Chinese ambassador redoubles threats, as nation juggles ‘new normal’

Australia has enjoyed a record setting three decades of uninterrupted economic growth buoyed by the voracious appetite of a growing China. However all good things come to end as the political, economic and strategic competition between the US and China enters a new phase placing both the global and Australian economies in a precarious position.

Additionally, the global and regional fall out of the COVID-19 pandemic, combined with Beijing's recalcitrance when it comes to accepting responsibility for the impact of the wet markets seemingly responsible for the global outbreak have served as a major flashpoint between the rising superpower and Australia. 

Further compounding these emerging challenges is the growing period of economic and strategic competition between Japan and South Korea, equally important US and Australian allies, which have long-standing, robust links to Australia's economic security.

As this vortex of competition continues to devolve into a game of economic brinkmanship, resulting in trade tariffs and hindered supply chain access, many within Australia's political, economic and strategic policy communities have sought to redouble the nation's exposure to volatile and slowing economies. 

Australia's earliest economic and strategic relationship with the British Empire established a foundation of dependence that would characterise all of the nation's future economic, defence and national security relationships both in the Indo-Pacific and the wider world.

As British power slowly declined following the First World War and the US emerged as the pre-eminent economic, political and strategic power during the Second World War – Australia became dependent on 'Pax Americana' or the American Peace.

The end of the Second World War and the creation of the post-war economic and strategic order, including the establishment of the Bretton Woods Conference, the International Monetary Fund and the United Nations, paved the way towards economic liberalisation and laid the foundation for the late-20th and early-21st century phenomenon of globalisation.

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While the collapse of the Soviet Union and the end of the Cold War cemented America's position as the pre-eminent world power, the COVID-19 pandemic has shed light on the shortfalls of globalisation and increasingly precarious global supply chains, largely dominated by Beijing, which has stepped up its predatory economic, political and strategic grey-zone warfare against both Australia and regional partners. 

The changing economic order

The post-Cold War period was relatively short-lived as costly engagements in Afghanistan and Iraq, peace-keeping interventions in southern Europe and enduring global security responsibilities have drained American 'blood' and 'treasure' – eroding the domestic political, economic and strategic resolve and capacity of the US to unilaterally counter the rise of totalitarian regimes and peer competitors in both China and Russia.

For example, since the white paper was released, China's share of global GDP has risen from 15 per cent to 20 per cent, based on purchasing power parity. India, the region's other emerging economic and industrial powerhouse, has seen its share of the global economy double from around 4 per cent to 8 per cent since the beginning of the 21st century, however the economic rise has given way to growing geo-strategic designs and competition throughout the region and is serving to unpick the fabric of the post-Second World War order.

From the South China Sea (SCS) to the increasing hostilities between India, Pakistan and China in the Kashmir region of the Himalayas, the Indo-Pacific's changing paradigm, and growing economic, political and strategic competition between the US and China. 

Continued sabre rattling and challenges to regional and global energy supplies travelling via the Persian Gulf, and an increasingly resurgent Russia all serve to challenge the global and regional order, this is particularly the case as recent confrontations in both the Middle East and Southeast Asia serve to exemplify. 

In response to these factors, combined with the increased rhetoric out of Beijing, many within the Australian public, media and political spheres have expressed concerns about Australia's economic dependence on China and the growing influence Beijing asserts domestically, at a time when their blatant disregard for global safety and economic stability seems to have flown out the window. 

Enter, Beijing's ambassador to Australia, Cheng Jingye who has redoubled the rhetoric of Beijing to place increasing pressure on Australia to "fall into line" and stop questioning Beijing's narrative for fear of catastrophic economic repercussions across sectors heavily dependent upon China's voracious appetite. 

These threats are particularly targeted at Australia's raw materials, resources, energy and agricultural products and the services orientated aspects of the national economy, namely tertiary education and real estate. 

Cheng echoed sentiments out of Beijing regarding Australia's response to COVID-19, telling The Australian Financial Review: "It's a kind of pandering to the assertions that are made by some forces in Washington. Over a certain period of time, some guys are attempting to blame China for their problems and deflect the attention.

"So what is being done by the Australia side? The proposition is a kind of teaming up with those forces in Washington and to launch a kind of political campaign against China. The Chinese public is frustrated, dismayed and disappointed with what Australia is doing now.

"I think in the long term ... if the mood is going from bad to worse, people would think 'Why should we go to such a country that is not so friendly to China? The tourists may have second thoughts. The parents of the students would also think whether this place which they found is not so friendly, even hostile, whether this is the best place to send their kids here.

"It is up to the people to decide. Maybe the ordinary people will say 'Why should we drink Australian wine? Eat Australian beef?" 

These statements echo similar comments made by Chang from late-2019 where he moved to remind "Australia who pays its bills" in a special interview with The Australian, during which Jingye reaffirmed China's commitment to "peaceful development" and a peaceful Chinese rise in the Indo-Pacific. 

Despite the seeming benevolence of the Beijing's messaging, Chang was quite pointed in his commentary about Australia and its economic dependence on China, stating:

"You have been talking about your continuous economic growth, for the past 28 years. You have talked a lot about your trade surplus. It seems sometimes, some people forget what are the reasons behind that. China’s growth and the co-operation between China and Australia in trade, economic and other areas, is a major factor in that growth." 

This pointed reminder of who pays who's bills is poignant for Australia's public policy makers, particularly regarding the nation's seeming over exposure to the Chinese economic miracle, placing it at an immense precipice, needing to pick between the US as Australia's strategic benefactor and China, the nation's primary economic partner. 

What this fails to account for is that China's own economic growth and prosperity is equally dependent upon Australia's continuing benevolence in trading matters. 

Nevertheless, Australia's seeming over exposure requires a course correction, but how does the nation achieve this? 

Your thoughts

The nation is defined by its relationship with the region, with access to the growing economies and to strategic sea-lines-of-communication supporting over 90 per cent of global trade, a result of the cost-effective and reliable nature of sea transport.

Indo-Pacific Asia is at the epicentre of the global maritime trade, with about US$5 trillion worth of trade flowing through the South China Sea and the strategic waterways and chokepoints of south-east Asia annually.

For Australia, a nation defined by this relationship with traditionally larger, yet economically weaker regional neighbours, the growing economic prosperity of the region and corresponding arms build-up, combined with ancient and more recent enmities, competing geopolitical, economic and strategic interests, places the nation at the centre of the 21st century's 'great game'.

Enhancing Australia’s capacity to act as an independent power, incorporating great power-style strategic economic, diplomatic and military capability serves not only as a powerful symbol of Australia’s sovereignty and evolving responsibilities in supporting and enhancing the security and prosperity of Indo-Pacific Asia. 

Shifting the public discussion away from the default Australian position of "it is all a little too difficult, so let’s not bother" will yield unprecedented economic, diplomatic, political and strategic opportunities for the nation. 

Get involved with the discussion and let us know your thoughts on Australia's future role and position in the Indo-Pacific and what you would like to see from Australia's political leaders in terms of shaking up the nation's approach to our regional partners, and the avenues Australia should pursue to support long-term economic growth and development in support of national security in the comments section below, or get in touch with This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..