What should Australia do about China? (2021)

Hi, I'm Sonya Brisking and welcome back to the Snapshot Channel. Like and subscribe if you haven't done so already. Do it now. Today's topic, Australia and China. What is happening with our relationship? Hopefully, we'll find out the answer by the end of today's episode. Is China a panda to be hugged or a dragon to be feared? In 1997, China's vice president sent to a room full of businessmen, in fact, over a hundred of them. Let's get rich together. And they certainly did. Let's put things into a little bit of perspective. China is Australia's largest trading partner, both for imports and exports. Almost 30% of all the things that come into Australia originate in China. Going the other way, 39% of all exports land in China. Three quarters of those are raw materials. Iron ore, the Chinese love Australian iron ore, but as well as barley, beef, wine and lobsters. Gosh, the Chinese love the Aussie lobsters. Well, at least until recently when China decided to play a bit of a trade warfare with Australia. But a bit more about that later on. Oh, gosh, and don't forget the personal shoppers, masses of Australia's baby formula, as well as skincare, also land in China. At one point, China got so big for Australia that a business commentator, Robert Goodlipson, for The Australian, said that, we are incredibly dependent on China. In fact, we are almost like a state of China. Hmm, a state of China. That's a scary thought. However, recently, there has been a little bit of a fallout. In fact, a recent poll by the Lower Institute indicated that over half or 56% of Australians blame this fallout on China. So here's what happened that might have triggered, sort of triggered, everything. So number one, Australia introduced foreign interference laws, which basically said that any foreign powers cannot interfere into Australia's politics or society. Chinese didn't like that. Number two, the ban of Huawei in 2018. Now, that was done by the previous Turnbull government, because Huawei cannot possibly operate without the influence of a Chinese communist regime, and we wanted their telecommunications controlled, or even have the slightest possibility of being controlled by the Chinese government. And finally, number three, the recent inquiry into the origins of COVID-19. Now, that was spearheaded by the current Morrison government. And of course, that wasn't a welcome step. Made the Chinese angry yet again with Australia. So what did China do to retaliate? Well, firstly, they decided to warn Chinese tourists not to go to Australia because it is dangerous to come to this country. But it was a lot of empty talk, really, because our borders were shut anyway. Remember, it's the pandemic. So a lot of people really saw that as a bit of a symbolic gesture to try to force Australia to back down on our values and our policies. But in a non-pandemic year, Chinese tourists do bring around about $11 billion a year in revenue. What else? Well, they also encouraged Chinese students not to come to Australia to study. Why? Well, because apparently Australia has got rampant racism. That industry as well brings around another $11 billion a year. And finally, we're back to the trade war games. Tariffs. China imposed excessive amount of tariffs on Australian exports, particularly for beef, for our wine, for our barley, and they let our Australian lobsters rot in customs. Really? What a waste. These exports total of roughly $25 billion a year. So, mind you, the Australian government did try very hard to address and resolve these differences, but largely have been ignored. So the Agriculture Minister, David Littleproud, tried to engage his counterpart. Not much success there. Also, the previous Trade Minister, Simon Birmingham, made attempts, as well as the Foreign Minister, Maryse Payne. Meanwhile, China continues to push its boundaries. They arrested two Australian Chinese on espionage charges. One is an Australian-Chinese writer, Yang Hengjun, and also an Australian-Chinese journalist, Chang Wei. So, can Australia stand up to China without jeopardising its sovereignty and values, and also not collapse economically? The short answer is yes, as long as there is a political will to do so. And thankfully, both the government and the opposition are in agreement on how to deal with China's bullying tactics. So, interestingly, but perhaps not surprisingly, the Australian economy wasn't doing so badly, despite all the sanctions. For the 2020 exports to China, they were down only 2%, down from $148 billion to $145 billion. On a micro level, of course, the individual exporters were hurting. However, they soon figured out new markets, found new destinations for the exports. And interestingly, in December last year, the wheat export was a total of 600,000 tonnes to China, and that was the largest monthly export from Australia to a single country. It's also interesting to note that China put a freeze and sanctions on the exports that they particularly didn't need. For example, coal. Coal was affected by the sanctions, yet they didn't put a freeze on the iron ore, because it is very hard to find any other place that would export the iron ore of such great quality as Australia does. Having said that, there are two competitors for Australia's iron ore, and China did source from them in 2020, and that is Brazil, as well as West Africa's Guinea. Now, in fact, China is pouring billions of dollars into their Belt and Road Initiative. As basically part of that project, they want to make sure that the iron ore from alternative places is on the market by 2025. So Australia has four years to get its act together and figure out an economic plan to make sure that we stay afloat despite shifting markets for the iron ore. We have done it before when Britain in 1973 dumped our apples and butter. So Australia pulled through, and we can certainly do it again as long as our leadership stays on top and makes the right reforms needed to make Australia's economy resilient in the global market. So Australia is staying strong and standing up to China's bullying, but it doesn't mean that China won't strike again, because they do, and they have a history of doing it, even if it hurts them, because they really want to make an example of Australia to the rest of the world to show, look, this is what happens when they don't listen to China. And to finish off, I'd like to quote the words of Professor James Diseki from the Centre of Policy Studies at Victoria University, and I'll read you his quote. Perhaps no price should be put on upholding and expressing our liberal, democratic and human rights values and protecting our security interests, but the cost of economic sanction might well be less than many fear. The panda might have turned out to be a dragon, or maybe it has always been a dragon in pandas' skin. So thank you for watching. I hope you've learned something today. Please don't forget to subscribe, and we'll talk to you soon. Take care. Till next time.