Taiwan trade risk; NZ friendlier for seasonal workers from Pacific Islands; Italy’s PM resigns. By Hamish McDonald.

China hawks in Donald Trump team behind Taiwan call

Italian Prime Minister Matteo Renzi addresses a press conference this week in Rome, before his resignation.
Italian Prime Minister Matteo Renzi addresses a press conference this week in Rome, before his resignation.

When it comes to foreign policy, nothing stirs the heart of American conservatives more than the idea of punishing China for its lack of democracy, so US president-elect Donald Trump’s phone call last Friday with the leader of the one Chinese polity that allows change of government through elections has brought them jubilantly out in the open.

That place is Taiwan, which since the early 1990s when it abandoned single-party rule by the Kuomintang (KMT, the Chinese Nationalist Party), has seen its government change every eight years. Tsai Ing-wen, of the independence-leaning Democratic Progressive Party, ousted the KMT in this year’s elections.

Picking up her phone call broke a precedent. Since Washington shifted its China embassy from Taipei to Beijing in 1979 following Richard Nixon’s meeting with Mao Zedong, no US president or even president-elect has spoken with, let alone met, the leader of Taiwan. So Trump’s 10-minute chat with Tsai has got a sleeping volcano puffing smoke.

Beijing initially took it as an inexperienced newcomer caught unawares by what it suggested was Tsai’s cunning initiative. Trump seemed ready to go along with that, but then issued combative tweets accusing China of currency manipulation and arguing he had every right to talk with a big customer for US military equipment. Fearing Trump is readying to shift the status quo – whereby the US guarantees Taiwan’s defence if it’s attacked but won’t accord it formal recognition – the Chinese sent in a formal protest to an equally baffled US State Department.

It may be Trump is just doing what incoming Republican presidents have tended to do: talking tough before taking office, then reverting to the status quo. Ronald Reagan sent a Taiwan delegation an invitation to his inaugural ball in 1981, then withdrew it after Chinese protest. Advisers to George W. Bush talked of fighting on the Taiwan beaches, suggesting Australians would be expected to do so too – to John Howard’s alarm – then found Beijing’s help was needed with North Korea, terrorism and avoiding military clashes.

But it now appears Washington’s China hawks took advantage of their roles in Trump’s transition team, and set up the phone call from Tsai. One of them is Stephen Yates, a national security adviser to Bush’s vice-president Dick Cheney, and way back a missionary in the Taiwanese city of Kaohsiung, and another ex-State Department official Christian Whiton.

“If a little courtesy to a democratic friend and a little truth about Taiwan could really threaten peace in the Pacific, as the experts contend, then we need to reevaluate our defence and come up with something better,” they wrote this week. “Trump is off to a good start by ignoring the experts who have led us astray.”

Also helping was Bob Dole, the only former Republican presidential nominee to back Trump. According to the Politico website, Dole connected Taiwan emissaries with Trump’s campaign, got a Taiwan delegation into the Republican convention, and helped Yates get defence pledges for Taiwan reconfirmed in the Republican platform. His law firm got $US140,000 from Taiwan between May and October.

1 . Taiwan trade risk

Twisting the dragon’s tail may be fun, and the political divergence between the mainland and Taiwan has got wider, not closer, in recent times, with democracy well established in the island and China’s Xi Jinping restoring a Maoist style of leadership.

But Beijing has red lines on sovereignty challenges. In the past month, it has seized Singaporean military vehicles being shipped back via Hong Kong from exercises in Taiwan held under a previously tolerated arrangement. Having cut off the flow of mainland tourists into Taiwan as punishment for electing Tsai, it has sent bombers and submarines around the island. When Mongolia hosted the Dalai Lama, China choked its mineral exports. It is readying to kick four more democracy activists out of Hong Kong’s legislature, in addition to the two who mucked up during their swearing-in.

The Chinese military may not yet be ready to risk invasion of Taiwan, but in the South and East China seas it’s been perfecting the tactic of swarming with fishing boats and civilian coast-guard ships. With 40 per cent of Taiwan’s exports going through China, largely electronic components and gadgets on their way to the US, it would be a casualty of a US–China trade war.

At least until Trump reverts to “normal” or a last-minute challenge to his appointment in the December 19 meeting of the electoral college, the China hawks at Washington’s conservative think tanks are urging a big shift from the status quo, lifting Taiwan’s recognition and selling it more powerful weaponry. “Taiwan is our ally,” the Heritage Foundation’s chief economist, Stephen Moore, told CNN. “That is a country that we have backed because they believe in freedom. We ought to back our ally, and if China doesn’t like it, screw ’em.”

2 . NZ more in season

Malcolm Turnbull’s attack on Bill Shorten for favouring “rich white kids” from Europe over poor Pacific Islanders in the row over the tax rate for working holiday visa holders was touching indeed. But how deep runs our concern to get our Pacific neighbours the best opportunities for seasonal work on Australian farms?

Not very deep at all. While between 35,000 and 40,000 people on working-holiday visas are employed in regional Australia each year, the number of Pacific Islanders coming in for seasonal work was just under 5000 in 2015-16. The numbers will creep up, after Canberra opened the program to agricultural sectors beyond horticulture and to tourism in northern Australia this year, but it still lags far behind the opportunities offered by New Zealand, which takes in 9000 workers from the Pacific each year. If we recruited at the same rate, proportional to population, we’d be taking in 48,000 Islanders – farm labour shortage solved, and a major boost to village economies from remitted wages, which is surely a strategic goal.

Why is this so? According to labour market expert Richard Curtain, it’s because New Zealand’s export-oriented horticulturalists have a vested interest in quality produce and are motivated to pay a bit more to look after Pacific Islanders who return year after year. Their Australian counterparts are supplying a domestic market where prices and quality are driven down by the big supermarkets. Not being exporters, they’re not worried about being exposed for using illegal and underpaid workers. A recent Fair Work Ombudsman survey found one-third of backpackers got paid in cash, and 14 per cent bribed employers to get a regional job allowing them to extend their visas. Time for some bigger, cross-government thinking here.

As if the Kiwis aren’t beating us enough, its ex-investment banker turned prime minister John Key has just done eight years in office, running consistent surpluses, and announced his retirement at the age of 55, which is five years younger than Turnbull was when he started as PM. 

3 . Italy’s PM resigns

Italy’s voters rejected Prime Minister Matteo Renzi’s referendum proposals by a margin of nearly 20 percentage points last Sunday, and Renzi sent in his resignation. A caretaker government will be formed, and possibly early elections held − but under what electoral system is unclear.

But it was not all bad last weekend for those favouring a liberal, integrated Europe. In Austria’s presidential election, the Green Party-backed Alexander Van der Bellen beat the anti-European Union and anti-migration Freedom Party’s Norbert Hofer. And in a London byelection, a candidate for the Social Democrats, who favour reversing the Brexit decision, beat pro-Brexit candidate Zac Goldsmith.

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This article was first published in the print edition of The Saturday Paper on December 10, 2016 as "Trump’s China hawks behind Taiwan call".

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Hamish McDonald is a Walkley Award-winning foreign correspondent.

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