Relations between China and Australia are degenerating so rapidly it’s hard to know where to look. Symptoms of strain are breaking out all over, and there are still few indications that our government has any idea of how to stem the bleeding, let alone to begin improving relations. China watchers are alarmed at how bad things have got, such that it’s hard to find a single expert willing to predict anything other than years in the hurt locker for Australian exporters and diplomats. The plain evidence is that the imposition of barriers and tariffs on Australian goods is coordinated from the top level of Chinese government, and will not be reversed any time soon. Australian ministers can’t even get a phone call with their Chinese counterparts, and diplomatic relations have descended (partly thanks to our own PM) into online slanging matches. One would think that, if you were planning to engage in angry megaphone diplomacy at 10 paces with your biggest trading partner, you’d have a plan to deal with the fallout. But, alas, plans to find new markets to replace those lost in China are still years away, and our government MPs are still intent on chest-beating.

Writing in The Australian this morning, LNP senator Matt Canavan proposed that Australia respond to Chinese pressure by applying a levy on exports of iron ore to China, “because it cannot easily replace our supply”. China gets about 60 per cent of its iron ore from Australia (worth $85 billion last year), in volumes that could not be covered by other countries.

“China’s trade action has already caused massive economic harm to our beef, barley, seafood and wine industries,” Canavan wrote. “To avoid further harm we need to make the Chinese Communist Party pay a price because that will be the only thing that will stop further trade restrictions.”

His proposal, bound to be inflammatory in Beijing, was immediately ruled out by his successor, Resources Minister Keith Pitt, with the classic put-down: “Backbenchers are entitled to their views; we work under the rules-based trading system and Australia will meet its commitments.”

Iron ore is the one card up Australia’s sleeve. China needs it – for defence purposes, for its manufacturing and construction, in short for many major industries that its economic health and security rely upon.

As usual, though, threats by Australia made via brash public statements are unlikely to help anyone. It’s not like the Chinese government was unaware it relied on Australian ore. 

Meanwhile the ABC reports that, from December 31, foreign buyers (read: Chinese buyers) will face even more scrutiny when bidding for sensitive assets in Australia. In March, the Morrison government ruled that every foreign investment bid for an Australian asset must be screened by the Foreign Investment Review Board (FIRB), and Chinese bids have reportedly all but frozen since the changes were introduced. With Australia recently blocking the Chinese purchase of a major dairy producer, for no obvious reason, it’s no wonder the temperature in Beijing is rising. Needless to say, Australian exporters of wine, seafood, barley, coal, timber, lamb, beef and wool stand by, dreading the next blow. Universities must also be looking at their bottom lines as they wonder how many Chinese students will return to our shores.

But Xi Jinping’s government is not for turning, and it will wear the extra cost of our ore if it needs to. How long can Australia bear the cost of the trade war?

Finally, in The Australian this morning, it was also revealed that Australian, British and US consulates in Shanghai have been “infiltrated” by Chinese Communist Party members “employed as senior political and government affairs specialists, clerks, economic advisers and executive assistants”. 

A leak of official membership records (“the first in the world”) exposed details of 1.95 million CCP members, “including their position, birthdate and ethnicity, after being extracted from a Shanghai server by whistleblowers”.

Here is one of the nubs of the problem for Australia: with nearly 100 million members, the Chinese Communist Party includes most people of influence in China, and most who are ambitious and interested in public affairs generally. Are we to tar them all as “infiltrators”? 

The first step to righting the relationship will be to tone down the attitude, stop clutching for tough-guy headlines, and quietly work towards understanding who we’re dealing with. As it stands, things are set to get worse before they get better.

---

GOOD OPINION A bad year for the hard right “Whether it is support for Trump or opposition to tough measures to control the virus, the hard right has been brought down to earth in 2020. Is climate change next?” The Australian Peter van Onselen lists the many reasons why 2020 was a bad year for some of his colleagues, the “same geniuses” who downplayed the seriousness of the coronavirus, turned a blind eye to Trump’s attempts to destroy American democracy and continued to deny the need to act on climate change. BAD OPINION In the mood for brutality “I’m right in the mood to f***ing lose my job tonight.” ABC News Footage obtained by the ABC shows a police officer grabbing, shoving and verbally abusing a teenage boy in the Alice Springs watch house, before threatening to “belt the f*** out of” three others. John Hewson on what’s wrong with politics Scandal after scandal has battered the authority of the government and diminished the trust the public has in our democratic institutions. Today, former leader of the federal Liberal Party John Hewson on how rorts, mates and marketing took over politics, and how we can take it back. LISTEN NOW The Number $8 The hourly pay commonly offered to migrant workers in New South Wales, according to an analysis of more than 3000 foreign-language job ads that shows systemic underpayment is rife. Nine Media The Policy Subsidies for oil refineries “New taxpayer-funded subsidies for Australia’s remaining oil refineries will be urgently brought forward to January 1 as international travel bans gut fuel demand and send the domestic industry spiralling towards plant closures and job losses.” Nine Media The federal government will fast-track payments of a minimum 1 cent for each litre of petrol, diesel or jet fuel produced by major domestic refineries that are continuing their Australian operations. The list   Music Ready steady gone “Popular music has always had a complex relationship with the fact of death, not least because it has been the premier art form of the young, and not least because extraordinary fame has been a means by which deceased musicians – especially those who die young – linger in the afterlife of our collective memory. John Lennon may be dead, but he will always be John Lennon: the one whose fraying voice on ‘Twist and Shout’ remains as sore and as vital as the day it was recorded.” The Monthly Art ‘Unfinished Business: The art of Gordon Bennett’ at QAGOMA “Bennett’s body of work is linked by visual motifs, appearing both within and across different series of works. Captain Cook reappears. So do Basquiat-style cartoon faces with large teeth displayed inside drawn-black lips: do they portray anger or suffering? And so, too, does Afrofuturism’s ‘black angel of history’, an ominous play on both Paul Klee’s Angelus Novus (1920) and the powerful critique of history (the histories written by the victors) by German philosopher Walter Benjamin, the first owner of Klee’s work. You see how the mind cannot stop when confronted by Bennett’s work.” The Monthly News The Liberal minister forcing action on climate change “When Matt Kean was made minister for Energy and Environment in the New South Wales government last April, he says, his first thought was: ‘I must have upset the premier. What have I done?’ He was only half joking. While he was ‘excited’ at the opportunity to make his mark in the new portfolios – he has had a lifelong concern for the environment and his father worked for decades in the energy sector – Kean was also ‘filled with trepidation’.” The Saturday Paper