Fortnight of 19 September to 2 October 2022

Economic coercion concerns return

From the readout of Minister for Trade and Tourism Don Farrell’s meeting with his Spanish counterpart Maria Reyes Maroto Illera:

“We also discussed our shared interests in responding to economic coercion and acknowledged the importance of working with trusted partners to preserve the integrity of the multilateral system.”

Quick take:

The reference to “economic coercion” in this joint statement with Spain is striking in the broader context of the Albanese government’s seemingly concerted effort to turn down the previous government’s rhetorical heat on China’s trade restrictions. As I’ve noted in this newsletter and elsewhere previously, criticisms of economic coercion featured prominently in Morrison government messaging in the 2020-22 period. After the 21 May federal election, one of the most conspicuous shifts in Australian language on China was the new Albanese government’s reframing of economic coercion in less rhetorically charged ways. Aside from a small number of exceptions, Albanese government ministers have referred to China’s “trade sanctions” in a wide range of interviews and statements. As recently as late last month, the Prime Minister was describing China’s economic coercion simply as “sanctions.”

Crucially, concerns about economic coercion were dropped from bilateral and minilateral statements with likeminded countries. For example, whereas the May 2021 leader-level Australia-New Zealand Joint Statement “expressed concern over harmful economic coercion,” the July 2022 joint statement made no reference to economic coercion. It’s obviously not a like-for-like comparison, but the reference to “opposing coercive economic practices” from the inaugural August 2021 Australia-France 2+2 Ministerial Consultations didn’t feature in the leader-level July 2022 France-Australia Joint Statement. Beyond the recent joint statement between Minister Farrell and his Spanish counterpart, the only other exception to the excising of economic coercion from high-level statements since the May federal election (of which I’m aware) is the Quad Joint Leaders’ Statement from 24 May. But given the timing of that statement circa three days after the federal election, it’s highly likely (certain?) that it was agreed prior to Labor winning the election. It therefore presumably didn’t reflect the linguistic shift on China’s trade restrictions that the new government subsequently instituted.

What has prompted the return to raising concerns about economic coercion? One possibility is that this language wasn’t driven by Canberra. Perhaps Madrid wanted this reference inserted given that fellow European Union (EU) member Lithuania has been subjected to China’s sustained coercive economic measures since 2021? I’m very, very far from qualified to comment on Spanish foreign policy. But a cursory glance doesn’t turn up regular references to concerns about economic coercion in Madrid’s diplomatic messaging (leaving aside EU statements and measures). (Any readers with knowledge of the granular details of recent Spanish foreign policy, please correct me if I’ve missed something.)

Other possible explanations might be that the Albanese government in general is planning on resuscitating the language of economic coercion. Though possible, this explanation sits oddly with the Foreign Minister cautiously referring to China’s economic coercion as “trade blockages” in late September in both an interview and the bilateral meeting with her Chinese counterpart Wang Yi. It also doesn’t fit with the absence of a reference to economic coercion in the 24 September Joint Readout of the Quad Ministerial Meeting. This lacuna is especially conspicuous considering that concerns about economic coercion were forcefully tabled in the previous Quad ministerial meeting in February during the Morrison government’s tenure.

Given the mixed evidence so far, I’d want to wait for more datapoints to get a firm sense of how the Albanese government will describe China’s trade restrictions going forward. Perhaps we’re witnessing the early stages of rethink of the tactic of reducing the use of economic coercion language on the grounds that the tweak in nomenclature may not have delivered obvious results? Or perhaps Minister Farrell is positioning himself to speak more strongly on one of the most critical issues impacting his portfolio and the broader Australia-China relationship?

Regardless of how the language evolves, Minister Farrell’s recent joint statement makes it clear that Canberra hasn’t abandoned more rhetorically forceful references to economic coercion. Consistent with this reading, reporting from The Australian Financial Review suggests that Spain was backing up Australia’s effort to reform the World Trade Organization to better adjudicate coercive trade practices. Based on all this and despite a more cautious start to criticising China’s trade restrictions, I’d expect stronger expressions of concern about economic coercion from the Albanese government in the months ahead.

Minister for Trade and Tourism Don Farrell meets Minister of Industry, Trade, and Tourism Maria Reyes Maroto Illera on 28 September []

The case for emphasising concerns about economic coercion

From the speech on 30 September by (I’m assuming, though it’s not specified) the Chinese Ambassador to Australia Xiao Qian at a reception celebrating the 73rd anniversary of the founding of the People’s Republic of China:

“Since the new Labor government came to power after the recent federal election, we have seen a good start to reset the China-Australia relationship. … It is our strong belief that, as long as both sides take concrete actions and move towards each other in the spirit of mutual respect and mutual benefit, we’ll be able to bring China-Australia relations back on the right track at an early date.”

Quick take:

Questions of what the Albanese government is saying on China’s trade restrictions aside, what should they be saying? Should the Prime Minister and his ministers revive their predecessors’ practice of regularly and forcefully calling out economic coercion specifically? These kinds of questions are likely to be especially tough to answer given strikingly positive messaging like the above coming from the Chinese government. Isn’t there a chance that reverting to tougher Morrison government-era language, such as calling out economic coercion by that name, could jeopardise the so-far rapid warming of bilateral ties? The costs and benefits of returning to the language of economic coercion to criticise China’s trade restrictions are mixed. But, on balance, I’d be inclined to revert to the previous government’s regular expressions of concerns about economic coercion.

On the cost side of the ledger, using the language of economic coercion again is likely to modestly frustrate Beijing. The Chinese government presumably noticed and appreciated Australia’s linguistic shift away from economic coercion. Nevertheless, reviving economic coercion is unlikely to singlehandedly derail the cautious diplomatic entente between Australia and China. Canberra’s resurrection of the language of economic coercion would presumably pale into relative unimportance in Beijing’s eyes compared to the intense policy disagreements over everything from Taiwan and AUKUS submarines to China’s security role in the Pacific and human rights abuses in Xinjiang. The improvement of bilateral ties has continued despite all these fractious substantive disputes, so it seems implausible to imagine that raising concerns about economic coercion specifically would upend the more positive trajectory in Australia-China relations. That doesn’t mean that reusing the language of economic coercion won’t be a net negative for bilateral atmospherics. But it alone probably won’t stop, for example, Australian ministers (and perhaps leaders) getting ad hoc meetings with their Chinese counterparts.

On the benefit side of the ledger, the language of economic coercion elevates the Australian experience with China’s trade restrictions among allies and partners and in prominent minilateral groupings, such as the G7 and Quad. Of course, the same substantive issue of China’s trade restrictions can be raised without the specific language of economic coercion. But this snappy and emotive turn of phrase is presumably a more powerful framing for the purposes of increasing international awareness and galvanising opposition to coercive economic practices. Importantly for Australia, this language of economic coercion was embraced by a range of Australia’s key allies and partners in the Indo-Pacific that tend to be more reluctant (in relative terms, at least) to use language that can be interpretated as critical of China. These regional countries that have previously joined Australia in raising concerns about economic coercion include India, New Zealand, Malaysia, Singapore, and Vietnam. Giving up on the effective Morrison government effort to have allies and partners sign onto concerns about economic coercion can plausibly be seen as abandoning a diplomatic strategy that had successfully and perhaps surprisingly garnered widespread regional and global support.

The language of economic coercion also likely serves a domestic political function. Calling out economic coercion explicitly may help the Australian public understand the pressures that their government and exporters are under at the hands of the Chinese government. This could incrementally foster the kind of whole-of-nation solidarity and resilience that is beneficial for riding out enduring economic coercion and other pressure campaigns. It might not factor into matters of statecraft, but the label of economic coercion is also probably more analytically accurate. After all, despite intermittent efforts to cultivate plausible deniability, China is seeking to, among other things, punish Australia for its actions and pressure the Australian government, which makes Beijing’s trade restrictions nakedly coercive. Calling China’s actions simple trade restrictions is therefore on some level euphemistic.

To be clear, the domestic benefits of using the language of economic coercion depend on the Albanese government being careful to level accusations of economic coercion against Beijing and the Chinese government specifically, as opposed to using loose terms like “Chinese economic coercion.” Using rubbery adjectives like “Chinese” without linking them to the Chinese state specifically risks blurring massively important distinctions between Chinese peoples, Chinese diaspora communities around the globe and in Australia, China the country, the Chinese government, the Chinese Communist Party, etc. As others have persuasively argued, using imprecise terms like “Chinese economic coercion” could easily have a corrosive impact on Australia’s social cohesion and indirectly endanger Australians of Chinese backgrounds.

Of course, more forcefully naming and shaming Beijing by raising concerns about economic coercion specifically almost certainly won’t convince China to stop imposing its trade restrictions. After all, it didn’t achieve that result when the Morrison government repeatedly used the language of economic coercion (albeit in the context of markedly different bilateral dynamics). But the inverse is true also: using the rhetorically softer language of trade restrictions or sanctions is alone almost certainly not going to dramatically improve the Australia-China relationship and convince Beijing to dismantle its coercive trade measure.

In the grand scheme of bilateral ties, calling out China’s economic coercion will only probably be a minor additional drag on the relationship and will likely have some diplomatic and domestic benefits for Australia. If that’s right, there’s a case (albeit not a totally clear-cut one) for Minister Farrell and his colleagues to start once again using the language of economic coercion. Others, no doubt, will calculate the balance of costs and benefits differently. And the above, of course, is a just a preliminary assessment. But there may still be cause for replicating this specific aspect of the Morrison government’s diplomatic oeuvre on China.

From naming and shaming to flattery?

Minister for Foreign Affairs Penny Wong responding on 23 September 2022 to a question about calls for China to be more critical of Russia’s invasion of Ukraine:

“China is a great power. China is a P5 member [permanent member of the United Nations Security Council]. China has like all of us, signed up to the UN charter. We believe as does every country with the exception of Russia that Russia is in breach of the UN charter through its illegal invasion of Ukraine. And we encourage China as a member – P5 member with a special responsibility to uphold the UN charter to use its influence to end the war.”

Quick take:

Notwithstanding Minister for Trade and Tourism Farrell’s more forward-leaning messaging on economic coercion, Minister for Foreign Affairs Wong has recently sounded some softer notes on China. In other interviews during her recent US visit, the Minister emphasized (and reemphasized) that “the world … look[s] to China as a great power” and also that it has a “special responsibility to ensure that the UN Charter is upheld.” These remarks were made in the grim context of Russia’s invasion of Ukraine and efforts to convince Beijing to use its influence in Moscow to seek an end to the invasion. Yet these appeals to China on the basis of its great power status also fit into a recent pattern of weaving some complimentary strands into Canberra’s messaging about Beijing.

This tendency was also on show in Minister Wong’s meeting with her Chinese counterpart during the same US visit. In her opening remarks, the Minister noted: “Trade has been the platform from which the PRC [People’s Republic of China] has made historic achievements in poverty alleviation.” To be clear, this kind of laudatory rhetoric about China’s remarkable development story is not new for Australia. As I’ve noted previously, highlighting China’s herculean poverty reduction achievements was a regular talking point used by the Morrison government even during the freeze in bilateral diplomatic ties in the period 2020-22. Still, combined with appeals to China’s great power status, this language suggests a willingness on the part of the Albanese government to combine its continued criticisms of China with select offers of praise.

These kinds of rhetorical status boosts for Beijing presumably won’t alone convince China to change its approach to Russia’s invasion of Ukraine or any number of bilateral issues in the Australia-China relationship. Nevertheless, these complimentary messages will probably be noted and appreciated by Beijing. This is likely to be especially true when they feed into the Chinese government’s positive self-conception. For example, Beijing regularly touts its record on poverty reduction and proudly brandishes its status as, according to Chinese officials, a great and responsible world power. These and related themes were, for example, front and centre both during Foreign Minister Wang’s address to the United Nations General Assembly and the Chinese Embassy in Canberra’s Nation Day reception. It’s reasonable to imagine that Minister Wong’s use of versions of these points in her own appeals to Beijing will resonate with the Chinese government and its representatives.

Offering such praise is also savvy because it costs Australia very little/nothing beyond adding a few additional talking points to ministerial messaging. With the Albanese government consistently signalling its determination to not compromise on any points of substantive policy disagreement with China, flattering Beijing with these kinds of diplomatic messages is an economical way of appealing to the Chinese government without conceding any policy ground. Even if it only yields the most marginal of improvement in bilateral ties, it’ll likely still be on balance a worthwhile diplomatic tactic given how low-cost it is for Canberra.

Perhaps more importantly though, periodic compliments could help build an additional quantum of goodwill in Beijing that Canberra can store up for times when it must take tough actions in other policy arenas. The Albanese government will likely be pushed in the coming months to, among other things, impose targeted sanctions against Chinese government and communist party officials in response to human rights abuses in Xinjiang. Canberra semi-regularly flattering Beijing probably won’t stop China responding to such sanctions with blistering diplomatic attacks and perhaps even countersanctions. But it equally seems plausible that offering ad hoc compliments will incrementally add to the warmth of bilateral ties and therefore somewhat mitigate and help manage the fallout from harder-edged China policy decisions in the future, including targeted Australian sanctions.

Full disclosure: I’d previously rationalised Australian rhetorical olive branches like the above and other possible symbolic gestures as a means of improving the overall tenor of bilateral ties and maybe in time persuading Beijing to normalise high-level diplomatic and political contact and wind back its trade restrictions. It’s still admittedly a question in my mind, but I’m now more inclined to see these low-cost diplomatic tactics as tools for managing the near-inevitable future turbulence of bilateral ties rather than substantively improving the relationship. Of course, such gestures might eventually shift the relationship overall to a more positive trajectory. But even if that doesn’t happen or indeed can’t happen due to all the deep-seated disagreements between Beijing and Canberra, diplomatic messages like Minister Wong’s recent compliments may still serve the important function of building a modest reservoir of goodwill in Beijing to moderate the incline of future downturns in bilateral ties.

(Addendum: There are of course numerous other low-cost options for Canberra to flatter Beijing with diplomatic messaging. I’ll [hopefully] share some other tentative ideas in the coming weeks.)

Minister for Foreign Affairs Penny Wong meets Foreign Minister Wang Yi on 22 September 2022 []

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