Are the CCP’s coercion tactics backfiring?

According to Dr John Lee, non-resident senior fellow at the United States Studies Centre, the Chinese Communist Party (CCP) is “digging an Australia-sized hole for itself” by doubling down on its economic coercion strategy.  

Dr Lee argues that Beijing’s “malice” has justified the West’s recent pivot toward Asia, recognising it as the “comprehensive challenge of our times”.

He writes that the CCP’s attempts to force obeisance from Australia by exploiting its trade dependency has been met with unexpected resolve from Canberra.

“Australia is showing that smaller allies have agency and it's no easy matter for China to permanently coerce democracies into subservience,” Dr Lee writes.

The analyst notes at least 150 instances of economic coercion against countries and firms resistant to CCP policy since 2010, with more than half imposed over the past two years — largely aimed at Australia.

“Australia was a seemingly easy target: heavily reliant on exporting minerals, energy, and agricultural goods, with more than one third of every Australian export dollar earned in the Chinese market,” Dr Lee points out.

“This makes Australia the most China-reliant advanced economy in the world from a trading perspective.

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“China has imposed punitive measures against more than a dozen Australia sectors and has cost exporters billions in lost revenue.”

Dr Lee also notes acts of economic coercion against Japan, South Korea, the Philippines, Canada, and the United Kingdom, adding that in many instances, Beijing has sought to deny retribution for CCP policy resistance.

“This artifice allowed Beijing some degree of deniability — even if it was hardly plausible — and decreased the chances of a country attaining a favourable determination against China through World Trade Organization dispute mechanisms,” he continues.

“The allegedly non-governmental basis for punishment also meant additional arbitrary measures could be added on, thereby creating a sense of heightened apprehension in that targeted country.”

According to Dr Lee, Beijing’s denial of political retribution was effective to some extent, allowing pro-Chinese lobby groups within targeted countries to blame their own government for economic mismanagement, and discouraging condemnation in the absence of an official verdict of illegal behaviour from the WTO.  

But Dr Lee writes that Beijing’s recent bullying tactics against Australia suggest that it has “changed the playbook”, with the CCP publicly linking trade policy to political grievances.  

“Many economic punishments were threatened by senior Chinese officials prior to implementation,” he notes.

“The Chinese embassy in Canberra even made the extraordinary decision last November to release a dossier of ‘Fourteen Grievances’ against Canberra as a justification for these punitive measures, including predictable complaints about Australia’s criticism of Chinese actions in the South China Sea and Taiwan.

“Yet most of the grievances concerned domestic Australian policies and legislation such as local foreign investment decisions and banning Huawei from the 5G rollout.”

Dr Lee argues that this has confirmed that the CCP was “taking revenge on Australia” for protecting its sovereignty.

“Beijing now finds itself in a bind,” he adds.

According to Dr Lee, China’s “grand strategy” has been to “dilute the strength” of the United States’ alliances by forcing them to adopt a “more accommodating stance” towards Beijing.

But Dr Lee claims that the “true menace” of the CCP has now been revealed to the international community, and has “hardened the resolve” of nations like Australia to “resist Beijing’s terms”, strengthening “political and psychological preparedness to absorb pain and disruption”.

“This is the opposite of what Chinese coercion is supposed to achieve,” he writes.

“One can take heart that Chinese attempts to groom — or else tame — Australia has failed, but Beijing is hoping the pain heaped on the country will weaken the will of other American allies and partners to show that same courage.”

Dr Lee concludes: “It is why America needs to not only stand by Australia but show it will do the same for others if they find themselves in a similar predicament. Doing that will ensure that the more Beijing lashes out, the deeper the hole it is digging for itself.”

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