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20 June 2018

With Jonathan Pearlman

China’s overt coercion

Recent efforts to combat China’s covert interference in Australia have led to heated public debate. But there is a growing area of meddling that receives less attention, even though it has potentially greater consequences: China’s use of economic clout to influence Australian corporations and governments, and those of other Asia-Pacific nations. 

Such power was on display earlier this month, when China persuaded Qantas to change its references to Taiwan to ensure the island was not referred to as a separate country on maps or in drop-down menus. China’s aviation authority stated that more than forty airlines had agreed to similar demands.

Twenty years ago, Chinese tourism to Australia was almost non-existent – between 1996 and 2016, the annual number of short-term visitors from China to Australia increased from just over 50,000 to more than 1.2 million. Qantas now has daily flights to several Chinese cities, and code-sharing agreements with China’s two biggest airlines, China Southern Airlines and China Eastern Airlines. This was potentially at risk if Qantas did not reclassify Taiwan.

Beijing has also been making it more difficult for Australian exporters of products such as wine and beef to bring their goods into China. This has been blamed on worsening relations between the two countries, which in turn has been attributed to Australia’s proposed foreign interference laws. 

Of course, all countries use their economic strength to promote or pursue political goals. The most obvious examples are international sanctions and foreign aid, which have traditionally been the preferred tools of the United States. But China’s use of economic coercion has taken a different form, and its practices are rapidly evolving as it becomes the world’s largest economy and is able to harness its trading power for other purposes.

China is already the number-one trading partner for dozens of countries, including Australia. Its trade and investment reach will extend further as it pursues its Belt and Road Initiative, which will involve rail, port, road and other infrastructure projects in more than seventy countries. 

The Chinese Communist Party’s involvement in the decision-making of local businesses and authorities allows it to exercise influence in more subtle, and more targeted, ways than blanket sanctions or grants of foreign aid. China has repeatedly restricted specific countries and companies from importing or exporting goods or becoming involved in government deals. For instance, following a dispute with the Philippines in 2012 over Chinese fishers operating in disputed waters, Beijing curbed imports of Filipino bananas, claiming that it had found bugs in some shipments – even though bugs had been found in such shipments to China before, without repercussion. 

Last year, South Korea allowed the United States to deploy the THAAD missile defence system in the South Korean county of Seongju, which prompted a series of responses from China. These included boycotting South Korean multinational car manufacturer Hyundai, conducting inspections at supermarkets owned by Korean–Japanese conglomerate Lotte – which led to most of the firm’s Chinese branches being closed – and suspending trips to South Korea by Chinese tour groups. Visitor numbers dropped about 60 per cent before the stand-off was settled.

Such pressure is hard to resist. Companies often need government and public support to do so, while governments need strength of resolve.

The United States government, unlike many of the country’s firms, has not buckled to Chinese pressure. It described China’s letter requiring airlines to change references to Taiwan as “Orwellian nonsense”. 

But countries such as Australia, which are economically weaker than the United States and more dependent on China for trade, are finding it harder to develop a coherent response. Malcolm Turnbull defended Qantas’s decision, saying its change was consistent with Australia’s One China policy. Frances Adamson, secretary of the Department of Foreign Affairs and Trade and a former ambassador to China, took a less diplomatic line. “The government cannot be in a position to tolerate the exercise of economic coercion,” she said.

In the coming years, China’s economic growth will only increase its powers of coercion, and the Chinese government will be more likely to use these powers. For companies and governments outside China, the price of resistance will be steep. The challenge for Australia is not to uncover China’s shadowy tactics but – and this may prove more difficult – to develop a clear, consistent response, and a willingness to withstand any associated costs.


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North Korea’s Kim makes another trip to China. That complicates things for Trump

“China is less focused on getting Kim to give away his weapons than on getting him to fall into line.” Emily Rauhala,the Washington Post

2018 Lowy Institute poll

“There is no question that Donald Trump’s presidency has eroded Australians’ trust and confidence in the United States as a responsible global actor … Yet despite concerns about the current occupant of the White House, Australians’ support for the US alliance has held firm.” Alex Oliver,Lowy Institute

China is using terrorist threats to culturally cleanse its west

“Beijing has consistently appropriated the lexicon of the post-9/11 ‘war on terror’ to label Uyghur opposition as ‘religious extremism’, linking it to the influence of regional and transnational jihadist organisations such as al-Qaeda in order to generate diplomatic capital for the ongoing repression of Uyghur autonomist aspirations.” Michael Clarke,East Asia Forum

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The outrageous racism that “graced” Arab TV screens in Ramadan

“While in the US the use of blackface has been largely phased out, in Arab cinema it is constantly used in order to have non-black Arabs cast in black roles. They often don blackface, put on exaggerated fake buttocks, thick Afro curly hair and bright-red lipstick.” Hana Al-Khamri,Al-Jazeera

Flexible power – India and International Day of Yoga

“In 2017, India did not make it into the Soft Power 30, an index of the world’s top 30 soft power nations. Indian commentators bemoaned that while everyone appears to love yoga, Westerners reap far more material benefits than do Indian teachers or India’s spiritual tourist industry.” Shameem Black,Policy Forum

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Source: Global Trends – Annex Table, UNHCR



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