Problems with One Belt One Road. Democrat wins Alabama senate seat. Australian silence on Nobel Peace Prize. By Hamish McDonald.

Nuance needed with China

Democrat senator elect Doug Jones on election night this week in Birmingham, Alabama.
Democrat senator elect Doug Jones on election night this week in Birmingham, Alabama.
Credit: Justin Sullivan / Getty Images

Regardless of who wins in Bennelong on Saturday, the brawling in Canberra over Sam Dastyari and his Chinese links leaves a much-sharpened debate over Australia’s foreign policies in the face of the emerging strategic rivalries in Asia.

As is their wont, the politicians have been putting the boot into each other as if no one outside the country is going to notice. Yet it’s put an unnecessarily specific anti-Chinese slant to the mooted new laws on foreign influence-buying and cyber-sabotage, and it has been noticed in Beijing. No more the zhengyou (true friend) that Kevin Rudd proposed, one that quietly takes you aside and suggests you behave differently.

Don’t be surprised if some “punishment” arrives. The Chinese leaders won’t damage their own immediate interests by cutting back on the materials their economy needs from Australia, but there could be some retaliation elsewhere. The 1.3 million Chinese tourists who arrived in the year to September, spending $10 billion or 25 per cent of tourism earnings, form a stream that can be turned off, as Beijing showed in its recent row with South Korea over a United States anti-missile battery. As can the 140,000 Chinese students, 30 per cent of a sector earning $22 billion a year. The daigou trade in baby formula and other high-value items is open to restriction by a thousand bureaucratic cuts.

Nor are new migrant groups from Asia as marginalised as previous arrivals often were for the first generation or two. As George Megalogenis recently observed in Australian Foreign Affairs, the template has changed: “The typical twenty-first-century migrant from China skips the first generation of struggle. They land between the middle class and the richest either as a tertiary student or a skilled worker. Their wealth and power come from who they were in China, not what they become in Australia. And this presents a dilemma for policymakers in Australia, because Beijing views its twenty-first-century emigrants as an extension of their state.”

This is a bit unfair to the large numbers of Chinese migrants who do build up their capital from a small seed through long hours in less fashionable parts of our cities. And whatever the United Front Work Department cadres back in Beijing might hope, their pride in Chinese history and culture does not often include the record of the People’s Republic.

Megalogenis does expect Beijing’s monitoring will be counterproductive, driving new arrivals deeper into Australia’s multicultural society. “But policymakers should not underestimate the unique circumstances at play,” he wrote. “This is the first time in Australia’s 229-year settler history that the elites of a rising nation have come here with their mother country keeping a ‘watchful eye’ on them.”

When the dust settles on the Dastyari affair and Bennelong, we could do with a more reasoned debate on foreign influence and relations with China and other powers. Maybe Julie Bishop could table her department’s new foreign policy white paper and invite a parliamentary debate? The white paper is conspicuously short on suggestions about developing the China relationship, while touting greater military integration with the United States. We are leaving the investments we should be making to China: language teaching to its Confucius institutes, care of students to embassy propagandists, the tourist experience to Chinese guides. Not surprisingly, Beijing controls the message.

China’s Belt let out

While so many of our strategic analysts are whipping up panic with extrapolations of China’s economic growth far into the future, the great trillion-dollar geopolitical initiative of Xi Jinping called One Belt One Road (OBOR) is already running into obstacles.

Pakistan’s politicians are just waking up to the fact that China will get 91 per cent of revenues expected from the $US62 billion China–Pakistan Economic Corridor, linking the Chinese-built port of Gwadar and a free trade zone exempt from Pakistani taxes to western China. Pakistan’s share and more will go to repaying a $US16 billion debt, at 13 per cent interest including a 7 per cent “insurance” premium.

With this experience, Pakistan’s government has just rejected a Chinese offer to fund its $US14 billion Diamer-Bhasha Dam in the Pakistani zone of Kashmir, and has removed the project from the China–Pakistan corridor scheme.

In Gwadar itself, a Chinese state-owned company has just announced plans for a residential enclave to be known as China Pak Hills, with this and other gated communities expected to be home to half a million Chinese workers and their families. Pakistan’s army will be fielding about 12,000 troops to protect the corridor, which passes through territory where spies from Delhi’s Research and Analysis Wing have long been blamed for stirring up revolt among Baloch tribes.

Across in Sri Lanka, the government has been unable to repay Chinese loans for the $US1.5 billion container port, trade zone and airport built at Hambantota, the home town of former president Mahinda Rajapaksa. The port was supposed to be a hub in the OBOR sea route to the West, but shipping companies have stuck with the existing container port at Colombo. The loans have been quietly swapped into equity, meaning the Chinese banks are left with ownership of this white elephant. India is meanwhile offering $US300 million for a lease on the Hambantota airport, which would scupper any Chinese attempt to use the nearby seaport as a naval base.

Harvest Moore

Alabama, as Neil Young might put it, had the rest of the Union cheering it along on Tuesday as it voted against the Republican candidate for a US senate vacancy, former judge Roy S. Moore, after he was accused of sexually assaulting numerous teenage girls in his younger days.

Doug Jones, a former federal attorney who earlier in his career successfully prosecuted Ku Klux Klan members for the murder of four black girls, became the first Democrat to win a senate seat from the state in 25 years, after black voters turned out in higher than usual numbers and many Republicans abstained. The Republicans now hold the senate by a one-seat majority, plus Vice-President Mike Pence’s casting vote. The result was a heavy rebuke to President Donald Trump – facing his own renewed allegations of sexual molestation – who loudly backed Moore. It also damaged his close ally, Breitbart News publisher Steve Bannon, who campaigned for Moore. Rupert Murdoch’s conservative bastion, The Wall Street Journal, editorialised against Bannon having any role picking Republican candidates for the congressional midterms in November. “Mr Bannon is for losers,” it said.

Nuclear eyed

True to form, the Turnbull government sent no one nor any word of congratulations to the ceremony in Oslo last weekend where this year’s Nobel peace prize was awarded to the International Campaign to Abolish Nuclear Weapons, an initiative started in Melbourne that resulted in a vote at the United Nations by 122 countries – not including Australia – for a treaty banning nukes.

As we have noted, more explicit reliance on the US nuclear umbrella has crept into Canberra policy documents under the present Coalition government. Two of our defence pundits, Hugh White and Catherine McGregor, have suggested Australia get its own nuclear weapons if that US guarantee starts to look unreliable. Paul Dibb suggested reducing the technical “lead time” just in case.

Meanwhile, there could be advantages staying out of the nuclear winter that Trump and Kim Jong-un are risking in the northern hemisphere. In an interview with the Financial Times, the Pentagon Papers whistleblower, Daniel Ellsberg, offered the prospect of some salvation, if in uncomplimentary terms.

“The human race would not go extinct from a nuclear winter,” Ellsberg said. “One or two per cent of us would survive, living on molluscs in places like Australia and New Zealand. Civilisation would certainly disappear. But we would survive as a species.”


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This article was first published in the print edition of The Saturday Paper on Dec 16, 2017 as "Slow boot to China".

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Hamish McDonald is a Walkley Award-winning foreign correspondent.

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