Morrison’s big challenge with China

The Coalition government went into the election with a “China problem” and, despite Scott Morrison’s constant talk of a so-called “reset”, it still has one.

Ultimately, Beijing believes that Canberra should be more solicitous of its major trading and exports partner, but Australia is still struggling to find a fresh approach to the country while maintaining its main strategic alliance with the United States. The US is diving deeper into a trade war with China, and any deal seems further off than it was when the Australian election campaign began a month ago.

In case that wasn’t enough tension: Beijing was clearly hoping for a Labor win. Chinese social media site WeChat was flooded with pro-Labor posts, many of which reportedly originated from accounts affiliated with the Chinese Communist Party (CCP). This message was clear in state-run media too. On May 20, the nationalistic tabloid The Global Times ran a piece titled “Will Coalition win benefit China-Aussie ties?”:

We believe some Western countries, including Australia, need to ditch the outdated Cold War mentality and embrace a more pragmatic, constructive and mutually beneficial approach in dealing with relations with countries like China.

Bad blood

Morrison was a senior member of Malcolm Turnbull’s cabinet — as was his presumptive foreign affairs minister Marise Payne and home affairs minister Peter Dutton, who now has purview over Australia’s security agencies — when things began turning sour from Beijing’s point of view. 

Australian security agencies are very, very wary of China and the Turnbull government was responsible for the introduction of laws banning foreign political donations (Chinese businessmen had been hefty donors) and new foreign interference laws. In his last act as PM, Turnbull banned Chinese telecoms companies, led by Huawei Technologies and ZTE, from Australia’s 5G mobile networks. Australia then actively lobbied its anglophone Five Eyes intelligence sharing network to do the same.

It was also Morrison who announced an extra $3 billion to be pumped into the South Pacific in early 2019. This was in belated recognition of China’s increasing influence in the region — a region which has traditionally seen Australia and New Zealand do the heavy lifting on aid and security. 

This was explicitly mentioned in the Global Times piece:

It is deceitful that some countries attempt to disparage China’s aid programs and BRI-related infrastructure projects in South Pacific nations, or even to coax and coerce some island nations’ governments to edge out China’s business engagements there.

Furthermore, former spymaster David Irvine — who has headed both ASIO and ASIS, and who also served a term as ambassador to China — was appointed by Turnbull and then-treasurer Morrison to head the Foreign Investments Review Board (FIRB) in April 2017. He has taken a tougher line than his predecessors. Under Irvine, FIRB has recognised the truism that the line between “state” and “non-state” enterprise in China is so blurred as to be impossible to discern.

The leadership of China’s ruling Communist Party has not liked this at all. During the past years of Coalition administration, a narrative has emerged that China is trying to influence Australian academia, politics and business. Beijing figured it may get an easier ride with a Labor government, no doubt encouraged by some vague cooing noises from Bill Shorten and the extraordinary entry into the campaign by Paul Keating (a long-time adviser to the China Development Bank). Keating attacked Australia’s security chiefs as “nutters” and said:

I think a Labor government would make a huge shift, just merely making the point that China’s entitled to be there, rather than being some illegitimate state that has to be strategically watched.

Keating has had able assistance in his pro-Beijing stance in recent years from former Labor foreign minister Bob Carr, now widely nicknamed “Beijing Bob”. Unfortunately for China, this didn’t matter in the end.

Where to from here?

Morrison’s problem is now what to do, if indeed there is anything that can be done. If he chooses to redress perceived wrongs, his task has been made significantly more difficult by having three foreign policy-based departments (the Department of Foreign Affairs and Trade, Defence and Home Affairs). Defence and Home Affairs are, instinctively, more wary of China than DFAT. Still, this may change with party heavyweight Christopher Pyne retiring and Linda Reynolds slated to take over the defence portfolio. 

But Canberra’s fears about Chinese influence and cyber-spying are well founded, and it has a rapidly growing number of significant allies in what can only be described as the war against Chinese tech companies. Last week Donald Trump declared a national emergency that effectively bans Chinese tech companies like Huawei and many are saying officially announces the beginning of a technology cold war. Last month Japan confirmed its move to ban Huawei from its 5G networks and Vietnam has also announced that its military-controlled state-run telco Viettel will develop its own 5G chips with the help of European partners, also excluding Chinese firms.

The silicon curtain, as it were, has fallen.

With Huawei and the now immutable foreign interference laws remaining the sticking points, Beijing’s belief that it would have had a better deal with Labor may have ultimately been unfounded. After all, it was under the Rudd Labor government that the first ban on Huawei was instituted.

Yes, Morrison now has a mandate to shape a new China policy. But it’s hard to see, practically, how he can reverse any decisions that have been made by successive Coalition governments or, indeed, if he would want to.

What do you think needs to be done to improve China-Australia relations? Send your thoughts to boss@crikey.com.au. Please include your full name.