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10 March 2021

With Greg Earl

China choices

China’s legislature, the National People’s Congress, began its annual meeting last week. Its discussion so far has underlined the competing images China now presents to the world.

Premier Li Keqiang announced a target of at least six per cent annual economic growth for the year. Li’s announcement signalled an unexpected return to China’s traditional target-setting after the practice was abandoned last year.

The economic target reflects China’s confidence that it has overcome the challenges of COVID-19, and continues to be one of the world’s fastest growing large economies and an increasingly attractive commercial partner for many countries and international businesses. Some analysts think growth will be even higher as China recovers from its pandemic slowdown.

The NPC vice-chairman Wang Chen followed Li’s economic forecast by announcing changes to the way members of the Legislative Council of Hong Kong are appointed, which seem set to end decades of slow progress towards democracy in the former British colony. The council is expected to gain members, but fewer councillors will be directly elected.

The revamp of the Hong Kong legislature shows that China is relentlessly winding back the “one country, two systems” approach that has existed since it regained control of the territory in 1997.

These initiatives intensify the difficult choices Australia faces in its approach to China. The country’s predicted high economic growth means it will remain an attractive export market, despite its recent trade sanctions. But its new crackdown on democracy in Hong Kong means Australia may need to step up its assistance to people who want to leave the territory.

WTO’s new era

The World Trade Organization’s new director-general, Ngozi Okonjo-Iweala, was appointed after a long impasse over who would get the job. Since assuming the role, she has moved quickly to make her mark on the institution.

In her first week, the former Nigerian finance minister backed the removal of restrictions on trading pandemic-related goods, urged pharmaceutical companies to give more vaccine production licences to developing countries and claimed a role for the WTO on climate change.

But she has also run up against some familiar roadblocks. India and South Africa are again trying to limit agricultural trade rules. And the Biden administration – which supported Okonjo-Iweala’s bid for the job, unlike the Trump administration – has reiterated the view that US security interests should prevail in trade disputes.

While the director-general has a high profile, the WTO does not have the rule-making or financial power of its peers, such as the International Monetary Fund and the World Bank. Okonjo-Iweala will need considerable persuasive skills to stop countries pursuing alternatives to established WTO rules.

Australia is a trade-exposed country, meaning its economy is significantly affected by fluctuating demand for its goods and services. Because of this, it has long backed the WTO’s dispute-resolution system. However, amid standstills experienced by the WTO in recent times, Australia has also experimented with alternative approaches – like coalitions of the willing – to push ahead with new trade agreements.

Okonjo-Iweala is pressing to make the WTO more relevant, just as trade is starting to recover from the pandemic. Australia should support those efforts.

Myanmar stand-off

Australia has suspended its defence cooperation program with the Myanmar military in response to the junta’s growing violence against those protesting the recent coup.

It is also redirecting its Myanmar aid program to NGOs that support refugees and minorities, and away from the government channels that were used before the military takeover.

Australia has been slower than some Western countries to impose new sanctions on the military, because the government has been supporting Indonesian-led efforts to encourage dialogue between the junta and democracy advocates.

While these efforts have made little obvious progress, they remain the most promising approach to de-escalating the deadly street confrontations now occurring, and they deserve continued support from the Morrison government.

If two important communities in Myanmar take a clearer position in the current stand-off, Australia may need to make more challenging decisions.

Buddhist monks played an important role in the 2007 protests that paved the way for the return of democracy to Myanmar in 2015, but they have not been prominent in the recent protests.

Ethnic minorities have long resisted central authority and, in some cases, control their own territory with militias. So far, some have opposed the coup, due to longstanding tensions with the military, but they are not necessarily aligned with the former government.


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