Australia and China Trade Blows Over Calls for a Coronavirus Inquiry

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Australia and China Trade Blows Over Calls for a Coronavirus Inquiry

The contention over a COVID-19 inquiry follows months of deteriorating relations between Canberra and Beijing.

Australia and China Trade Blows Over Calls for a Coronavirus Inquiry
Credit: Illustration by Catherine Putz

In the most recent spat in a war of words between Australia and China, Australia’s former foreign minister, Alexander Downer, said of China’s ambassador to Australia, Cheng Jingye, “Not since the days of the cold war have I seen an ambassador behave in such a reckless, undiplomatic way.”

The comments came after Cheng told the Australian Financial Review that the Chinese public is “frustrated, dismayed and disappointed” over Australia’s calls for an independent inquiry into China’s handling of the coronavirus.

“I think if the mood is going from bad to worse, people would think why we should go to such a country while it’s not so friendly to China,” Cheng said. “The tourists may have second thoughts. Maybe the parents of the students would also think whether this place, which they find is not so friendly, even hostile, is the best place to send their kids. Maybe the ordinary people will think why they should drink Australian wine or eat Australian beef.” 

According to Natasha Kassam, a research fellow at the Lowy institute and a former diplomat serving in China between 2013 and 2017, the relationship between Australia and China has seen its “ups and downs” over the decades but maintains relative warmth. 

“What is more serious than in the past is that Australian public opinion has shifted to its lowest point in recent history,” she said. “The 2019 Lowy Institute Poll found only 32 percent of Australians trust China to act responsibly in the world. Almost all public opinion polling in Australia finds that the public are concerned about Australia’s economic exposure to China.”

“Given the economic slowdown in China, and dramatic changes in global supply, it would be surprising for China to take unilateral action against a significant economic partner like Australia, particularly where Australia is in the process of recovering from COVID-19 ahead of many of the world’s largest economies.”

China is Australia’s largest two-way trading partner, accounting for around 26 percent of Australia’s trade worldwide. In 2018-19, two-way trade reached a record $235 billion. The Australian exports Cheng said could be targeted — beef, wine, tourism, and higher education — account for just 13.3 percent of total exports to China. Iron ore, natural gas, coal, and higher education are the four main exports. 

China-watchers have long claimed Australia’s dependence on China to be an extreme risk and have urged Australian industries to diversify. In January, as supply chains came under threat from the coronavirus outbreak in China, the Australian government launched a national inquiry into the “vulnerabilities in Australia’s economy to external impacts.” A report published this week, however, claims the calls to diversify away from China are nothing more than a “zombie economic idea.”

“Zombie economic ideas are those that should have been slain by an accumulation of facts and evidence but continue to walk the land, stalking public policy,” according to the report, published by the Australia-China Relations Institute at the University of Technology Sydney. (The ACRI has faced criticism itself over its funding and messaging, part of a broader conversation about China’s influence operations in Australia.)

On education, for example, the author of the report wrote: “That some Australian entities like universities have attracted particular criticism owing to a significant exposure to the Chinese market misses the national interest benefit they have delivered, as well as the broader context.”

The revenue from international students has allowed seven Australian universities to muscle their way into the top 100 worldwide and supported around 260,000 full-time jobs pre-COVID-19.

The CEO of peak higher education body Universities Australia, Catriona Jackson, said they do not comment on government relations but would continue to maintain a healthy relationship with Beijing. 

“What universities have done over decades and decades and decades is establish a really strong relationship with students from all over the globe, including China, and we really hope that can continue,” she said.

Tensions between Beijing and Canberra have spiked in recent months over Australia’s decision to exclude Chinese telecom giant Huawei from the rollout of the country’s 5G network, disputes over the South China Sea, Beijing’s interference in Australian politics and businesses, and Australia’s harboring of a self-described former Chinese spy.

China claims the proposed COVID-19 inquiry is a political witch-hunt orchestrated by Washington and backed by Canberra, with the aim of isolating and humiliating Beijing. 

Downer, the former Australian foreign minister, dismissed Beijing’s comments, telling the ABC that there must be an impartial investigation into the cause of the outbreak.

“The global economy has been brought to a halt; 200,000 people are dead as a result of it,” he said. “We’ve got to investigate it. I’m very surprised that the Chinese should be so resistant to getting to the heart of what happened.”

The Chinese embassy in Canberra released a statement that said Cheng was dismissive of Australia’s concerns. 

“Ambassador Cheng flatly rejected the concerns expressed from the Australian side over his remarks during the recent AFR interview, and called on Australia to put aside ideological bias, stop political games and do more to promote bilateral relations,” the spokesperson said.