigation into Australian wine that led to huge fees; and told importers to stop buying cotton and lobsters. Timber exports were banned and at least $ 500 million of coal delayed for months in Chinese ports – apparently one of the catalysts for blackouts. Still, although reprisals have generated numerous headlines and encouraged some exporters to ask Morrison to back down, the combined impact in January totaled a loss of just 0.3% of Australian gross domestic product, or A $ 6 billion ($ 4, 7 billion), according to government data. Sales of iron ore, the country’s largest source of revenue, are still growing.

3. Why is China doing this?

After months of obfuscation, the Chinese Embassy released a list of 14 complaints in November. They included Australian decisions to reject Chinese investment for reasons of national security, providing funding for what it considers an anti-China think tank, and “unceasing rampant interference” in Chinese affairs. Taiwan, Hong Kong and Xinjiang, and South China Sea. He also cited accusations of racist attacks against the Chinese people and accused the country’s independent media of being antagonistic. But state-backed academics in China said that what most angered the authorities in Beijing is Morrison’s pressure for independent investigators to be allowed to enter Wuhan, which they see as a disrespect for Chinese sovereignty, as well as the disposition of government to agree with US President Donald Trump’s anti-China campaign. “Frankly speaking, we heard a lot of negative voices and saw a lot of negative movements on the Australian side,” said Foreign Minister Wang Yi in December. President Xi Jinping’s government has a history of using trade as a baton South Korea, Japan and Taiwan have suffered reprisals in recent years.

4. Is there a way out to Australia?

It is not obvious. Chinese diplomats and state media said it was up until the government in Canberra must restart ties, but they have not made public publicly what Australian measures would be sufficient to reverse trade reprisals. Chen Hong, director of the Australian study center at East China Normal University in Shanghai, said China is unlikely to back down until it sees substantial action, not just rhetoric. Morrison has indicated that he is not willing to act on any of the 14 complaints; he and his ministers seem to be waiting for China to lower the temperature for a new “point of resolution ”in the relationship can be found. Meanwhile, at the end of the year Australia said it would formally challenge China in the World Trade Organization.

5. Is Australia the only target country?