7/26/2023

China’s trade war on Australia was harmless so stop grovelling. Really?



Tuesday, 25 July 2023

As with most things Albo, he said one thing to get elected then did another in power.

During the Chinese economic coercion push against Australia before and after COVID, Albo consistently defended Beijing against Canberra.

However, a few months before the election he backflipped and said “China had changed”.

The moment he got elected he backflipped again and began Labor’s great grovel to Beijing to restore trade relations.

The kowtowing has been so daft and humiliating that it has been noticed as far away as Washington with some bewilderment.

Today we can add further texture to the great grovel with the release of a Productivity Commission report that shows how harmless the trade war was to the Australian economy:

Australian exports proved to be mostly resilient against these trade measures. For example, barley and coal exporters were successful in finding other markets. The value of beef and wheat exports to China did not experience significant falls – likely due to the partial nature of the measure, which was limited to certain abattoirs and shipments.

On the other hand, there were falls in exports of Australian lobsters and wine, affecting producers whose exports were concentrated on the Chinese market. That said, after initially increasing exports to their original markets, wine exporters developed new markets. In the case of products with limited perishability, like wine, the costs to exporters might be from deferred sales, rather than not being able to sell the good at all. And some exporters may have even enjoyed an increase in the value of stock that ages well. While these measures do not appear to have imposed substantial costs on the Australian economy as a whole, some businesses paid a heavy price.

…The effect of China’s trade measures on some Australian exporters could have had broader implications on the Australian and world economy after businesses, consumers, governments, workers and capital owners adjusted to changes in the trade environment. The Productivity Commission modelled the economy-wide effects of the trade measures. This section presents the results of this modelling.

The results indicate how trade adjusts to the disruptions and that although some industries might have incurred significant costs as they adjusted, economy-wide and global effects tend to be limited. Although the actual restrictions took many different forms (table C.1), they are modelled here as a tax imposed on Australian exports of the relevant goods to China; the tax is calibrated to increase the tax-inclusive export price to the point of making the export prohibitive. The model is designed to illustrate how Australian and global production and trade reorganised to adapt to the disruption.

The impact on growth was not a rounding error, as we said amid the wall-to-wall hysteria in the iMSM at the time.

Given China’s near-complete powerlessness, why is Albo face down licking Beijing’s boots instead of taking heed of the warning and building Australian economic resilience for the next round of Chinese warfare?

Anonymous

1 comment:

  1. Seven in ten Chinese Australians believe Australia should remain neutral in the event of a military conflict between China and the United States — a view shared by only half of the Australian population. Yet there are differences within the Chinese Australian communities. Of those born in mainland China, 73 per cent say Australia should remain neutral compared to 65 per cent of those born in Australia and 61 per cent of those born in Hong Kong.

    But the headlines and aggressive political rhetoric about China homogenises and reinforces public perceptions about China and inadvertently, Chinese Australians.

    The political rhetoric about China has changed under the Labor government. But more work needs to be done to create a cohesive Australian society in the face of persistent discrimination and negative portrayals of China and ethnic Chinese in the media.

    The evolution of the Australia–China debate and its impact on Chinese Australian communities show that foreign and defence policies and national security should not be treated as separable from domestic politics. Public discussions about such policies have a quantifiable impact on a large proportion of Australia’s population.

    How Australia should navigate the intersection of national security and social cohesion with China is uncertain. Increasing cultural and linguistic diversity among Australia’s national security and intelligence community could help.

    Australia’s Chinese diaspora and their bicultural skills should be channelled as an asset into helping navigate the Australia–China relationship.

    Workforce diversification is not a new argument and some will contend that it will not change Australia’s basic orientation when it comes to national security. But from a technical expertise perspective, Australia’s intelligence community is lacking cultural and linguistic diversity. Government departments involved in managing Australia–China relations appear to be ill-equipped for the strategic moment when only 1.2 and 1.7 per cent of Department of Foreign Affairs and Trade staff and the defence workforce respectively are proficient in Mandarin.

    Diversity in key intelligence institutions creates ‘a synergy of different perspectives’ to address complex issues that can increase the array of policy options available to governments. Australia could start seeing Chinese politics in a more nuanced way rather than as a pyramid where President Xi Jinping sits atop. There is a lot of policy entrepreneurialism at the local level in Chinese politics and local officials often conduct government affairs that subvert the complete control of the Chinese Communist Party.

    Perhaps those who make calculations about China’s role in Australia’s region will see that a myriad of interests shape China — and that a one-size-fits-all policy does not suffice when managing Australia–China relations — if they accept that China is more complex than Xi Jinping and the Chinese Communist Party. Greater cultural and linguistic diversity in government will ultimately shape how Australia sees Chinese Australian communities too. They are pluralistic and diverse with skills that can benefit the nation.

    The lack of diversity across key Australian public and international facing institutions presents huge obstacles when addressing the complex nature of Australia’s relationship with China, let alone with the world.

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