Thorny Australia response to China’s olive branch

 In Wang Xining, China’s deputy ambassador to Australia, Beijing has a fashionably dressed interlocutor fluent in English and not afraid to pursue rhetorical flights of analogy.

In his latest re-emergence in Canberra, he did not disappoint. Talking to the National Press Club, he took off from observing this was the year of the ox, a symbol of strength and perseverance.

“China is not a cow,” he said. “I don’t think anybody should fancy the idea to milk China when she’s in her prime and plot to slaughter it in the end. So we are open for collaboration and cooperation, but we’ll be very strong in defending our national interest.”

Even with Wang taking a shot at Australia for being “the first” to ban Chinese telecom equipment giant Huawei from its 5G mobile networks and then persuading Britain and other security partners to follow suit, it seemed to many at the event that Wang was signaling a response to a lull in Australia’s sometimes shrill warnings about Chinese influence and espionage.

Another sign of lessening prickliness was that Wang was helping launch the latest China Yearbook by the Australian National University’s China in the World Institute, whose scholars have often critiqued the leadership style and policies of President Xi Jinping.

But if this was a slight opening in China’s shut door to Prime Minister Scott Morrison’s government, it didn’t get a matching response.

Indeed, only a few hours later, Foreign Minister Marise Payne announced Canberra was canceling two agreements by Victoria, the country’s second most populous state, to participate in China’s Belt and Road Initiative. She said they were “inconsistent with Australia’s foreign policy or adverse to our foreign relations” but did not elaborate.

Last December, Morrison’s government enacted a new law under the federal powers of the Australian constitution giving Canberra sway over foreign relations and defense. The law requires the Department of Foreign Affairs and Trade to vet all foreign agreements by state governments, local councils and public universities.

This first exercise of that power follows a string of measures that have irked China: a new law in 2017 requiring registration of foreign lobbyists and banning foreign donations to political parties, the 5G ban on Huawei in 2018, a federal police raid on four Chinese state media journalists, and last year’s call for an independent inquiry with “weapons inspector” powers into the origins of the Wuhan outbreak of Covid-19.

The latter was followed by a series of Chinese restrictions on Australian shipments of barley, beef, timber, lobsters, wine and coal amounting to some A$20 billion (US$15.5 billion) in lost exports.

Now, Australian businesses are waiting to see where the next blow will fall. A Chinese Foreign Ministry spokesman said the move would deepen tensions between Canberra and Beijing, and called for it to be reversed.

Chen Hong, a specialist in Australian studies at Shanghai’s East China Normal University who last year had his visitor’s visa revoked by Canberra for unspecified activity, predicted retaliation.

“By using this domestic law, Australia basically fired the first major shot against China in trade and investment,” he told the Global Times, a Beijing state media outlet. “China will surely respond accordingly.”

But where? China’s trade sanctions have been largely countered at a macro-level by a rise in the price of iron ore caused by Beijing’s domestic stimulus measures and continuing supply constraints in Brazil, Australia’s main exporting competitor.

It would take China billions of dollars and some five years to open up the largest alternative source of the steel raw material, the Simandou deposit in the West African nation of Guinea, 650 kilometers from the sea and 40 days sailing from China as opposed to 15 days from Australia’s Pilbara ports.