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

Australia has discovered that being a self-appointed US “deputy sheriff” comes with a high price. In this case it is the country’s economy, sinking into a recession for the first time in more than 30 years. Granted the Covid-19 pandemic has something to do with the faltering economy, but there is no mistake that China’s banning or restricting Australian exports exacerbated it.

China is Oz’s largest trade partner, and its biggest source of international students and tourists, after all.

To put that into perspective, China buys more than a third of Australian products, has sent more than 100,000 students to its universities, and huge numbers of Chinese tourists have visited the country. The economic impact on the Australian people cannot be overstated. Indeed, Australian coal miners and farmers are reeling from the trade war with China and universities and tourist-dependent industries are getting financially stressed.

The economic woes, sadly, will worsen because, China’s import bans might not end with the few items it has already targeted. The worst is yet to come unless there is an improvement in the China-Australia relationship. The latest Chinese ban on Australian goods included lobster and timber. Other items to be banned could be copper and sugar, and possibly iron ore, Australia’s biggest single export to China.

The Australian navy joining the Malabar military exercise involving the US, Japan and India in the Bay of Bengal on Tuesday, though meant to send a message or a warning to China, will not ease the China-Australian trade spat. The military exercise is more show than substance because none of the members of the Quadrilateral Security Dialogue really wants a war against the Asian giant, and for good reason.

It is not just that China is their biggest or major trade partner, but the fact that it is a nuclear power capable of taking the war to all four Quad countries. Any military conflict with China could lead to mutual assured destruction.

Furthermore, China does not really need Australia, it can substitute Australian products with those from other countries. Instead of eating Australian lobsters, the Chinese can always buy them from Canada or the US. Iron ore, coal, natural gas and other resources that Australia sells to China are readily available in other parts of the world. The non-Australian products might not be of the same quality or more expensive, but so what?

The same cannot be said for Australia, which is highly dependent on exports, tourism and international students to sustain economic growth. Other than China, no country can or will be able to buy as much products from, send as many students and tourists to Australia as China did. Of the world’s major economies, China is the only one that will enjoy positive growth this year and increase by 8.2% in 2012.

Indeed, other “like-minded” countries are in just as bad, if not worse, shape as Australia, all projected to sink into a recession of depths not seen since the 1930s Great Depression, estimated at between 5% (US) and 11% (India) by the International Monetary Fund and other organizations. Moreover, the EU, Canada, India, Japan and US are mired in Covid-19 issues, requiring long-term lockdowns, exacerbating their pandemic- and inept-policies-induced recessions.

Mishandling of the pandemic has resulted in second or third waves of the outbreak, forcing governments to impose stringent lockdown measures such as shutting down businesses for longer periods. Flawed policies are exacerbating these economic woes. The United States’ economic malaise, for example, was the result of President Donald Trump’s tariff policies and premature reopening of the economy.

Paid by American consumers and businesses, the tariffs hiked production costs and consumer prices. Close personal contacts without masks spiked the surge in Covid-19 infections and deaths.

Since fellow democracies will not be able to help Australia much, China is the only country that could realistically make Australia the “lucky continent” again. The Chinese government’s “dual circulation” strategy of designating domestic demand as the engine of growth could lead to massive imports of commodities. For example, building urban centers, roads and railways to connect them and existing cities requires considerable quantities of iron and other building materials.

Sadly, Australia chose to play with fire, unnecessarily provoking China with “fake news” and being a blind follower of its American “kin.” For example, the Australian government parroted Trump’s malicious and unproven rumor that Covid-19 was manufactured in China and spread to the world, demanding that the World Heath Organization to investigate the allegation.

However, scientific studies increasingly suggest that while the coronavirus that led to Covid-19 first emerged in China, it might not originated in the country. Too, the US Centers for Disease Control and Prevention revealed that some deaths from September to December 2019 thought to be flu-related were actually caused by Covid-19.

Australian Prime Minister Scott Morrison himself has said the majority of the infections were imported from Europe and the US. Last but not least, Covid-19 was found in Barcelona sewage as early as March of 2019.

Adding fuel to the fire was some US politicians, media and think-tanks resorting to disinformation and racist remarks to promote the “yellow peril” rhetoric in Australia. Australian-Chinese political donations, for example, were reported to be influence-peddling by the Communist Party of China.

Chinese students and scholars in the country were branded as spies unless proven otherwise, a severe case of innocent until proven guilty. And anyone who said anything positive about China was immediately dismissed as “panda huggers,” precluding any discussion of rational policy development and implementation on China.

Against this backdrop, Australia should not be surprised at being burned, because its anti-China politicians, pundits and media played with fire. It is time for “adults” in Australia to push back against the anti-China crowd that is the main culprit responsible for burning the country.

Ken Moak taught economic theory, public policy and globalization at university level for 33 years. He co-authored a book titled China’s Economic Rise and Its Global Impact in 2015. His second book, Developed Nations and the Economic Impact of Globalization, was published by Palgrave McMillan Springer.