Australian Prime Minister Scott Morrison's tone against China changed during his time in office. Photo: AFP / Getty

When China announced it had sentenced to death an Australian man held on drug trafficking charges, it marked the latest in a series of incidents that have driven the once-strong economic partners bitterly apart.  

Australia’s Department of Foreign Affairs and Trade condemned the decision, saying in a statement quoted by media that it opposes the death penalty in “all circumstances.” Beijing did not immediately release a statement on the death sentence.

The two sides are now engaged in a spiraling diplomatic spat that is fast emerging as a New Cold War first front pitting allies of the United States and those who align more overtly with China.

Relations have turned decidedly south since Australia called last month for an independent inquiry into the origin of the Covid-19 pandemic, which by all credible accounts started in the central Chinese city of Wuhan in January before making its lethal global spread.  

China has responded in kind through a series of economic threats, including a ban on Australian beef imports and new high tariffs on Australian barley.

Beijing has also recently discouraged Chinese students from studying in Australia and other citizens from traveling Down Under as tourists, claiming the country is not safe due to racist attacks against Asians during the pandemic.

Citing “incidents of discrimination”, Beijing called Chinese students in Australia to make a  “good risk assessment” and “exercise caution.”

A woman walks by Chinese language advertisements for Australian property in Sydney’s Chinatown on June 21, 2017. Photo: AFP/William West

“During the pandemic, Australia has seen multiple incidents of discrimination targeting those of Asian descent,” the Chinese Ministry of Education claimed without citing any particular incidents or providing any evidence.  

Last week, Australian Prime Minister Scott Morrison referred to the claim as “rubbish” and  told China he would not be intimidated by Beijing’s threats, saying his government will not “trade our values in response to coercion.”

“It’s a ridiculous assertion and it’s rejected. That’s not a statement that’s been made by the Chinese leadership,” said the Australian prime minister, referring to China’s accusation of racism in Australian institutions.

Morrison also said his country was willing to choose national autonomy over economic interests. Those interests are substantial: China is Australia’s largest trading partner, with two-way trade worth A$235 billion (US$160 billion) last year.

One study has estimated that Australian universities could lose up to $16 billion by 2023 due to the Covid-19 pandemic. International enrollments are down 20% hos year, causing an estimated $3.3 billion drop in revenue.

However, Australian universities were quick to condemn China’s latest announcement as baseless accusations, if not an act of intimidation.

Vicki Thomson, chief executive of The Group of Eight universities, Australia’s leading educational institutions, criticized what he described as “disappointing” and “demonstrably untrue” claims by China.

Two Asian student graduates at an Australian university in a file photo. Photo: Facebook

Australian university leaders, meanwhile, made it clear that they would reject “being used as a political pawn”, with the Australian National University’s new chancellor and former foreign minister Julie Bishop reiterating, “Canberra is one of the safest cities in a country widely regarded as one of the safest in the world.”   

At the same time, Australia is increasingly treating China as a strategic rival rather than ally. In particular, it is pushing back against China’s rising assertiveness in the South China Sea by stepping up cooperation with likeminded powers, including the US.

In recent years, Australia has effectively joined US-led Freedom of Navigation Operations (FONOPs) in the South China Sea, deploying warships to challenge Beijing’s expansive claims to the waterway through its sprawling network of artificially reclaimed and militarized islands.

In April, Australia’s frigate HMAS Parramatta joined two American warships as part of burgeoning multilateral FONOPs aimed at countering China’s claims in the South China Sea.

Earlier this month, the Australia leader held a virtual summit with his Indian counterpart, Prime Minister Narendra Modi, where the two leaders signed a new defense agreement, which he said will serve as a “first step in deepening of the defense relationship” between the two sides in the Indian and Pacific oceans.

The Australia-India Mutual Logistics Support Arrangement and the Defense Science and Technology Implementing Arrangement will pave the way for expanded joint exercises, defense technology transfers, and strategic coordination across vital sea lines of communications.

An Australian naval officer shows weapons to Indian Navy counterparts during the AUSINDEX 2017 joint exercises held in Australia. Photo: Twitter/Commonwealth of Australia

Morrison and Modi announced their “share[d] vision of a free, open, inclusive and rules-based Indo-Pacific region to support the freedom of navigation, over-flight and peaceful and cooperative use of the seas” in the virtual summit.

India is particularly relevant to Australia, given their shared interests in the region.

In recent years, New Delhi has expanded maritime security cooperation not only with Australian allies like the US and Japan but also Southeast Asian partners such as Vietnam, Indonesia and the Philippines.

Last year, India’s naval forces joined their counterparts from US, Japan and the Philippines in naval exercises in the South China Sea.

India has been particularly perturbed by China’s growing naval presence in the Indian Ocean, as well as potential threats to freedom of navigation in the South China Sea, a key artery of India’s Asian trade. 

The new defense deal with Australia was also symbolically timed in light of an escalating border dispute between India and China in the Himalayas, reflecting growing strategic rivalry between the two Asian giants in recent years.