Paul Bongiorno
Covid-19 inquiry call infuriates Beijing

Australia’s relationship with its biggest trading partner, China, has plunged to depths not seen since formal recognition of the Communist-governed state 48 years ago.

Then, the “Middle Kingdom” – a reference to the ancient Chinese belief it was the centre of the world – was a sleeping giant. It was only just beginning its awakening. Now it is the world’s second-largest economy, locked in increasingly aggressive competition with the United States for global influence and power.

The stakes for Canberra could not be higher, with business leaders and exporters privately furious at the government’s bumbling diplomatic performance over China and coronavirus. Publicly, they are urging a more restrained and pragmatic approach. On Wednesday, mining billionaire Andrew “Twiggy” Forrest told ABC Radio that Australia can’t afford to have only one best friend. He put it this way: “We do not choose our best friends, because we are a small country and we need to have great relations with them all.”

These concerns reflect the fact our sales to China – of commodities, primary produce, education and services – rose by 24 per cent last year to $153 billion. That’s a long way ahead of our next largest customer, Japan, at $62 billion and South Korea at $28 billion. And despite calls from the growing number of Chinese hawks in the government and sections of the commentariat to diversify, other markets in Asia are much smaller again and would take precious time to develop.

Beijing’s anger at Australia stems from our being one of its most vocal critics over the coronavirus pandemic. That came through loud and clear in an interview its ambassador, Cheng Jingye, gave to The Australian Financial Review published on Monday. The ambassador warned the government in the interview that its highly visible pursuit of an internationally established independent inquiry into the pandemic could lead to severe retaliation. He said it could trigger a Chinese consumer boycott, which would have an impact on students and tourists visiting Australia, and on increasingly popular exports such as beef and wine. Billions of dollars would be at stake.

That triggered panic stations in the government. The head of the Department of Foreign Affairs and Trade, Frances Adamson, called Cheng later that morning and in a long discussion in Mandarin sought to calm the troubled waters. Adamson is a Sino expert and former ambassador to China. She was an international adviser to Malcolm Turnbull when he was attempting to heal his relationship with the superpower.

In a brazen breach of diplomatic protocol, the Chinese embassy released a detailed statement of the phone discussion. It claimed Adamson admitted her department had no detail on the proposed investigation – something Foreign Minister Marise Payne also confessed.

The Chinese statement claimed that “Secretary Adamson tried her best to defend Australia’s proposal about the independent review, saying the proposal neither has political motive nor targets China. She also admitted it is not the time to commence the review now … She further said that Australia does not want the matter to have any impact on [the] Australia–China relationship.”

Fanning China’s suspicion of Canberra’s motives is the fact Prime Minister Scott Morrison discussed the pandemic in a phone call with United States President Donald Trump the week before. According to a briefing note from the prime minister’s office, they discussed the “importance of transparency”. Trump, whose inept and derelict handling of the pandemic has put him under extreme pressure in an election year, has since announced he is launching his own inquiry into China. The PMO insists the Morrison government’s inquiry proposal has nothing to do with Trump’s. But last week the prime minister escalated matters by suggesting the World Health Organization could recruit investigators similar to United Nations weapons inspectors – that is, investigators who can enter countries without their permission. This is a laughable proposition. China would not brook any unwelcome interference in its affairs on its soil.

Twiggy Forrest says he can’t see the rush for a Covid-19 inquiry, which he accepts is common sense. He says it must not be “a Chinese inquiry” as that “would make it instantly political”. Forrest believes any inquiry should be held after the US election, because “there’s a bloke in the White House who really wants to stay there and he’s pushing blame as fast as he possibly can from anywhere else but himself”.

It may be too late to persuade Beijing of our bona fides on this. The embassy statement went on to say “that no matter what excuses the Australian side has made, the fact cannot be buried that the proposal is a political manoeuvre”. Cheng, it says, “called on Australia to put aside ideological bias, stop political games and do more things to promote the bilateral relations”. Forrest could not agree more, and pointed to the way he had used his network of Chinese contacts to secure 10 million Covid-19 tests for Australia.

At a news conference in Melbourne to announce the tests, Forrest out of the blue invited Chinese consul-general Long Zhou to speak. Anti-China government hawks, such as the influential chair of the parliamentary joint committee on intelligence and security, Andrew Hastie, accused the billionaire of interfering in foreign policy. Hastie told The Australian that Forrest should focus “on his business interests”, put Australia first and not enable “the Chinese Communist Party to ambush a Commonwealth press conference”. Health Minister Greg Hunt was unfazed though, and told the media, “Today is actually an example of co-operation and success.”

By midweek the prime minister and his colleagues were all saying it was “not a remarkable position” to call for an international inquiry into how the pandemic occurred and what lessons should be learnt. The minister for Trade and Investment, Simon Birmingham, told the ABC: “We won’t be changing our public policy position on … such a serious public health matter in the face of any threats of coercion from any other nation.”

In a statement, DFAT noted “with regret that the Embassy of the People’s Republic of China has issued a statement releasing purported details of official diplomatic exchanges”. It was hardly a denial of the embassy’s version. The statement concluded: “For its part, the department will continue to pursue Australia’s interests with all foreign missions according to the highest standards of professionalism, courtesy and respect for our counterparts.”

Seasoned diplomats told The Saturday Paper that the same can’t be said for the way Morrison and Payne put their proposal on the table. It appeared a calculated way of getting up Beijing’s nose, and exacerbated the trouble caused a week earlier when Home Affairs Minister Peter Dutton called for China to be “more transparent”. He was accused by the embassy in Canberra of “parroting” US propaganda.

Dutton’s call for a rethink of our relationship with China after the pandemic came back at him and Australia when the editor of the state-run Global Times, Hu Xijin, wrote that “after the epidemic, we need to have more risk awareness when doing business with Australia and also when we send our children to study there”. Hu also wrote: “Australia is always there, making trouble. It is a bit like chewing gum stuck on the sole of China’s shoes. Sometimes you have to find a stone to rub it off.”

Richard McGregor, a China expert at the Lowy Institute, wrote a column for Guardian Australia saying “it seems strange that Marise Payne … went public with Canberra’s idea for an inquiry before she had built support behind the scenes for the idea”. Indeed, according to the PMO, Morrison’s chats with world leaders in Europe and Asia found sympathy for the idea but reluctance to act on it while they were in the midst of the crisis. That was certainly the message French President Emmanuel Macron gave the prime minister.

Hugh White, emeritus professor of strategic studies at the Australian National University, says China’s “full co-operation is imperative” for any inquiry to succeed. He says China’s emergence as a major power is something that will not go away. As a major power, “China can impose costs on us at low costs to themselves”. For perspective, he says, while China is our biggest trading partner, it is also the biggest trading partner for 50 other countries.

Former prime minister John Howard, who had to do some serious fence-mending of his own with the Asian giant, says Australia should tread carefully with Beijing. He told The Australian: “We have to be very careful … we still have a very important trade relationship … and very important people-to-people relationship with China.”

Just how important was spelled out by Treasury secretary Steven Kennedy on Tuesday. He told the senate’s Covid-19 committee: “We have not seen a shock hit this fast in any period.” It took the Great Depression two years to get to higher job losses. Now, he said, “these movements are happening in just a couple of months”. He warned there would be permanent job losses: “We have never seen an economic shock of this speed, magnitude and shape, reflecting that this is both a significant supply and demand shock.”

While the China hawks want to put “sovereignty” ahead of a Beijing-propelled return to prosperity, millions of jobless Australians and failed business people will be hoping we do it in a way that is much more diplomatically competent than we have seen this week.

This article was first published in the print edition of The Saturday Paper on May 2, 2020 as "A fragile state of affairs with China".

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