Experts point to risks in China's economic bullying tactics

PUBLISHED : Friday, 24 January, 2014, 3:36am
UPDATED : Friday, 24 January, 2014, 3:57am


Mountains of Norwegian salmon left rotting at port. A beachfront resort in Palau abandoned before completion. A sluggish response to a devastating Philippine typhoon: crossing China's "red lines" can have painful economic consequences.

But experts say Beijing's tactical moves towards smaller countries risk backfiring against its broader strategy of building up its political and diplomatic status as a "major responsible country".

Beijing has sought to punish Norway since the 2010 Nobel Peace Prize was awarded to jailed dissident and pro-democracy activist Liu Xiaobo - despite Oslo having no control over the prize committee's decisions. Strict new import controls left Norwegian salmon wasting away in Chinese warehouses, and its market share in the country, once 92 per cent, plummeted to 29 per cent last year.

A musical starring Norwegian 2009 Eurovision winner Alexander Rybak had its tour cancelled, and Norwegians are excluded from the mainland's 72-hour transit visa schemes.

"The 'bully boy' tactics China has adopted, especially with regard to small nations such as Norway … are typical of a passive-aggressive kind of personality," said Phil Mead, a British businessman who helps small Chinese companies in the European market.

Norway is far from the only country subjected to China's wrath. Beijing is embroiled in a South China Sea territorial row with Manila, and after Super Typhoon Haiyan struck last November - the most powerful recorded storm ever to make landfall - it initially offered the Philippines only US$100,000.

After strong criticism Beijing upped the amount to US$1.8 million and dispatched its Peace Ark hospital ship, but the response paled in comparison to Japan's US$30 million, the United States' US$20 million - and even some private companies.

"China lags Ikea in aid to the Philippines," one newspaper wrote, comparing Beijing's initial offer with US$2.7 million from the Swedish furniture chain's charitable foundation.

A year earlier, after a maritime stand-off, China suddenly imposed a raft of restrictions on banana imports from the Philippines, claiming it had found pests in shipments. Tonnes of fruit were left to rot at Chinese and Philippine ports, with losses estimated at US$23 million.

And in 2009, after the Pacific island nation of Palau announced it would accept six Uygur detainees released from America's Guantanamo Bay military prison and considered terrorists by Beijing, construction of a Chinese-backed, 100-room beachfront resort was abruptly halted.

Experts say the "red lines" that trigger such threats and retribution are limited to a tight set of very specific issues. They include relations with the exiled Tibetan spiritual leader the Dalai Lama; criticism of China's leadership or human rights record; territorial disputes in the East and South China seas; Taiwan, which Beijing considers a renegade province; and ethnic unrest Xinjiang , the western region home to the mostly Muslim Uygur minority.

"They have such a small, focused kind of interest, with the Dalai Lama visits in particular," said Dr James Reilly, professor of Northeast Asian politics at the University of Sydney, who has studied China's unilateral sanction use. "China's pretty unique in that regard."