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China confirmed a tariff of 80.5 per cent on Australia’s barley exports in May following the conclusion of its anti-dumping investigations. Photo: Bloomberg

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Global Impact newsletter: Australia’s political risks from provoking the dragon that is China

Global Impact is a fortnightly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world
In this third edition we will explore how national sensitivity over the origin of the coronavirus pandemic has led to an escalating war of words and sanctions between China and Australia.

China economy

John Carter

Published: 2:00pm, 13 Jul 2020

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Global politics is delicate business in the best of times, but more so in the midst of a deadly pandemic that has claimed well over 500,000 lives. And, as Australia has learned in the last several months, the politics surrounding the coronavirus pandemic are almost as dangerous as the disease.

The Australian government proposed in April that there be an international investigation into the origins of the coronavirus. After all, figuring out how the virus came to be is an important part of preventing future outbreaks.

But that investigation would have to start with China, where the virus was first detected, and the Canberra government badly underestimated how Beijing would react.

China, fearful that it would be blamed for starting the pandemic after it had already been accused of covering up the initial outbreak, responded by imposing a series of sanctions on Australia in May. The controversy is especially fraught for Australia, given a third of its exports go to China.

This started a rapid deterioration in relations between the two nations. Fast forward to late June and the war of words and deeds intensified, with each accusing the other of espionage.

The situation underscores how China can use access to its huge domestic market to influence important global political discussions and the risks countries take when they deal with Beijing on sensitive issues like the coronavirus.

60 second catch-up

Explainer: Why has the China-Australia relationship deteriorated into what some are calling ‘trade war 2.0’?

Article: Why is China resisting an independent inquiry into how the pandemic started?

Video: Australia-China trade war only 'wishful thinking', says former ambassador Geoff Raby

Deep Dives

As China tensions mount, Australia’s dovish voices fall silent

With Beijing continuing to exert pressure on Australia, voices urging an understanding of China are fading from the national conversation
Observers are not banking on a thaw in relations any time soon given that China now sees Australia as ‘firmly in the US camp’, says an analyst

When Australia first proposed an international inquiry into the origins of the coronavirus pandemic, which would send relations with China to their lowest ebb in years, reaction at home was mixed.

Kerry Stokes, one of the country’s richest tycoons, used a front page interview in the April 30 edition of The West Australian newspaper he owns to warn against poking “our biggest provider of income in the eye”, while mining magnate Andrew Forrest called for any investigation to be delayed.

Read the full story here.

Australia calls China’s envoy over ‘disappointing’ remarks

Trade minister says ‘economic coercion or threats of coercion’ will not change Canberra’s position on the need for an inquiry into the pandemic
Ambassador Cheng Jingye has slammed the move as ‘politically motivated’ and suggested it could have consequences

Australia has called China’s ambassador to the country over his suggestion there would be economic consequences to Canberra’s push for an independent inquiry into the coronavirus pandemic.

Trade Minister Simon Birmingham on Tuesday said Frances Adamson, secretary of the Department of Foreign Affairs and Trade, had spoken to Chinese ambassador Cheng Jingye about his “disappointing” remarks, but he declined to give details of the discussion.

Read the full story here.

07:34

Australia and China cooperation too valuable for 'nonsensical' decoupling

Beijing warns Australia not to penalise Chinese investors with new policy

New foreign investment law will crystallise temporary reforms aimed at ‘safeguarding’ Australia’s pandemic-hit companies from being raided
Australian media reported legal review was aimed at limiting Chinese investment, but Canberra has said it would be ‘country agnostic’

China’s Ministry of Commerce has warned Australia that its new foreign investment policy should be “fair and non-discriminatory” to all countries, amid speculation that it is aimed at restricting investment from China.

The comments, made at a press conference in Beijing on Thursday, came after the Australian government announced last week that it was moving ahead with sweeping changes to its Foreign Acquisitions and Takeovers Act for the first time since it was introduced 45 years ago.

Read the full story here.

Drop ‘Wolf Warrior’ diplomacy, former Australian PM tells China

Malcolm Turnbull, who led Australia from 2015-2018, said Beijing’s bellicose foreign policy was counterproductive and risked alienating potential partners

Canberra wants to maintain good ties with both China and the US, he said, as well as expand relations with India, Indonesia and others in the region

China should draw a contrast with US President Donald Trump by dropping its aggressive rhetoric and “Wolf Warrior” diplomacy to win friends and grow its influence, former Australian prime minister Malcolm Turnbull has said.

In an interview with This Week In Asia, Turnbull, who led Australia between 2015 and 2018, said Beijing’s bellicose foreign policy had been counterproductive, and “moderate language” and consistency would be more effective amid the uncertainty and anxiety caused by the Trump presidency.

Read the full story here.

00:59

China's ‘wolf warrior’ diplomacy counterproductive, says former Australian PM Turnbull

China steps up pressure on Australia with warning to students

Beijing’s advice follows caution to tourists to stay away because of rising racism
China has also limited imports of Australian barley and beef after Canberra’s push for an inquiry into origins of Covid-19 angered Beijing

China has warned students of the dangers of studying in Australia, intensifying its reaction to Canberra’s calls for an investigation into the origins of the Covid-19 pandemic after previously curbing trade and tourism.

On Tuesday the Chinese Ministry of Education issued a warning about studying in Australia, citing the risks from Covid-19 and increasing discrimination against people of Asian descent

Read the full story here.

Australians ‘at risk of arbitrary detention’ in China, government warns

New advice is likely to further unsettle relations already strained by trade disputes, allegations of espionage and the national security law for Hong Kong

Australian government advice for China and Hong Kong remains ‘do not travel’, in accordance with the blanket ban in response to coronavirus pandemic

Australia has issued new travel advice for China warning its citizens they risk arbitrary detention on national security grounds, in a development likely to inflame simmering tensions between Canberra and Beijing.

The Department of Foreign Affairs and Trade on Tuesday updated its website to warn Australians of heightened risks of travel in China. Relations are already strained by trade disputes, allegations of espionage and the new national security law for Hong Kong.

Read the full story here.

01:49

Australia suspends extradition treaty with Hong Kong, offers residency pathway for Hongkongers

Global Impact is a fortnightly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world. Sign up now!

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