As I see it | Why China sees Australia as an obvious target for its punitive economics

China’s trade war against Australia has shown another side of Beijing’s increasingly assertive diplomacy. While it is deft at using financial inducements to advance its interests and expand its influence, China also knows the power of its economic retaliation and does not hesitate to use it on the global stage.

It probably should not come as a shock that Australia, which China’s nationalist tabloid Global Times labelled as “the most unfriendly country besides the United States”, has been targeted by Beijing’s diplomatic and economic sanctions.

From China’s perspective, Australia is the weakest link in the US-led “Quad” security bloc – also consisting of India and Japan. Amid growing fears about an expanding anti-China coalition in its backyard, Beijing has decided to act to prevent the emergence of an “Indo-Pacific Nato”. Australia is an obvious target, especially when China is already at loggerheads with India and Japan over long-running territorial disputes in the midst of its adversarial rivalry with the US.

Although China remains the top trading partner for all the four countries, even after the coronavirus pandemic, Canberra’s economic dependence on Beijing has left it particularly vulnerable to Beijing’s coercive retaliation.

Bilateral trade surged to US$159 billion last year and China accounts for about 40 per cent of all exports from Australia, after the signing of a free-trade agreement in late 2015 that lowered Chinese tariffs on its agriculture, dairy products and wine.