27 Oct

The UK and Australia are poles apart on China diplomacy

When Julie Bishop first became Foreign Minister in 2013, she decided to make economic diplomacy one of the focal points of her role as the country’s chief diplomat. Bishop’s policy closely echoed that of her counterpart in Britain: the Cameron Government also promised to make expanding British commercial interests the central piece of its foreign policy.

Bishop instructed every one of Australia’s 95 heads of mission to construct an economic diplomacy strategy. The former British foreign secretary William Hague also told his diplomats to help British businesses expand their presences, especially in emerging markets.

There is little surprise that both conservative governments have chosen to put commercial interests at the centre of their foreign policies. But they differ significantly when comes to dealing with China.

Canberra and London see China as crucial to their national economies, but each government has adopted very different strategies. These different approaches are striking given both Britain and Australia share the same heritage, as well as being two of the closest allies of the US.

London has brushed aside many national security and human rights concerns and rolled out red carpets for Chinese companies as well as its authoritarian leader Xi Jinping, who is currently visiting Britain like a triumphant Caesar. One Labour MP has described Prime Minister Cameron’s deferential behaviour to Xi as “like a supplicant fawning spaniel that licks the hand that beats it”.

If Cameron’s fawning behaviour is raising eyebrows, his government’s pivot to China is causing much greater anxiety among allies as well as some people in Britain. London has allowed the Chinese technology giant Huawei to build its national broadband project. The same company is barred from Australia and the US from undertaking similar projects on national security grounds.

Britain’s decision is noticeable given it is part of the so-called 'Five Eyes', a close network of five English-speaking countries that share top-secret intelligence. Chinese companies are also tipped to take a one-third stake in the Hinkley Point nuclear plant, which is due to provide 7 per cent of the UK’s electricity needs.

The Cameron Government has more or less adopted an open door policy towards Chinese investment. George Osborne, the Chancellor of Exchequer and Cameron’s likely successor, brushed aside concerns and wants China to be Britain’s biggest trading partner after the US by 2025.

He has come under heavy criticism for his excessively deferential behaviour towards Beijing, including his failure to raise human rights issues publicly during a recent trip to China. The UK’s accommodative policy towards China has also irked Washington, its closest ally. London ignored the US Government's advice and joined the Chinese-backed Asian Infrastructure Investment Bank.

Though the Australian Government warmly welcomed Xi last year during a state visit and concluded a historic free trade agreement with Beijing, Canberra is much less doe-eyed towards China than London. Bishop has clashed repeatedly with Chinese officials over Beijing’s aggressive territorial ambitions in the East and South China seas.

New Prime Minister Malcolm Turnbull, who has said many empathetic things about China, has also castigated China for its assertive behaviour in the South China Sea. On this front, Australia is much more closely allied with Washington than London.

On the foreign investment front, the Australian Government is much more cautious and Chinese state-owned enterprises face extra scrutiny here. It is seemingly unimaginable for a state-owned operator to buy a major stake in an Australian nuclear facility. Huawei is effectively barred from bidding for any federal government IT projects.

Geography could be a key explainer for the strikingly different approaches. The simple fact is Australia is much closer to China’s sphere of influence than Britain. London does not have to worry about an expanding Chinese naval fleet anytime soon. Putin and Islamic terrorists are much more menacing than the distant Chinese.

On other hand, Australia’s vital trading interests could be affected if China’s territorial ambitions in the South China Seas lead to armed conflicts. Australian military planners and intelligence officials feel much greater pressure than their British counterparts. The fall of Singapore was a military defeat for the British Empire but presented an existential threat to Australia.

How to deal with a rising and ever stronger China is a big policy challenge for Britain and Australia. There is nothing wrong with the Cameron Government's effort to court Chinese money and investment. The Economist is right to argues that it accepts the chancellor’s main argument that China is now too big a power for a global entrepot like Britain not to embrace.

However, London should not simply brush aside legitimate human rights and security concerns from its own people and allies. As the oldest democracy in the world and the former colonial master of Hong Kong, it has unique moral and legal obligations to defend rule of law and democratic values. Australia has raised these issues with Beijing without any damage to bilateral economic relations.

Though unconvinced that stern words both publicly and privately will prevent Beijing from harassing its liberals and minorities, it is nevertheless important for countries like Australia and Britain to unambiguously state and defend their core values whenever and wherever possible.

 

By Peter Cai, Business Spectator

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