Week of 29 November to 5 December 2021

The subnational face of foreign policy

Stuart Ayres, NSW Minister for Jobs, Investment, Tourism and Western Sydney and Minister for Trade and Industry, on the NSW-Guangdong relationship:

“NSW’s relationship with Guangdong Province is one of our state’s oldest and strongest trade relationships. We recently unveiled an ambitious plan to double our exports globally by 2030, and we look forward to China continuing to play a significant role in this goal.”

Quick take:

As a wide range of diplomatic, economic, and political metrics make plain, the relationship between Beijing and Canberra is strained. So much so that the last publicly reported instance of ministerial-level contact was January 2020 (although working-level diplomatic contact continues). Despite these gloomy atmospherics at the national level, political ties between NSW and Guangdong seem to have remained relatively strong. Indeed, given the stalled national relationship, the recently concluded NSW-Guangdong Joint Economic Meeting (JEM) might now be the highest-level political contact between the Chinese and Australian systems. (Please correct me if I’m wrong on that.)

To be sure, the 2021 JEM occurred with lower-level representation and significantly less fanfare than previous iterations. For example, both former NSW Premier Gladys Berejiklian and Guangdong Governor Ma Xingrui attended the 2017 JEM and signed a Joint Statement. By contrast, the NSW Premier didn’t participate in the 2021 JEM (although the NSW Governor Margaret Beazley did), while the Guangdong side was represented by Vice Governor Zhang Xin. Just as this could reflect the creeping impact of the frosty national relationship on subnational ties, it could also be partially explained by COVID-19 travel restrictions. Regardless, the simple fact that the meeting occurred at all is a feat considering the freeze in Australia-China political ties at the national level.

This rare instance of political contact makes me wonder whether the federal government might seek to gain additional indirect access to the Chinese system via state and territory governments. In particular, could state and territory premiers, chief ministers, and ministers engage the Chinese government (albeit at the provincial level) on federal government priorities as a way of circumventing blockages in national government contact? Admittedly, such an approach might already have been pursued. And even if it hasn’t, it’s likely to face challenges. Not only might raising national government priorities in a forum like JEM jeopardise that kind of state-to-province political contact, but it’s not entirely clear what raising Canberra’s concerns with a Vice Governor would achieve. Such a quasi-devolution of Australian foreign policy would also sit oddly with the centralising tendency of the Foreign Relations Act. These complications notwithstanding, the ongoing freeze in political contact at the national level may still make more coordination on foreign policy priorities between the federal government and states and territories worthy of further consideration.

An Australian-style Magnitsky Act

Victorian Liberal Senator James Paterson speaking on 1 December about the Autonomous Sanctions (Magnitsky-style and Other Thematic Sanctions) Amendment Bill 2021:

“I am particularly pleased to see a uniquely Australian innovation in this version of a Magnitsky act. For the first time ever in the world, our act will equip us to target not only those who abuse human rights or engage in seriously corrupt conduct but also those who threaten our national interest in the cyber realm. This will become an increasingly important tool to help shape and deter our adversaries.”

Quick take:

Interventions on the Bill in the Senate made few references to China. But Beijing’s actions were clearly front of mind. Some Senators framed the Bill as not just a means of targeting human rights abusers, but also a means of strengthening the rules-based international order and responding to the perceived threat of authoritarianism. As Senator Paterson put it: “It is time democracies had the ability to push back and enact a real and personal cost for those who abuse human rights and seek to reshape the international rules-based order from one that respects the freedoms of the individual to one where the [sic] power can be exercised without any restraint.”

Given the way in which these challenges are typically framed in contemporary Australian political discourse, it’s hard to read them as anything other than thinly veiled references to—among other states—China. Moreover, the combination of this political framing with the inclusion of “malicious cyber activity” within the scope of reforms makes it likely that targeted sanctions will be directed at Chinese officials. As per recent Australian attributions and cyber threat assessments, Beijing’s actions in cyberspace are a prime concern for Canberra. So, the newfound ability of “Australia to sanction individuals and entities responsible for, or complicit in … malicious cyber activity” seems most likely to be used against Chinese officials.

If targeted sanctions against Chinese officials are coming through the pipeline, when might they be introduced and what would the impact be? Canberra would presumably prefer to introduce such targeted sanctions in coordination with other capitals. This would minimise the conspicuousness of such actions and thereby potentially reduce China’s ire, while also possibly increasing the impact of the sanctions via the involvement of other jurisdictions. Although Canada, the European Union, the United Kingdom, and the United States already introduced targeted sanctions against Chinese officials in March this year, Australian sanctions could potentially be combined with a future round of sanctions from some or all of these partners (assuming that additional rounds of such sanctions are likely).

An alternative would be for Australia to wait and sanction Chinese officials in tandem with other countries such as Japan and New Zealand, which are apparently exploring similar autonomous sanctions regimes. This might be an especially appealing option given that it would allow Australia to associate its sanctions with two countries that have comparatively smooth relations with China, thereby possibly lowering the heat of Beijing’s response. But even if Canberra waits to join Tokyo and Wellington, Beijing’s response is still likely to be swift and hostile. Retributive measures, including possible additional formal sanctions against Australian parliamentarians, academics, and research organisations, seem highly likely and the bilateral relationship is likely to take a further hit.

One final thought bubble: If sanctions are going to be levelled at individuals “who threaten [Australia’s] national interest in the cyber realm” are we likely to eventually see the autonomous sanctions regime expanded further to allow the government to target officials with responsibility for economic coercion against Australia and other states? This is not to endorse such an expansion, and any such expansion would presumably require further legislative amendments. But the levelling of targeted sanctions in response to “malicious cyber activity” at least raises the prospect of their use to combat other national security threats.

That said, there are a range of caveats and questions to unpack here: Could Australia apply economic coercion sanctions consistently given the longstanding use of coercive trade practices by the United States? How big is the risk that such targeted sanctions would provoke yet more economic coercion by way of retribution? And how would Canberra manage the intelligence and policy complexities of attributing responsibility for economic coercion to particular decisionmakers? These and many similar questions notwithstanding, it’s easy to imagine that we’re at the beginning of an expansion of the use of targeted sanctions on national security grounds.

Resuscitating plausible deniability?

Ministry of Foreign Affairs Spokesperson Wang Wenbin speaking on 1 December:

“China takes measures on imported products according to Chinese laws and regulations and WTO rules to protect the legitimate rights and interests of relevant Chinese industries and the safety of Chinese consumers. This is totally reasonable, lawful and beyond reproach. It is the Australian side that has adopted a series of measures in violation of market principles and the spirit of China-Australia free trade agreement.”

Quick take:

After a string of statements making plain the political motivations for China’s trade restrictions against Australia, Wang’s emphasis on laws, rules, and regulations is a noteworthy reversion to earlier apparent efforts to cultivate plausible deniability regarding the coercive nature of China’s trade restrictions. Does this shift in tone signal a future change in China’s strategy regarding its economic pressure campaign against Australia? Unsurprisingly, not necessarily. Such a statement might amount to little more than a different diplomatic gloss on China’s actions.

Moreover, beyond tentative signs of optimism from some Australian businesses, I can’t yet see strong indications that trade restrictions are likely to ease any time soon. Especially with the fast-growing likelihood of Australia employing targeted sanctions against Chinese officials over human rights abuses and malicious cyber activities. That said, Wang’s formulation might at least indicate that Beijing is seeking to soften its diplomatic messaging and avoid the impression that its trade restrictions are nakedly coercive. But of course, Wang’s apparent shift in tone might be totally overtaken by a future series of statements from Zhao Lijian or Hua Chunying.

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