Amidst all the odds, one country is busy in fulfilling its selfish goals. When countries are busy in saving the precious lives of its citizens one country provokes them for war, threatens small countries, want to grab their land, every day comes up with new claim from nowhere. Hope you guessed it right. There are lots of issues to talk about India-China, ASEAN-China, US-China, Africa-China, Aus-China, and the list goes on. Today I will be specifically talking about Aus-China trade war.
After COVID19 declared as pandemic by WHO, Australian PM is the second to say that there should open investigation, enquiry in China over its handling of the virus, if not first. Simple question arises here why Australia started taking open stance about China. There are many reasons for it.
Tourism industry is one of the worst affected due to COVID19, which represents more then 3% of Australian GDP contributing around USD 50 billion to the economy
China started increasing its influence in the Indo-Pacific and small countries around Australia by distributing huge loans. Aus fears that former will repeat here the same debt trap policy, thus PLA military will be at the door step of Australia. It started preparing for this condition as well by declaring the investment of USD 190 billion in defence sector within next 10 years.
Aus wants to strengthen its ties with more ideologically compatible allies like India, Japan and the United States. Aus PM Scott Morrison expressed the need to connect with more “like-minded democracies” to counter the Chinese aggression and expansion.
Main reason here is defence related and ideological issue. Aus can not wait and watch how China is increasing its economical influence on surrounding nations. So finally we are seeing the rise of new Australia under the leadership of Scott Morrison, who knows that they have to increase their military capabilities, reduce its dependence on China to maintain peace and stability in the region.
Before introducing any point I like to mention here one fact. China is largest trading partner of Aus accounting more than 30% of total trade with surplus in favour of Aus. Whatever steps it take, will have large impact on their economy.
Anger and mistrust between the countries has been bubbling under the surface for years. COVID19 provided the reason to burst. Let's see the events unfolding one by one.
Story begins when ASIO warned of growing Chinese attempts to influence the process of decision-making in Aus in 2017. Then PM Turnbull came up with a law to curb any such interference. China responded the situation by freezing diplomatic visits. Aus responded by banning Chinese tech giant Huawei from being involved in its 5G operations. China is angry with the Aus but its growing economy is hungry for resources like coal, iron core. There are many minor points in between. Aus commented on human rights violation in uighur, but full and final trigger is COVID19, where Aus called for enquiry. China's ambassador threatened that Chinese people could boycott Aus products. With this China slapped huge 80.5% tarrifs on almost all the imports and anti dumping duty on wine. Aus openly criticized the new security law imposed on Hong Kong in response. To assert its power, China detained the Aus journalist citing the national security reasons. This move is standard Chinese hostage diplomacy. As a result Aus orders that no Chinese reporter will work for Aus media, condemned Chinese actions in various international forums. Finally China hits a new low where foreign ministry spokesperson Lijian Zhao posted the doctored image of Aus soldier, sole aim of it is provokation. Aus demands apology for posting fake image, NZ and US also raises concerns with China over such image. PM Scott Morrison said that "Beijing should be utterly ashamed for sharing the repugnant image". but it is not. It had blocked all the Aus shipments including that with the perishable goods at port, compelling them to pay new tarrifs. It hurt the wine exporter in very bad way, whole industry is devastated said one of the wine exporter. Officials from Chinese govt said that Aus has repeatedly taken wrong words on issues involving China's core interest, this is the root cause of current situation in their relations.
The problem here is Aus enjoys the trade surplus, so they don't have anything to impose tarrifs. Only thing they can do is criticizing. One of the good step that emerged out of this is its participation in Malabar exercise first time after 2007.
Important lesson for India that comes out of this is we should never depend on one country for our exports. We should not only diversify our imports but exports too. So that we don't have to compromise on national interests during difficult times. Big question - is there any way for Aus to come out of this? We all know how China emerged as powerful country in past decade. Aus alone can not do much, QUAD has to play its role here, it has to respond on behalf of Aus. I am not saying that it will immediately provide market for Aus exports, even combining Ind, US, Japan trade stands nowhere near China. Aus is to China what China is to US and India. If it uses trade war to suppress our ally what stops QUAD from doing the same. Aus should consider this as an opportunity to search for alternate trade partners. Aus-Ind trade has grown from 13.6 billion USD in 2007 to 30.4 billion USD in 2018, still ton of potential left here to explore in defense, space, cyber security, dairy, coal, uranium, etc. Talks are in place for agreement, need to fast track it. QUAD can come together to finance India's ambitious projects in North-East specially Arunachal Pradesh. Need of the hour is common policy to follow for minimum of 10 years. It took decade for China to acquire the power that it enjoys today. And can not be challenged in short time frame. Slowly when countries will not dependant on China at today's level. Automatically, it will not be able to bully other. I am not talking about completely removing China from supply chain, it will be integral part but chain is much more diversified to ensure when one country sneezes other does not catch flu. In this way system will be highly resilient towards any shock in the future.