Australia is showing New Zealand how to resist the authoritarian Xi Jinping’s pressure and stay prosperous at the same time.
You may recall that China imposed a series of targeted punitive trade measures against Australia in 2020. There were a series of escalating disputes between them, and China hit Australia with very targeted sanctions when then-Prime Minister Scott Morrison called for an inquiry into the origins of COVID-19. At that point China was the destination for more than 42% of Australia’s exports in 2021 up from 14% in 2007. Australia and New Zealand had not been as dependent on a single market since the late 1930s when the United Kingdom was the ‘mother country’ for all things trade.
For the first time in its history, Australia was dealing with a situation where its largest trading partner was becoming its adversary. China hit barley growers for their beer, beef farmers, luxury wine, and of course coal.
New Zealand, in quite the same position in its economic reliance on China, diplomatically sat on its hands and watched. Beijing suspended high-level political exchanges but Canberra essentially said ‘so what.’ Sure, China could still double down, and seek the coal and iron ore they need from other countries. Same with New Zealand milk and sauvignon and inbound tourism.
Diplomacy has been restored but the sanctions against Australia remain. The lesson for New Zealand in a similar position is this: do not blink.
Australia has since 2020 grown in confidence about their ability to withstand economic coercion. Australia indeed is going into the economic headwinds of 2023 in far better economic condition than China. New Zealand is also going into 2023 with difficult global conditions, but without the hard Chinese pressure.
What the last three years have shown is that Australia has stood up for its principles and it is winning, and it is also remaining very prosperous. Diplomatic engagement between the two has been restored with the arrival of the new Labor government.
It is this resolute Australian positioning that lets Xi Jinping and any other tyrant know that actually they will not win, the rise of control against democracy is not inevitable, and their threats will be faced down.
This is not resolved by any means. China will continue to assert its influence. A solution to the fundamental bilateral political tensions is not on the horizon.
Also, Australia and New Zealand both have to face a rapidly restructuring Chinese economy. Our common deep economic export reliance on them is worrying when the tensions remain high. But it is certainly the case that Australia and New Zealand control critical commodities – raw minerals from Australia and value-added water from New Zealand, and both have strategic worth and leverage for China.
Australia’s successful positioning is also a particularly useful signal for Taiwan. The Taiwanese, like the Ukrainians, find themselves on the front line between democracy and autocracy. They too are being forced to invent strategies of resistance.
Australia has signalled that it is possible to take the economic pressure from Beijing, and win. Taiwan will take note.
Taiwan is in the midst of both military hostility and propaganda and web-based offensives from China, and they are able to continue to stand up to Beijing in part because of resolute support from countries that support democracy and the institutions of open society. That is the kind of pressure we are likely to see continue in the Pacific rather than a Russian-style all-in military offensive, so this is what we here in New Zealand need to better play our part in actually doing.
Tyrannies like China are seeking to expand their influence around the world including inside democracies.
Australia is showing them, and us, that you can take the pressure, and you can win against them.
And if Australia can, we can.
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