China-Australia Trade: Coronavirus Inquiry Puts Exports at Risk

[Faseeha Hashmi] Australians know the importance of China to our economy and there is no doubt that the feelings are mutual. Indeed, China is often celebrated as Australia's biggest export market while Australia is a major investment hub for the Chinese. So when Prime Minister Scott Morrison was accused of parroting the United States in its call for an independent inquiry into the origins of COVID-19, where does this leave the state of relations with our most significant trading partner?

A Lover’s Quarrel

According to recent Department of Foreign Affairs and Trade figures, China consumes $79.5 billion worth of Australian iron ore, $13.8 billion worth of coal and $16 billion in natural gas exports. Moreover, given that Chinese steel mills are engineered to take particular blends of iron ore readily supplied by Australia, China is unlikely to shift away to another seller anytime soon. In addition, Chinese students and tourism are a major beneficial exchange. It is a fair assessment to say that China needs us, but we also need them. Certainly, this is more pertinent than ever as China warns its overseas students to be cautious of racism in Australia.

On the other hand, Australia’s enthusiasm for an independent inquiry has sent all the wrong signals to Beijing, which has abruptly decided to suspend shipments from four major beef facilities, with tariffs on barley and wine to follow. This has led many foreign policy analysts to question what on earth went wrong?

Following Beijing’s swift decision to ban various Australian exports, Chinese authorities ignored attempts by the Morrison Government to reach out and discuss trade tensions. Australia’s Trade Minister Simon Birmingham confirmed his Chinese counterpart Zhong Shan had not responded to his requests for a meeting. It is anticipated that any sanctions or tariff hikes on Australian products will likely hit our grain, wine, dairy and seafood sectors which rely heavily on China. While the Federal Agriculture Minister David Littleproud has stated that “there is no trade war” and Australia has no plans to retaliate by imposing tariffs on Chinese imports, this diplomatic tiff certainly reveals the delicate nature of Australia’s trade relations with China.

Filling in the Economic Gaps

Nevertheless, it might do Australia some good to look elsewhere. The fact is that Australia has a bit more work to do in diversifying its export markets. These realities are certainly not all doom and gloom. When mainland China's investment in commercial real estate in Australia fell after peaking in 2015, other Asian investors quickly filled the void as the flow of capital from Hong Kong and Singapore soared to record levels.

Moreover, to Australia’s detriment, former New Zealand Prime Minister Helen Clarke, Australia seems unlikely to maintain a stiff upper lip. The Morrison government has maintained the same line as that of our American allies in calling for an independent examination into the COVID-19 pandemic, stating that Australians always "stand our ground when it comes to the things we believe in”. Indeed, getting to the bottom of the virus’ origins is not in itself an unworthy objective. Rather, an argument could be made that Canberra’s inconsiderate diplomatic communication with Beijing was a poor choice. Given the heightened level of Chinese objections, it might do Australia some good to tread more carefully.

Shifting the Blame Game

Perhaps a more beneficial approach to the issue, as opposed to holding individual countries liable for the COVID-19 pandemic, would be to ensure equitable distribution of the future vaccine. There is growing concern that instead of being available globally access to the vaccine may become the monopoly of a very few wealthy countries and companies.

Indeed, Helen Clarke has stated that the blame game can wait until the pandemic is dealt with. She acknowledged that the yet-to-be-discovered vaccine for Covid-19 should be made available free-of-charge to all countries, whether rich or poor. In this way, there would be equal access to any novel coronavirus vaccine developed by pharmaceutical giants rather than having countries fight to be the first in line.

Adding her name to a letter calling for global cooperation from more than 140 prominent world leaders to Health Ministers at the World Health Assembly, Clarke stated that the “world's leading virologists are telling us that without a vaccine we'll never live normally again so there is such a compelling public health reason for getting this out to everyone, everywhere.” Regrettably, Australia has yet to sign the letter.

Instead, Australia has stated it will collaborate with the European Union, which has drafted a resolution encouraging a “voluntary pooling” over intellectual property by governments and pharmaceutical companies to ensure widespread and low-cost manufacturing of any vaccine.

Summary

In the hopes for a post-pandemic world, the so-called people’s vaccine represents an encouraging initiative. However, in this current chaotic political climate, and at a time when constructive leadership is urgently required, no country should deliberately seek to stir the Chinese dragon. Australia should cautiously toe the diplomatic line by reminding its greatest trading partner of its ongoing importance.

Instead, Australia must actively assist with international diplomatic efforts to find a comprehensive solution for global health cooperation. If Australia’s truly intends to open its borders once again, choosing cooperation over conflict can only bring us closer to a cure. __________________________________________________________________________________

Faseeha Hashmi holds a Master of International Relations from the University of Melbourne, with an interest in community engagement and global politics.