News Paul Bongiorno: Australia’s failed China policy is very bad business
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Paul Bongiorno: Australia’s failed China policy is very bad business

Paul Bongiorno says Australia has no plan to improve its relations with China. Photo: TND
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Somehow Australia has ended up making an enemy of its biggest trading partner and the world’s emerging economic superpower.

To say that it is in the interests of our prosperity as a nation to repair relations with China is an understatement, but increasingly it appears a task beyond the wit of the Morrison government.

The Prime Minister has drawn a line in the sand; he will only deal with Beijing on his terms.

This surely is a recipe for a worsening situation that directly threatens billions of dollars’ worth of trade.

Scott Morrison told worried business leaders that while he was always prepared to “pick up the phone” he was not prepared to compromise “what we stand for” and the right to speak out.

Scott Morrison’s stance on China has exacerbated deteriorating relations with China. Photo: AAP

Those sentiments weren’t missed in China.

Foreign Ministry spokesman Zhao Lijian rejected the Australian government’s view that Beijing was to blame for the deterioration in relations.

Mr Zhao threw the onus back on Canberra: “Those who have caused problems should be the ones to solve problems,” he said at his latest regular press conference.

The list of grievances from the Chinese embassy in Canberra last week makes a credible case that the Australian government has in the past three years increasingly seen China under President Xi Jinping as a major security threat.

Hence the ominous warning from an unnamed Chinese diplomat to the Sydney Morning Herald and The Age: “China is angry. If you make China the enemy, China will be the enemy.”

Australia no longer has the luxury of John Howard when he was prime minister of not choosing between China and America.

Viewing China as a major security threat has angered President Xi Jinping. Photo: Getty

As Washington and Beijing compete for global pre-eminence it has never been more urgent for Australia to have the gumption to ply more courageous and independent middle-power diplomacy.

Mr Morrison told the business audience that “China has changed”.

Just exactly how he didn’t spell out but one thing is certain, the Chinese economy is 10 times bigger now than it was when John Howard was PM – that’s some change.

China is the major trading partner not only with Australia but 50 other countries and within a decade will overtake the United States as the world’s largest economy.

And all of that has been achieved peacefully.

One thing that hasn’t changed since Prime Minister Robert Menzies cleared the first shipment of wheat to “Red China” in the early 1960s is that the giant nation is governed by an authoritarian Communist Party.

That government has lifted 500 million of its people out of poverty and has a rapidly expanding middle class.

The challenge for the Morrison government is to put Australia’s national interest first, not to be caught in the slipstream of super power competition.

The reluctant outgoing president Donald Trump certainly put America’s interests ahead of Australia’s when he signed with much fanfare in January the Phase One trade deal with China.

And while Mr Trump tried to make China an election issue, he never walked away from this deal at any of his campaign rallies.

China will buy $200 billion of American farm produce and other goods; already American agriculture exports have increased 70 per cent at the expense of Australian farmers.

Even Donald Trump had a more nuanced understanding of the link between trade and security than Mr Morrison.

china-tariff-retaliation
Donald Trump’s Phase One trade deal with China places America’s interests ahead of Australia’s. Photo: Getty

The Morrison government’s banning of the $600 million sale of the Australian Lion Dairy & Drinks company to China Mengniu Dairy Co this year is a case in point.

Treasurer Josh Frydenberg shunned advice from the Foreign Investment Review Board and Treasury and, according to one of our most experienced security experts Dennis Richardson, it was a mistake.

Mr Richardson was the Howard government’s ambassador to Washington and before that the Director-General of Security.

He says it’s unnecessary to make the economic relationship a security issue.

Former foreign minister Bob Carr was appalled at what he called the “China panic” when all of a sudden there was a red Chinese flag under every bed.

Mr Carr now asks, where is the Morrison government’s plan going forward?

To the nation’s loss, there doesn’t appear to be one. No wonder business leaders are worried.

Paul Bongiorno AM is a veteran of the Canberra Press Gallery, with 40 years’ experience covering Australian politics

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