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Will souring China-Australia relations force a rethink on trade?

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Relations between China and Australia continued to decline on Tuesday after the hasty departure of the last remaining Australian journalists in China. The move comes in the wake of Beijings imposition of trade sanctions against Australian goods, which could trigger a rethink of Australias decades-long economic reliance on China.

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The two journalists – Bill Birtles of the Australian Broadcasting Corporation (ABC) and Michael Smith of the Australian Financial Review (AFR) – arrived in Sydney on Tuesday. The Australian government had warned the journalists to leave as tensions escalated over another Australian citizen, television anchor Cheng Lei, who is being detained on allegations of endangering national security.

The two men had been kept from leaving China until they were questioned about Cheng, AFR said in a statement, adding they were told they were "persons of interest" in an investigation into their colleague. Australian diplomats negotiated their departure.

It is the first time since the normalisation of relations between Australia and China in the early1970s that there are no Australian journalists in China.

The ban on the Australian journalists is part of a wider China crackdown on Western journalists, with more than a dozen US journalists from the New York Times, Wall Street Journal and Washington Post also having been targeted.

For Australia, however, the ramifications run particularly deep and reflect an unravelling of ties with its top trading partner.

"It felt very, very political. It very much felt like a diplomatic tussle in the broader Australia-China relationship," Birtles told ABC television on Tuesday.

Professor Steve Tsang, director of the SOAS China Institute at the University of London, told FRANCE 24 that the Australian government will likely become more cautious and conditional in its engagement with China going forward.

“The Australian government would be seeing that China has not been the benevolent friend it perhaps thought it was,” Tsang said.

Trade dollars at stake

China is Australias largest trading partner – in June 2020, Australias exports to China reached a record A$14.6 billion (almost €9 billion) and accounted for 49 percent of Australias total exported goods.

This years record was reached despite sanctions Beijing imposed on Australian beef, barley and coal, and anti-dumping tariffs of more than 200 percent on wine. The trade barriers were thought to be retaliatory after Australian Prime Minister Scott Morrison called on world leaders in April to back an independent inquiry into Chinas handling of the Covid-19 outbreak. Beijing said the move by Australia was “politically motivated”.

Dr Pak K Lee, a senior lecturer at Kent University specialising in Chinese politics and international relations, said the call was a major turning point in Australias relations with China.

“Whether wrongly or not, China believes that Australia was doing the USs bidding,” Dr Lee said. “But Australia itself has mounting concerns over Chinas external behaviour in the South China Sea and over alleged Chinas political intervention in its domestic politics via Chinese diasporas.”

Australia has refrained from a tit-for-tat response even as China continues to pile on trade sanctions.

But Australia is treading cautiously as it “does not have many other viable options for its commodity exports and cannot readily find customers other than Chinese importers”, Dr Lee says.

Within Australia, the debate has become highly divisive. In one camp are those advocating for closer ties with China who are worried about the economic fallout for Australia. On the other are those citing Beijings pursuit of self-interest and the dangers of becoming too economically dependent on Chinese trade.

Professor Tsang said there are risks for any country that relies on trading predominantly with one partner – and particularly in the absence of shared democratic values.

“Theres a risk for any country that is heavily trading with one partner and where the countrys values arent shared,” he said.

Tsang also noted that Chinas newly assertive style of statecraft – named after a popular action film – had also increased feelings of competition.

“Unless Australia or any other country accepts Chinas Wolf Warrior approach to diplomacy, there are going to be certain elements of tension,” he said.

“China will not be satisfied unless Australia accepts playing second fiddle to the ChinesRead More – Source

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