Abbott sees the light on China as reality crushes trade enlightenment fantasy

At least Tony Abbott is prepared to admit he screwed up: what he once boasted as a “history making” trade deal with China, and one of his great achievements as prime minister, was a mistake based on “wishful thinking” and a “very benign view” of China.

Similar mea culpas haven’t been forthcoming from the Coalition’s stenographers and cheerleaders, alas. Paul Kelly has never admitted he was wrong in lauding the deal as a “moment of transformation” of global significance, pointing the way to a “glorious future” in which an “astute Xi” would “pull Australia far closer into China’s orbit in coming years”. Greg Sheridan, who lauded the deal and insisted “there is not the slightest evidence that any Australian tradie would be a loser under this agreement”, was a leader of the Coalition/News Corp campaign against Labor for daring to question the deal — to question any aspect of the agreement with China was xenophobic and protectionist.

News Corp and the government now insist exactly the opposite, that Labor is too soft on China — indeed, had fallen into China’s trap, in the words of an Australian editorial in December. Sheridan’s reversal has been particularly risible. In September 2015, he was lauding Daniel Andrews to the high heavens for defying federal Labor’s opposition to the trade deal. Last year he was complaining that Andrews had handed China a propaganda victory for signing up to a Belt and Road agreement.

Sheridan isn’t the only one at the Oz to undertake a humiliating reversal — the editorial writers have gone from declaring “under ChAFTA we welcome Chinese investment in Australia” to cheering the government’s blocking of Chinese investment.

The Australian entirely reversing its position to keep attacking Labor is of course all part of what Kelly rightly calls its “working rule”, that “centre-right newspapers back centre-right parties”. But Abbott’s comments, reported by Nine’s Latika Bourke, are worth exploring a little more. The former prime minister says he was naive in thinking that there would be “not just economic, but political liberalisation in China”, and that “I think the Chinese government and its actions have changed”.

And that’s the standard excuse now offered by those who once cheered for the trade deal: that the mask has now come off, that the Xi regime has shown its true colours, that it was always an aggressive dictatorship determined to impose its will externally, but now it is making no effort to hide it.

The argument is self-serving rubbish — the brutal nature of the Chinese Communist Party was always apparent. Its external aggression was always apparent. Australia was already complaining about China’s large-scale annexation and militarisation of islands in the South China Sea well before the trade deal. It was already beset by Chinese hackers — it was Chinese hackers who broke into Parliament House’s email system in 2011. But its aggression and brutality were readily overlooked because of the lucrative opportunities of access to Chinese markets dangled by its government — for which the likes of Kelly and Sheridan fell hook, line and sinker.

But Abbott also refers to the persistent argument — first heard in the ’90ss from the Clinton administration — that economic liberalisation would inevitably lead to political liberalisation. China is now exhibit A in why that thinking is utterly fallacious. But it always represented a triumph of neoliberal fantasy over common sense. For neoliberals, freedom has magical powers that can change economic and political structures. And freedom can’t be stopped, or confined — once people enjoy it in one sphere, they demand it in another. The obsession with freedom always made neoliberalism as much a moral as a political philosophy — and drove Western belief that the Chinese regime would be just another domino to fall to the triumph of free markets and neoliberal wisdom.

But there never was any special relationship between freedom and neoliberalism. The world’s corporations generally don’t like freedom. They prefer their workers un-unionised and without rights. They prefer opacity and secrecy for their financial transactions. They prefer oligopolies and monopolies over the brisk environment of competition. They prefer influencing and dictating government policies rather than allowing electorates to do so. Their idea of the rule of law is being able to buy legal outcomes through relentless, expensive litigation against under-resourced opponents.

Right now the Xi regime is cracking down on private education providers, along with tech companies, food delivery companies and property developers — along the way inflicting US$1 trillion in losses on investors, who are now wondering where the crackdown will end. It seems counterintuitive to investors that the Chinese government would inflict such colossal losses on investors in the name of political objectives. In fact, investment, markets and profits were always secondary to the maintenance of the party’s control. And that’s always been clear, even if some one-time Sinophiles now profess to have seen the light.