NRPLUS MEMBER ARTICLE T he mega-trend in U.S. foreign policy in the past decade is the consensus view that the post–Cold War continuation of the Nixon/Kissinger policy of engagement with and accommodation of the People’s Republic of China has failed. Successive presidents of both parties extended the policy in the hope that the U.S. could help China as it lurched forward from the Maoist revolutionary era to a modern, engaged, liberal market economy. The Cold War policy had endured despite the growing awareness across the U.S. political spectrum of the PRC’s role in the first rank of global human-rights abusers, its increasing appetite for regional military confrontation, its bullying of democracies across Asia and the Indo-Pacific, and its abuse of the privileges afforded it through membership in global forums such as the United Nations, the World Trade Organization, the World Health Organization, and others.
During this accommodationist era, many U.S. policymakers largely ignored or downplayed China’s boorish and abusive behavior because of perceived economic opportunities its market offered and the hope that economic engagement would lead to political reforms.
That perception is changing. U.S. supply chains are being diversified away from China, with some returning to the United States’ own shores. China’s own economy is fragile, unstable, and in constant need of government intervention. There is skepticism about — if not downright hostility toward — Chinese direct foreign investment in the U.S. and in U.S. companies. And there is a lack of confidence in China’s public companies — such as Huawei — because of their relationship with the Chinese government. The recent push by the Trump administration not to permit the federal employee defined-benefit program to include an emerging-market benchmark fund that included Chinese equities reflects these facts.
The disconnect between economic and security interests, or the belief that economic engagement would create an improved security environment, was the tension at the core of the Nixon/Kissinger policy that endured for nearly four decades. The Trump administration, in its overall (albeit not always predictable) policy of confrontation and pressure, has taken a decidedly different approach. In its broadest sense, what the administration has done is to realign U.S. economic and security policy in a way that reflects the perception of the PRC as a bad actor in each domain. The 2017 National Security Strategy of the United States delineates the list of grievances that makes strategic cooperation or even partnership in the economic realm — the status quo since Nixon — essentially a dead letter. Building on that, the 2018 National Defense Strategy bluntly stated: “China is a strategic competitor using predatory economics to intimidate its neighbors while militarizing features in the South China Sea.”
One of those neighbors is Australia, a wealthy, democratic country with per capita income in the global top 10, according to IMF data. The challenge Australia faces is that the disconnect between its economic and security interests is profound. While it reflects the core Western liberal traditions and is a national-security ally, no democracy that is larger and wealthier depends as much on the PRC for its economic activity. Some 40 percent of Australian exports go to China, a 50 percent increase in just three years, and double what Australia exports to Japan, its next-highest export destination. And that gap is growing. The PRC holds the dominant position for Australian imports, too, with a quarter of the total.
While it was always a debatable presumption in the U.S. accommodationist era that the PRC had leverage over the United States, the growing PRC chauvinism toward its neighbors that has characterized the Xi Jinping era is on full display in Beijing’s actions toward Australia. Most recently, last month Australian prime minister Scott Morrison and other officials called for an independent analysis of PRC actions following the emergence of COVID-19 in Wuhan in late 2019. In response, the Communist government announced a suspension of beef imports from Australia and placed an 80 percent tariff on barley imports.
Those actions followed remarks by the editor of the government-run Global Times that Australia is “like chewing gum stuck on the sole of China’s shoes.” The PRC ambassador to Australia added that investigating China’s actions in the pandemic could lead “ordinary people” in China to ask, “Why should we . . . eat Australian beef?”
China’s bullying and threats toward Australia go deeper than the trading relationship. Just behind beef, barley, and other commodities that Australia exports to China is education. PRC nationals as a percentage of all foreign nationals in Australian universities have doubled to more than 30 percent in the past 20 years. In the Australian Capital Territory of Canberra and surrounding communities, six in ten foreign students are from the PRC.
This influx has created a microcosm of broader tensions within the region in the Xi era on Australian university campuses. Last year during the pro-democracy protests in Hong Kong, Australian universities were venues for both Hong Kong–sympathetic demonstrations and counter-protests by pro-Beijing students. Violence requiring police action occurred at several locations, reflecting, as the New York Times put it, the degree to which “Australian universities have come to depend on Chinese donors, students and organizations that are often loyal to Beijing and intolerant of dissent.”
More worrisome is China’s alleged involvement in Australia’s political system. Late last year, the Australian Security Intelligence Organization (ASIO) — the domestic counter-terror, counter-intelligence agency — acknowledged an investigation into allegations from 2018 by a Melbourne car dealer that a businessman with links to Norinco, a Chinese state-owned defense company, offered him $1 million or more to run for Parliament from the suburban Melbourne community of Chisholm. The car dealer, according to press reports, was heavily in debt and was later found dead in a Melbourne hotel room. The man who made the alleged offer denied it, and the circumstances as well as the details of the investigation remain cloudy. But the pattern is one that Western intelligence agencies, including ASIO, take seriously. Certainly, Beijing attempted to undermine the recent presidential election in Taiwan and remains active in influence operations against the pro-democracy movement in Hong Kong. A Chinese defector to Australia late last year created a stir with his detailed descriptions of PRC activities in Taiwan and Hong; he had participated in operations in both places.
Allegations of Chinese money in Australian politics go back years. In 2015, then-ASIO director Duncan Lewis cautioned political parties against accepting donations from two Australian billionaires linked to the Chinese government. In 2017, investigative journalism led to the resignation of a powerful Labor Party senator, Sam Dastyari, who admitted to having accepted donations from Chinese interests and to providing sensitive information to at least one Chinese donor. Previously, Dastyari had held a press conference with the same donor at a local Chinese friendship society affair at which the senator disputed Australian and Labor Party positions on China’s activism in the South China Sea and essentially hewed to the Chinese Communist Party line on the issue.
Since retiring in September 2019, former ASIO director Lewis, also a former Australian army general, has grown more pointed in his warnings. In a November interview with the Sydney Morning Herald, Lewis — speaking about other foreign actors but “overwhelmingly” China–– declared that “espionage and foreign interference is insidious. Its effects might not present for decades and by that time it’s too late. You wake up one day and find decisions made in our country that are not in the interests of our country. . . . Not only in politics but also in the community or in business. It takes over, basically, pulling the strings from offshore.”
Beijing’s influence Down Under is felt in its pattern of direct foreign investment, too. This has been a particular tool of Chinese influence in the region, notably through the Belt and Road infrastructure initiative. While Australia is not a participant in the BRI per se, significant Chinese investment in Australian infrastructure has taken place.
In 2015, the government of the Northern Territories provided a 99-year lease to operate the strategically located port of Darwin to a Chinese company linked to the People’s Liberation Army. The company’s billionaire owner has been lauded by the Chinese government for his commitments to Chinese national defense. The Australian Defence Association, an influential think-tank, subsequently called the lease “a seriously dumb idea.” At a meeting in Manila with Australian prime minister Malcolm Turnbull that year, President Obama noted that he’d learned about the deal in an article in the New York Times, and asked Turnbull to “let us know next time” something of that nature is contemplated. In the wake of the recent Chinese embargo on Australian beef, Labor MPs and others have called for nationalizing the port and reasserting Australian sovereignty over its facilities.
China’s leverage against Australia is evident in voluntary restraint and self-censorship in the country, too. Australian farm groups have made statements undermining the government position on the coronavirus. One trade association leader noted that “an inquiry is fine and great — I don’t think it’s urgent. . . . We would prefer that politics and business are kept separate. . . .”
Self-censorship is playing out in other ways, too. In 2018, a trade council in Queensland covered over the flags of Taiwan displayed as part of a “Beef Australia” promotion by local livestock producers. The flags were painted by Taiwanese-Australian high-school students, and the display was accompanied by a plaque celebrating “the cultural diversity of the Rockhampton community.” The head of the trade council said he made the decision to obscure the display of Taiwan’s colors “in line with the Australian Government’s approach of adhering to the one-China policy.”
More notorious was an explosive exposé in the Sydney Morning Herald and other outlets in early 2019 that revealed Australian publishers are subjecting their works by Australian authors to Chinese government review to ensure they do not run afoul of a list of Chinese concerns. The hope was to ensure the works can find a broader audience abroad. According to the report, negative references to Xi Jinping, discussion of the Tiananmen Square massacre of 1989, coverage of the Hong Kong pro-democracy protests, and even maps that don’t accord to China’s perspective of the region are prohibited and thereby less likely to be published by printers seeking the broadest audience possible.
The growing influence of China in Australia is becoming more well recognized. In 2018, Clive Hamilton, a respected analyst and intellect at Charles Sturt University in Canberra, published Silent Invasion, an analysis of the extent to which the Chinese Communist Party relies upon a sympathetic China diaspora to advance its aims in Australia. In a classic case of Marshall McLuhan’s observation that the medium is the message, the book’s publication was delayed by Allen and Unwin, a prominent Australian publisher, due to concerns about the anticipated backlash by the PRC. As reported in the New York Times, Rory Medcalf of the National Security College at Australian National University noted wryly that the publisher’s decision “proves the point that there’s an undue level of Chinese influence in Australia.” In an essay in Standpoint earlier this year, Hamilton detailed the attacks, legal challenges, charges of racism, and other pressures he endured. The book was met with derision by those afraid to upset the status quo and concerned about the leverage Beijing has. But it was a bestseller, and subsequent actions by Beijing and revelations about China’s attempts to influence Australian politics have validated the premise of the work.
There are other encouraging signs. Scott Morrison and his government seem to have no illusions about the challenges China poses, even in view of the vulnerabilities his country has to Beijing across many dimensions. The government so far is undeterred in its belief that China’s role in the global pandemic is worthy of careful analysis and truth-telling. In March, the government announced changes to its Foreign Investment Review Board procedures, requiring all direct foreign investment to undergo security scrutiny. The stated reason for the change is national security, given the pressure on Australian corporate valuations during the COVID-19 crisis and the concerns about flush overseas investors looking to pick up important companies at bargain-basement prices. But there’s little doubt that the policy is intended to limit PRC investments in Australia.
It also seems clear the Trump administration and the U.S. national-security establishment recognize the long-developing but now obvious threat to an important ally. The U.S. and Australia are bound to collective security by the 1951 Australia/New Zealand/US (ANZUS) Treaty. Relations with New Zealand have ebbed and flowed since then, including in the mid-1980s, when Auckland declared itself a nuclear-free zone and the U.S. suspended some of the ANZUS provisions. But the security relationship between the U.S. and Australia has only grown stronger. The U.S. Marines rotate a 2,500-strong contingent through an Australian military facility in Darwin each year. A biennial military exercise between the two countries involves tens of thousands of forces; it recently has been expanded to include other security partners, including Japan and South Korea. In addition, the U.S. and Australian foreign and defense chiefs meet annually as a group in the Australian Ministerial (AUSMIN) to discuss mutual national-security priorities. The Trump administration is building on these longstanding ties through expanded activity in soft-power relationships, including an emerging web of trilateral arrangements between the U.S., Australia, and Japan regarding trade and infrastructure investment.
The priority the administration places on the region is obvious in the National Defense Strategy, too. The 2018 document emphasizes the importance of “alliances and partnerships” and “webs of security relationships.” In a delineation of the global priorities, the first item listed is the objective to “Expand Indo-Pacific alliances and partnerships . . . to preserve the free and open international system.”
The stakes for Australia are high, of course. But so, too, for a U.S. relationship that in some ways is unique in the world. The list of countries that have fought alongside the United States in every significant conflict since World War II is not a long one. Australia is on it. Australia has been one of the largest non-NATO force providers in Afghanistan and Iraq. Within days of the al-Qaeda attacks on the United States on September 11, 2011, Australian prime minister John Howard spoke before the Australian parliament, invoking the mutual defense articles of the ANZUS Treaty. He told his compatriots:
If that treaty means anything, if our debt as a nation to the people of the United States in the darkest days of World War II means anything, if the comradeship, the friendship and the common bonds of democracy and a belief in liberty, fraternity and justice mean anything, it means that the ANZUS Treaty applies and that the ANZUS Treaty is properly invoked.
Howard knew firsthand how the attacks had impacted the U.S. and its leaders: He was in Washington, D.C., on 9/11 for a scheduled celebration with President Bush to honor the 50th anniversary of the treaty he later invoked.
That long history of shared triumph and agony means that all Americans should be concerned for our great friend and ally right now. Indeed, if our treaty relationship and our shared history mean anything, then we should all be concerned about the threat Australia faces today from the “silent invasion” by the PRC.
Editor’s note: This article has been updated since publication.