One of the most significant changes in the world in the past 30 years is the opening of China to the outside world and its engagement with that world. In the initial years of the opening, external forces influenced China’s economy, regional balances, bureaucracy, as well as the political authority of local leaders in the coastal areas. More recently, the world is feeling the effects of a rising China which seeks resources and talent from all around the globe and uses its financial wealth to strengthen its position in the world. This course tracks the opening of China up from 1978 until it joins the WTO, focusing on how the world affected China’s internal development. We then look at various aspects of China’s “going out strategy” — its search for energy, talent, as well as its relations with the United States and the states within the Asia-Pacific region. The instructor has been deeply engaged in research on all these topics, having lived in China during various stages of China’s opening to the outside world. Course Overview video: https://youtu.be/7FpNL67EbE4
3.9 Case Study: Australia’s Quixotic Policy Towards China – Trade’s Strategic Significance
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Из курса от партнера The Hong Kong University of Science and Technology
Chinese Politics Part 2 – China and the World
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The Hong Kong University of Science and Technology
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Module 3: China’s Global Search for Energy and Resources
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David ZweigChair Professor of the Division of Social Science and Director of Center on China’s Transnational Relations
[MUSIC]
Continuing this case study of Australia,
I would argue that what you find is a kind of quixotic policy towards China.
It really shifts very quickly, but
the bottom line is that trade does have some strategic significance.
Now in 1999, when Bush was still running for President.
His top Asian adviser made an important statement warning Australia
that the US expected the Australians to support the US militarily
if the US found itself in a conflict with China over Taiwan.
And he even threatened in some ways by saying otherwise the entire defense
relationship would have to be reconsidered.
China on the other hand warned Australia, a very serious consequences
if Australia sided with the US in a conflict over Taiwan.
And Yan Xuetong, who I've quoted before from Tsinghua University,
wrote in the China Daily that China really favored tighter regional relations
with Australia as a way to defuse what they called international
hegomonism by the US which means the US trying to bully and push everybody around.
And that this would help cut into the United States influence in Australia.
Now, in the Howard government which was in the mid 2000s China got some benefits.
They were able to reap some benefits of their economic success and
their close economic ties to China.
When his conservative government generally was not very supportive
of some efforts within the Bush administration to contain China.
In 2004 the Foreign Minister Downer
had gone to meet Prime Minister Wen Jiabao in Beijing.
And when he came out of that meeting, he said that Ansus, the security treaty,
defense treaty did not commit Australia to help the US in a fight over Taiwan.
Well, the US Deputy Secretary of State Richard Armitage,
he wasted no time and he blasted Downer and
he force powered to rebuke Downer and say that that's not just acceptable.
But the Chinese saw an opportunity here to turn Australia
into what one columnist David Uren called another France,
which is a US ally, who's just not so close on strategic issues.
And so they sent a very experienced diplomat,
Madam Fu Ying, as the ambassador, and
gave her the task of trying to pry Australia away from the US.
Now in this period of 2004, 2006, China got a few successes.
One of the very important ones not strategic, but
at least it was kind of has global implications is that
Prime Minister Howard gave China market economy status.
Which really means that when legal attacks when
China is attacked at the WTO for dumping that is,
for selling products overseas as prices below domestic costs,
that China cannot be accused of that if it is a market economy.
Also during the 2006 visit by Condoleezza Rice,
the National Security Council Advisor, Australia pushed back a little bit.
She made a speech in Japan talking about some degree of containment of China
and they pushed back.
And they expressed a much lower level of threat from China and
in fact when Condoleezza Rice came out there
was suppose to be a meeting of the quadrilateral group.
What are called the Quadrilateral Talks which links up Japan,
India, Australia and the US.
And Australia decided at that point that it would not participate.
I just want to mention here, you can notice at the top of this,
when Australia gave China market economy,
the US was very active in opposing that.
And put enormous pressure on Australian businessmen and
large companies pulled them into Washington DC and
tried to get them to put pressure on the Australian government not to do that.
More success in 2013, as the Australian Defense Minister Vargas said that,
quote Australia does not want to be put in a position
where we have to choose between the United States and China.
That means that someone's putting them in that position, perhaps the United States.
And he presented a very benign, a non threatening view of China's military rise.
Which is presented, you have to understand is in contradiction or
contradistinction to what had happened 2009.
When the Australians wrote a very strong white paper and talked about
threats from an unnamed source coming down through the South China Sea.
But here he says China has every right
to seek greater strategic influence to match its economic weight.
The extent to which this can be peacefully accommodated will turn
ultimately on both the pattern of China's international behavior and
the extent to which the existing international order.
And we should read that the United States, intelligently finds more space for China.
When this is a reasonably strong position now in Australia
that the United States needs to back off and
give China room to expand within the region as its economy grows.
And during its 2013 trip to China,
Prime Minister Gillard strengthened military ties with the army.
She established a strategic dialog, actually three with the prime ministers,
the foreign ministers and then the finance Ministers.
And again a kind of victory for China in terms of it's
desire to take a stronger position within the global economy,
they established a Renminbi Australian dollar swap.
Which meant that they didn't have to go through US dollars,
they could go back and forth.
Which means that the RMB is now treated as a reserve currency and
this was an important victory for China.
Now, taking a step back a little bit, it hasn't always been so good and
easy for China as I mentioned.
There have been different kinds of push-backs.
And here, we can look at a government push-back,
where in 2009 around the same time that you had a tougher
white paper on security coming out of the Australian government.
Here we saw the treasurer man name Swan tighten control over inbound
foreign direct investment projects by the foreign investment review board FIRB.
And they have to approve projects of large scale investment projects,
foreign investment projects into Australia.
And these new rules increased the latitude, the ability to block
investments by foreign state owned enterprises or
sovereign wealth funds based on what would be considered
to be the government's perception of Australian national interest.
Now these rules mentioned no specific country,
no specific state owned enterprise or no specific sovereign wealth fund.
But many people perceived this as targeted at China.
And China actually sought that way.
And then unfortunately for the Australians and the Americans in September,
a couple of months after this Wiki leagues that insidious leakage of cables and
discussions between governments.
Quoted the head of the foreign investment division of the treasury department,
the head is also a member of FIRB of the Foreign Investment Review Board.
Telling the US diplomats that the new rules were actually aimed
at China to pose new disincentives for larger scale Chinese investments.
So the Australian government in 2009 was trying to slow
down investment, large scale investment into Australia.
But overall except for one deal from Huawei,
the government has not step in and stop any investments.
The bigger problem that works out now for
China is actually resistance from society.
As I mentioned before democratic people and democratic societies often get very
nervous when large scales state on enterprises come in.
And here in terms of Coal-Seam Gas, so
looking for Coal Gas within the cracks under
the ground between 2012 and spring 2013 Petro-China started five new
efforts to buy rural land in Queensland State to drill for this Coal-Seam gas.
And the farmers, conservative people and
green groups, the, for the liberal living in the city,
they worried about the drilling on the subterranean structures.
And they brought together an alliance of what one journal is called the latte
sipping elite and the landlord to oppose China's engagement in rural land.
And in early 2013, 500 land owners rallied against Chinese investment forcing
as well the New South Wales government to rescind approval for Coal-Seam projects.
And demand more scientific information
by the federal government which is just a delaying tactic.
Now, I show you this slide which is based on a survey done by the Lowi Institute
in Sydney Excellent Research Institute.
And the question was overall, do you think that the Australian government is?
And then the choices are allowing too much investment from China,
allowing the right amount not allowing enough.
And as we can see from 2009 through 2012 the people thinking
that it's allowing to much investment from China actually went up 6%.
And the number of people thinking that it's just about right actually went
down 5%.
And that shows that more than half the people in Australia,
believe that the Australian Government's allowing too much investment from China.
Now to conclude this case, China has been able to use it's economic influence to
gain some important policy concessions, particularly economic ones.
And also they've gotten access to resources,
but it's been not without some difficulties.
Their leverage on Australia's strategic thinking has had some shifts as more and
more people have talked about the need for the US to give china some room.
But each time the united states has spoken out about the need for
closer ties the Australians have responded.
Though China has these conversations with Australia,
it certainly has made the job for the United States a little more difficulty.
And so in the end you can say China has not really pried
Australia away from its US security links.
But it has made Australians think about maybe that the us needs to
create a little bit more space.
Now as a final discussion point for this module.
How do you explain the different relationships?
We've seen three cases.
We've seen Iran, Angola and Australia.
And in some ways the relationships are different.
And how do you explain the different relationships between China and
these three countries in our case studies?
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