RUBY:

From Schwartz Media, I’m Ruby Jones, this is 7am.

Australia’s relationship with China is at its lowest ebb in decades.

Trade boycotts are impacting local businesses, and now the Chinese government has issued a fourteen point list of grievances it has with Australia.

Today, columnist for The Saturday Paper Paul Bongiorno, on the challenges Scott Morrison faces trying to navigate a tumultuous and tense moment in global politics.

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RUBY:

Paul, We've seen the trade relationship between Australia and China degrade significantly this year. So tell me, how bad has it become?

PAUL:

Well, Ruby, not even record iron ore sales to China this week can calm the nerves of other business sectors who fear Beijing has only begun to turn the screws.

Archival Tape-- Newsreader

“Yesterday, China imposed an import ban on four Australian red meat abattoirs that came just a day or so after it flagged plans to introduce an 80 per cent tariff on Australian barley exports..”.

PAUL:

The Chinese government has already announced a long list of Australian goods it's banning: it started with barley, but soon moved to other key exports like coal, timber and copper. I think we're up to about six billion dollars worth of exports annually that are being blocked.

Archival Tape-- Newsreader

“Tonnes of Australian lobster has been left on the tarmac at a Chinese airport. The lobster reportedly is facing Chinese custom clearance issues…”

PAUL:

Then we saw extraordinary scenes with literally tons of Australian lobsters stuck on the tarmac at Chinese airports as another ban was extended to fresh seafood on quarantine grounds.

Archival Tape-- Newsreader

“Immediate bans from November the 6th on all Australian imports of barley, grains, wine, timber, coal, lobsters and copper ore…”

PAUL:

And recently, the Chinese government has raised the stakes again, ordering importers to stop purchasing Australian wine. The market there is worth about a billion dollars to our local growers. But it's not just goods that are threatening our economic relationship. The prospect of one million Chinese tourists a year returning to our shores, well, they're bleak, as are the numbers of Chinese students in our universities and colleges. That sector alone is worth 13 billion dollars a year.

RUBY:

So things aren't looking good, Paul. And last week, Scott Morrison went to Japan, which is a country that has also had a strained relationship with China. So what impact did that trip have on Australia/China relations?

PAUL:

Well, there's no doubt the pandemic-defying trip to Japan last week was to cement a reciprocal access agreement for our military, and it certainly antagonised Beijing. The fact that the PM went personally rather than zooming a meeting, I think even underscored this. Not that the Prime Minister will admit to it. Indeed, he's full of naive assurances to the contrary.

Archival Tape-- Scott Morrison

“And we've got a comprehensive strategic partnership with them. Our trade with them is that while there are tensions in a number of particular areas currently, it is still at very high levels, record levels…”

PAUL:

However, former Prime Minister John Howard in an Asialink podcast had a reality check for Scott Morrison

Archival Tape-- Don Greenleys

“So Mr Howard, firstly thank you for agreeing to the interview”

Archival Tape-- John Howard

“It’s a pleasure.”

PAUL:

The podcast was released just before the Prime Minister's much hyped Japan trip. And according to Howard, the only way to manage the Australia-China relationship is to have a good relationship leader to leader.

Archival Tape-- John Howard

“Look, you've got to have a good personal relationship. And the Chinese...the key to our relationship is to accept that a country like Australia - what matters to the Chinese is the relationship between our head of government and their head of government…”

PAUL:

Howard told interviewer Don Greenleys, his early advice to Julia Gillard soon after she became PM was to get to Beijing as soon as possible because, Howard says, a head to head meeting with the Chinese leadership.That's what matters.

Archival Tape-- Don Greenleys

“Are you giving the same advice to Scott Morrison?”

Archival Tape-- John Howard

“Oh, yes.”

Archival Tape-- Don Greenleys

“Hmm.”

Right. And so Scott Morrison hasn't had one of those head to head meetings since becoming Prime Minister. Why is that?

PAUL:

Well, the obvious answer is because relations are so frosty and no one's on speaking terms and the way things are going. Morrison will be the first Australian PM since Billy McMahon in the early 70s not to wrangle an invitation to visit Beijing.

Well on his return from Tokyo. The Prime Minister had a virtual appearance at the Business Council's annual general meeting, and then Morrison told business leaders worried about their continuing prospects in dealing with China and doing business with China... well, he said he was always willing to pick up the phone, but he wasn't ready to attend a meeting with China that would trade away any of Australia's interests or values. In other words, it had to be on his terms.

RUBY:

And so what is the effect of all of this on the relationship, Paul? Because, of course, we recently heard about this list of grievances that the Chinese embassy has towards Canberra. How seriously should we be taking that?

PAUL:

Well, it's pretty serious when the Chinese embassy, in a sense, leaks or gives unofficially a list of grievances to the Sydney Morning Herald and The Age. Some of those were just critical of the fact that our free press writes, you know, highly critical articles about China. I think any Prime Minister would dismiss those. But it also goes to the way in which our government has antagonised Beijing.

Foreign interference laws and the way we're holding up foreign investment review decisions. All of these things actually point to China's belief that Australia is being antagonistic and sees China as an enemy. But I've got to say, it's one thing for the Prime Minister to dismiss a list of grievances from the embassy in Canberra as unofficial, but it's entirely a painful reality when they are accompanied by unofficial trade bans as well. But what's hindering Scott Morrison's ability to repair the relationship, Ruby, is the uncompromising antagonism of the anti-China hawks in his own government.

RUBY:

We'll be back in a moment.

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RUBY:

Paul, let's talk more about the attitudes towards China within the Coalition ranks, because there are a number, as you say, of influential MPs who are agitating on this issue, aren't there?

PAUL:

That's true. And it's instructive to look at the Wolverines - now, that's a nickname they gave themselves; it's a group of MPs formed to speak out against China's expansion. And while it has a couple of Labour members, most are Liberals or Nationals. And leading Conservative backbencher Andrew Hastie, well, he's a foundational member. Now, Hastie is a former Special Air Service commander in Afghanistan, and he's also chair of the influential Joint Parliamentary Committee on Intelligence and Security. Well, last year, he was condemned by Beijing for comparing China to the rise of Nazi Germany. And that's a sentiment that was repeated by veteran Liberal and former Abbott government minister, Eric Abetz.

RUBY:

What did Eric Abetz say?

PAUL:

Well, Abetz told the NCA Newswire service last week that Australia should boycott the 2022 Winter Olympics in China because of the treatment of the Uighur population there and the crackdown on protests in Hong Kong.

Archival Tape-- Eric Abetz

“Terrible abuse of human rights, be it to the Tibetans, to the Uighurs, Christians, the Falun Gong, to the ripping up of the UN sanctioned international agreement with Britain about Hong Kong, and the way they’re treating the Hong Kong democracy…”

PAUL:

He said the similarities with the 1936 Berlin Olympics are too big to ignore.

Archival Tape-- Eric Abetz

“They did not deserve the prestige and privilege of hosting such an important international forum.”

PAUL:

And that's not all - Abetz, in an eerie return to the Cold War era of McCarthyism, last month in Senate estimates, called on three Chinese Australians to unconditionally denounce the Chinese Communist Party dictatorship.

Archival Tape-- Eric Abetz

“I'm not asking you to support, I'm asking you to unequivocally condemn. Unless we condemn these activities they'll just keep on going. It would be like somebody saying, 'I don't support the Holocaust.' No. We have to unequivocally condemn the Holocaust…”

PAUL:

This racial profiling calling into question the loyalty of Australia is one point three million of Chinese heritage drew no rebuke from the Prime Minister.

RUBY:

Mm. And so where does Scott Morrison fit into this? Do we know what he makes of statements like this from people like Eric Abetz?

PAUL:

Well, what you have to remember is that Morrison only has a majority of two in the House of Representatives, and in fact, he has no strong faction backing him within the parliamentary Liberal Party, so he can't afford to pick fights. But for all the virtue signalling from the anti-communist brigade in the parliament, there is an irony that can't be lost on the Prime Minister. After being dazzled and duchessed by Trump - and that's the way Malcolm Turnbull puts it - the Australian leader, well, he was played off a break. Morrison's ego buying into Trump's Covid China blame game drew heavy retaliation that wasn't, in fact, visited on the United States.

RUBY:

So you're saying Australia isn't managing its relationship with China as well as the United States is?

PAUL:

Well, consider this, Ruby: Trump in January signed the phase one trade deal where China undertook to buy 200 billion dollars worth of American farm produce and other goods. Already, American agriculture exports have risen 70 per cent at the expense of Australian farmers, one former senior diplomat told me. We may well see wine from California or lobsters from Maine or grains from the American Midwest replace Australian exports.
Trump, this diplomat noticed, didn't walk away from this deal at any of his giant campaign rallies, where he, of course, demonised China.

Of course, the fact is the economies of China and the United States are enmeshed in a way that makes them mutually interdependent in a much bigger way, I should say, than is the case for China with Australia. Former Prime Minister Kevin Rudd, now president of the prestigious Asia Society think tank in New York, says China is pursuing a highly systematic strategy to close the gap with the United States; economically, militarily and technologically. But Rudd believes Xi Jinping plans to consolidate his position as paramount leader in China and to be around for at least another decade, pursuing not so much his assertive foreign policy but his aggressive foreign policy. And if that's the case, it will be a challenge requiring a better performance from the Morrison government than we've seen so far.

RUBY:

Paul, as always, a pleasure to talk to you today.

PAUL:

Thanks, Ruby, bye.

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RUBY:

Also in the news today…
South Australia has recorded two new coronavirus cases in the past day and both are believed to be linked to the existing Parafield cluster.

One of the cases was linked to the Woodville Pizza Bar. The state’s short-lived hard lockdown was initially caused by the government believing the virus had spread to casual contacts of the pizza bar.

And NSW premier Gladys Berejiklian has admitted that $140m in grants awarded to councils in the lead up to the last state election were effectively pork barrelling, but said that there was nothing illegal about it.

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7am is a daily show from The Monthly and The Saturday Paper. It’s produced by Ruby Schwartz, Atticus Bastow, and Michelle Macklem.

Elle Marsh is our features and field producer, in a position supported by the Judith Neilson Institute for Journalism and Ideas.

Brian Campeau mixes the show. Our editor is Osman Faruqi. Erik Jensen is our editor-in-chief.
Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

New episodes of 7am are released every weekday morning. Subscribe in your favourite podcast app, to make sure you don’t miss out.

I’m Ruby Jones, see you next week.