Australian Prime Minister Scott Morrison's bid to get votes from a Jewish community backfired badly. Photo: AFP/Mark Graham
Australian Prime Minister Scott Morrison has agreed to a maritime security coalition with the US and UK. Photo: AFP / Mark Graham

Australian Prime Minister Scott Morrison has toned down his tantrum over Chinese diplomat Zhao Lijian’s posting of a piece of art depicting soldiers about to slit an Afghan child’s throat. China not only refused to delete the picture, it demanded that Australia investigate and apologize for its soldiers’ alleged atrocities in Afghanistan. But unexpectedly, Morrison was reported by the South China Morning Post on December 3 as saying he wanted a “happy co-existence” with China.

This raises the question: Why has the Australian prime minister apparently made a sudden U-turn on his country’s anti-China policies? There might be two answers.

One, Morrison may have finally acknowledged that Australia needs China to sustain its economic growth. One cannot bite the hand that feeds you, can you?

Two, except in the “Five Eyes” comprising the US, the UK, Australia, Canada and Zealand, Morrison might not want to be seen as a hypocrite, accusing China of what Australia has been doing only worse.

In the SCMP article, Morrison admitted that the “normal” China-Australia relationship benefited both countries, particularly his. China’s huge 2008 stimulus package reversing the economic downturn caused by that year’s financial crisis pulled Australia out of the deep recession into which the West and Japan had sunk by buying huge quantities of Australian resources. The rest is history.

Australia has been meddling in and bullying smaller nations for years. It intimidated Timor-Leste into accepting a border dispute that largely benefited Australia. Canberra criticized Beijing for imposing a national-security law on Hong Kong when that was not Australia’s business. These are just a couple of examples on a long list of Australia’s interfering in other countries affairs and bullying.

However, Morrison’s U-turn is refreshing, particularly for his country. While China may be getting the quality and quantity of resources it needs to fuel its industrial power, Australia will re-capture a big market and source of international students and tourists.

However, resetting the China-Australia relationship might be easier said than done. China cannot be expected to let bygones be bygones and resume trade as if nothing had happened. Moreover, Morrison faces considerable domestic and US opposition to resetting the relationship.

The major problem for Morrison is that the anti-China crowd has manipulated public opinion, culminating in an overwhelming majority of the Australian population having a negative view of the Asian giant.

Right-wing populist politicians such as Pauline Johnson have complained of Asians (read: Chinese) “swamping” the country. The anti-China crowd also accuses Beijing of spying, stealing secrets or technologies and meddling in Australian affairs.

Though such allegations were never proved, the damage was done, sinking the once mutually beneficial relationship to an all-time low. The latest spat was over artwork depicting an Australian soldier about to cut the throat of an Afghan child, which Zhao posted on Twitter. Morrison demanded that the tweet be taken down, but China refused and urged Australia to apologize to Afghanistan.

To suggest that Australia voluntarily propagated anti-China sentiments is, of course, highly unlikely: It probably was pushed by US, particularly under the Donald Trump administration. No country would bite the hand that feeds it unless it is pressured or forced to do so.

A case in point is Australia being the first to oblige the US demand that its allies ditch Huawei and other Chinese telecom firms from its 5G (fifth-generation technology) rollout, something that would cost more and cause delays.

Unsurprisingly, picking a fight with its biggest trade partner and source of students and tourists for no reason other than to please the “boss” has had economic and geopolitical repercussions for Australia. It made the pandemic-induced recession worse because of cutbacks by China on Australian exports, and fewer Chinese students and tourists entering the country. The economy plunged into a recession in the first half of this year.

It is true that the economy recouped in he third quarter, registering 3.3% growth, but that was largely attributed to a massive stimulus package subsidizing consumers. Welfare payments cannot last forever; what the country needs is wealth-creating economic activities.

Since Australia has no manufacturing to speak of, its main sources of wealth are exporting resources and education services and attracting tourists. China buys a third of Australia’s exports, and sends thousand of students and hundreds of thousands of tourists Down Under. It would be fair to suggest that no country can contribute as much to Australia as China.

Truth be told, China did not commit a fraction if any of the misdeeds that Australian politicians, pundits and media accused it of. On stealing Australian technology, for example, there is really nothing worthwhile for China to steal. Australia is not known for its technological achievements.

Indeed, having Chinese scholars working at its universities could increase the quality and quantity of research because China is far ahead of Australia in 5G, artificial intelligence and other technologies.

China does not really need Australia, but the fact of the matter is Australia needs China more than it wants to admit.

China is the biggest country in the recently signed Regional Comprehensive Economic Partnership, accounting for around 50% of the 15-country free-trade agreement’s gross domestic product. In this regard, it would not be an exaggeration to suggest China will be the other members’ biggest market.

Moreover, the Comprehensive Progressive Agreement for Trans-Pacific Partnership is more hype than substance because trade among its members remains lackluster. What’s more, the CPTTP could encounter problems, in part because its labor and environmental standards might be too high for developing economies such as Vietnam.

Prime Minister Morrison should follow through with his gesture of establishing a “happy co-existence” with China. Listening to the anti-China crowd and caving in to US pressure would only harm Australia’s national interests.

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.