News World Why the US midterm result will make a difference to Australia’s relationship with China

Why the US midterm result will make a difference to Australia’s relationship with China

China Australia
The PM says the findings of the report are "necessarily classified". Photo: AAP
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No one will be watching the results of the US midterm elections more than China. Any rebuff to Donald Trump will be welcomed.

A gigantic trade exhibition in Shanghai this week was timed to send the message to the world America may be shutting the door but Beijing is open for business.

Make no mistake about it, Australian business is breathing a huge sigh of relief.

Our diplomats have been working overtime to repair the damage of the Turnbull government’s over-the-top assault on Labor and then-Labor senator Sam Dastyari.

In going after a Labor scalp, an embattled Malcolm Turnbull, desperate to impress the conservatives in his party, attacked Mr Dastyari as “Shanghai Sam”.

Sure, the sacked Labor senator was foolish defying government and Labor policy over the South China Sea to curry favour with major Chinese donors, but Mr Turnbull’s anti-China rhetoric enraged Beijing.

The then-prime minister ignited a “China panic”, where anyone having any dealings with our biggest trading partner and the world’s second largest economy was branded suspect.

Business leaders like Fortescue Metals’ Andrew ‘Twiggy’ Forrest were appalled and urged a more nuanced approach. But the damage was done.

The indelicate handling of the issue was encouraged by security agencies not assessing risks, in terms of the enormous benefits to Australia and $150 billion of trade. It led to a costly stand-off.

Not only were ministerial visits put in the deep freeze, at least two multimillion-dollar deals in health services were stymied.

One businessman involved says the Abbott-Turnbull and now Morrison governments – unlike John Howard’s – do not have an economic minister in the national security committee of cabinet to add balance to assessment of the national interest.

But two developments have come to Australia’s aid. The dumping of Malcolm Turnbull – never forgiven for a speech the Chinese took as a lampooning of Mao Zedong – and US President Donald Trump launching a trade war against China.

At an international business and media forum in the southern metropolis of Guangzhou, director of the academic committee of the central committee Bijian Zheng said what “Trump has started makes us more alert”.

A key element of that alertness is Beijing’s willingness to fill any vacuum that a protectionist, isolationist America leaves.

In this, encouragement has come from the European Union, with former French prime minister Dominique De Villepin urging Europe and China  to work together to foster open, free international trade.

The message of Chinese President Xi Jinping is that Beijing is putting out the welcome mat to all corners. He invited 3600 companies from 130 countries to participate in the world’s biggest trade fair in Shanghai.

The invitation is to sell into the giant Chinese market. The show is deliberately framed as the China International Import Expo.

Australia has the sixth largest participant group. Two hundred companies have rushed to stake their claim.

A sign that our participation is appreciated, and that our criticism of Mr Trump’s trade war has been noted, is the invitation this week to Foreign Minister Marise Payne to come to Beijing on Thursday for “strategic dialogue” with her counterpart Wang Yi. It is the first specific high-level meeting in more than a year.

Trade Minister Simon Birmingham, in Shanghai to lead our delegation, has had one-on-one discussions with his Chinese counterpart – another ice breaker.

In a positive development as far as the Chinese are concerned, Mr Birmingham has praised China’s massive international infrastructure fund known as Belt and Road.

Far from seeing it as a furtive strategic threat, the minister sees it as an investment in the “development of our region”.

Australia China Business Council president John Brumby says the opportunities are enormous. He is critical of the old Cold War rhetoric coming from military hawks in Washington and Canberra.

Chinese officials have cautiously welcomed Labor leader Bill Shorten’s approach saying a Labor government would not deal with China on a “worst-case scenario” basis.

Vice-Minister Guo Weimin says “business is business” and China’s door is open. You only have to visit the country, especially the accelerated development in the vast Greater Bay Area encompassing Guangzhou, Shenzhen and Hong Kong, to see their preoccupation is to get on with it.

It is in our national interest as well, that they do as Scott Morrison reassured Beijing in a recent speech.

Paul Bongiorno AM is a veteran of the Canberra Press Gallery, with 40 years’ experience covering Australian politics. He visited China as a guest of the Australia China Relations Institute.

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