Week of 6 to 12 September 2021

India takes aim

Per the 11 September Joint Statement from the inaugural India-Australia 2+2 Ministerial Dialogue:

“Ministers … underscored the importance of promoting economic openness and opposing coercive economic practices which undermine the rules based [sic] trading system.”

Quick take:

India joins a quickly lengthening list of countries that have explicitly called out economic coercion in bilateral joint statements with Australia. The group now includes a broad range of Australia’s Indo-Pacific allies and partners: Japan, New Zealand, the United States, Singapore, and France. Although not surprising given Jakarta’s hedged approached to touchstone China policy issues, it is conspicuous that the Australia-Indonesia joint statement issued a couple of days earlier did not include a reference to “economic coercion.” The closest in that statement was: “Ministers noted the importance of open markets and predictable and non‑discriminatory trade and investment in promoting national and regional economic recovery efforts.”

The Australia-India joint statement is yet another example of Australia successfully internationalising its concerns about China’s economic coercion. To be sure, there’s seemingly little chance of Beijing’s coercive practices being deterred by the associated reputational costs. Even when much more pressure is brought to bear on China in the form of sanctions and other punitive measures, Beijing’s typical response is retaliatory countermeasures rather than retreat. But regardless, these joint bilateral statements still stand as testament to Australia’s ability to marshal international support in the face of China’s coercive economic statecraft.

Moreover, and perhaps more importantly, Canberra is likely to be able to put even more diplomatic pressure on Beijing in the coming weeks. For example, the AUSMIN joint statement later this week could deliver similarly strong, if not stronger, language on economic coercion. But there’s an even more strategically significant prize in store. With India now joining Australia in explicitly opposing economic coercion, all four Quad countries are on the record in bilateral statements with Australia on this issue. This may pave the way for a Quad leaders’ joint statement next week that explicitly addresses economic coercion. Although previous public Quad statements (e.g., here and here) have mentioned coercion, they haven’t addressed economic coercion specifically.

Inaugural India-Australia 2+2 Ministerial Dialogue [Marise Payne/facebook.com]

“800 million lifted out of poverty”

The Treasurer Josh Frydenberg speaking on 6 September:

“[T]he re‑emergence of China and its rapidly growing economic weight … has helped to lift more than 800 million people out of poverty and been a major contributor to global economic growth and prosperity.”

The Minister for Trade, Tourism and Investment Dan Tehan speaking on the same day:

“[O]ver 800 million people have been lifted out of poverty as a result of them [the Chinese government] opening up their economy, of joining the World Trade Organisation, of adhering to world rules when it comes to trade.”

Quick take:

The appeal of striking statistics could explain two Australian ministers speaking on the same day using the same number. But the coincidence made me wonder whether something more strategic was afoot. Is Canberra seeking to throw Beijing a diplomatic bone by more regularly using a talking point designed to appeal to the Party-state? It’s difficult to know. But highlighting China’s record of poverty reduction would be near the top of my list of diplomatic manoeuvres if my goal was to thread the needle of simultaneously maintaining a tough line on substantive China policies while also offering a diplomatic olive branch to Beijing. Especially since poverty reduction is a key policy and political priority for President Xi Jinping.

The way in which the Australian ministers framed this statistic also made me wonder whether the message was carefully finessed to appeal to Beijing. The speeches noted that Chinese government actions and China’s economic rise helped lift Chinese citizens out of poverty. As well as giving a substantial portion of the credit for poverty reduction to policymakers in Beijing, this formulation downplays the agency and efforts of hundreds of millions of Chinese citizens who to a large extent “hauled themselves out” of poverty. This formulation with the Party-state as a driving force of China’s economic resurgence is especially noteworthy given the Coalition’s political roots in classical liberalism, which (to put it crudely) takes the individual as its primary unit of both analysis and moral worth. We’re admittedly now deep down in the speculative weeds. So, there’s a very strong possibility that I’m massively overanalysing the significance of this joint ministerial messaging.

But even if citing the 800 million figure was in fact a diplomatic overture, it seems that Beijing wasn’t picking up what Canberra was putting down. Wang Wenbin, the typically more measured (at least compared to Zhao Lijian or Hua Chunying) Ministry of Foreign Affairs (MFA) spokesperson, fired back a day later: “The current difficulties in China-Australia relations are entirely of Australia’s own making. It is imperative that Australia face up to the crux of the setbacks in bilateral relations, abandon the Cold War mentality and ideological bias, respect basic facts, take an objective and rational look at China and its development, earnestly follow the principles of mutual respect and equality when handling bilateral relations.” So, diplomatic stratagem or not, the 800 million figure will need to do some heavy lifting to publicly shift the dial in Beijing.

No room to manoeuvre

Minister for Defence Peter Dutton addressing the American Chamber of Commerce in Australia on 8 September:

“Australia wants a positive and constructive relationship with China, but the onus is now on the CCP [Chinese Communist Party] to demonstrate – through words and deeds – that China will contribute to the Indo-Pacific’s stability, not to continue to undermine it.”

Quick take:

This adds yet more weight to the prognosis that Australia-China relations have reached an impasse. Beijing has long insisted that Canberra needs to change its ways before relations can get back on track. One of the implications of Minister Dutton’s speech seems to be that although Canberra wants a healthy bilateral relationship with Beijing, China must now prove that it’s capable of behaving better. How this call for China to change squares with Minister Tehan’s patient and longstanding efforts to foster “constructive engagement with the Chinese Government” remains to be seen. Regardless, MFA spokesperson Zhao retorted a couple of days after Minister Dutton’s speech: “The responsibility for the current difficulties in China-Australia relations rests solely with the Australian side.” Clearly, neither Beijing nor Canberra has an appetite for compromise.

As always, thank you for reading and please excuse any errors (typographical or otherwise). Any and all objections, criticisms, and corrections very much appreciated.