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16 September 2020

With Greg Earl

No news from China

Last week, amid deteriorating Australia–China relations, two Australian reporters flew home from China on the advice of the Department of Foreign Affairs and Trade.

It later emerged that the Australian Security Intelligence Organisation and Australian Federal Police had executed search warrants in June on four Chinese reporters based in Australia. DFAT was concerned that China could take action against the two Australian journalists in response.

As a result of their departure, there are no Australian media correspondents in China for the first time since 1973. It is unclear when the reporters would be permitted to return – or whether they would choose to do so.

Independent news on China is available from a number of foreign sources, but the absence of Australian reporting may add to the growing sense of separation between the two countries.

Apart from a large increase in defence spending, Australia’s main foreign policy strategy for dealing with China’s growing assertiveness has been its efforts to build loose coalitions and new “mini-lateral” relationships with like-minded Asian countries that also face challenges with China.

This is a good policy and Australia should aim to be an embedded participant in this coalition-building process. But its conduct has at times left it on its own – as seen, for example, in its call for a COVID-19 inquiry, which it appeared to undertake without substantial consultation with regional neighbours.

Australia is now one of the few major countries without its own reporters in China. It is starting to look increasingly isolated.


Standing by Indonesia

Jakarta reintroduced tough lockdown rules this week, following a steep rise in Indonesia’s COVID-19 infection rate.

Indonesia has reported 225,030 cases and 8965 deaths. Its total number of cases is the second-highest in South-East Asia, after the Philippines; its death toll is the second-highest in Asia overall, after India. There are concerns that both figures are understated. 

As a close neighbour and valued diplomatic partner, Indonesia is important to Australia and so is its recovery from the pandemic. Two million Australians a year normally visit Bali. And the countries had planned to boost their economic engagement in 2020 with a new trade deal. 

The Australian government is considering how it can provide support to Indonesia as its health care system comes under pressure and its ability to deliver social assistance payments flags.

However, Indonesia may also be vulnerable to a financial crisis if rising infections cause a sharper economic downturn, leading to an outflow of capital and a need for increased government spending.

As the Australian government plans its post-COVID strategy, it should make provisions in October’s budget for a stand-by loan, in case Indonesia’s capital market deteriorates. Australia has done this previously – during the 2009 global financial crisis, for instance.

There are several ways it could finance such a loan, on its own or with other countries, possibly at no cost to the budget. And the mere fact of the loan’s existence could be enough to reassure foreign investors that Indonesia will remain stable.


Japan’s new PM

On Monday, Japan’s ruling Liberal Democratic Party chose Yoshihide Suga to be the country’s new prime minister, replacing Shinzō Abe, who resigned due to ill health after almost eight years in office. The seventy-one-year-old will serve out the remaining year of Abe’s three-year term before facing another leadership election.

Suga, who worked closely with Abe as cabinet secretary and chief government spokesperson, is seen as a safe pair of hands. His lack of international experience also suggests Abe may continue to influence foreign policy behind the scenes. 

However, Suga appears to be a more sure-footed manager of domestic issues and there is speculation he may call an early election to try to secure a personal mandate beyond Abe’s support.

Japan is Australia’s key security ally in Asia and is becoming a more important commercial partner and foreign investor – particularly as the Australia–China relationship sours.

Australia has a significant interest in seeing the stability Abe brought to Japanese domestic and international affairs maintained. But as Suga prepares to assume the role of prime minister, Australia should ready itself for less certain leadership.


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China’s wolf-warrior tactics are here to stay

“Having embarked on a path to consolidate all power to himself, it is difficult to see how Xi can break from his current course of action. In effect, that means China’s more assertive and uncompromising approach in the world will be here for as long as Xi remains in power.” Peter Jennings, The Strategist (ASPI)

Debunking the myth of China’s “debt-trap diplomacy”

“In short, the [Sri Lankan] Hambantota Port case shows little evidence of Chinese strategy, but lots of evidence for poor governance on the recipient side … Australian policymakers should avoid treating the Belt and Road Initiative as if it were being strategically directed.” Shahar Hameiri, The Interpreter (Lowy Institute)

The resilient supply chain initiative – reshaping economics through geopolitics

“An indication of the likely shifts in the post-COVID-19 global economic order is visible from the Resilient Supply Chain Initiative (RSCI) proposal mooted jointly by Australia, India and Japan … The RSCI is one of the first examples of a distinct anti-China geoeconomic alliance taking shape.” Amitendu Palit, The Diplomat

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Australia’s nuclear conundrum – a hedging strategy to save the day

“Australia should … quietly and methodically acquire the technology and materials necessary to build nuclear weapons on short notice if the political conditions require. Such a hedging strategy would allow it to gradually increase its nuclear competence and shrink the period of its strategic vulnerability.” Samvrutha Bhavani Mukilan, Australian Outlook (AIIA)

Domestic concerns still shape India’s foreign policy

“India’s internal politics are being reordered and its economic recovery from the COVID-19 pandemic is taking priority. Domestic impulses, combined with external shifts such as tensions with China, will likely push it toward more self-reliance [and] more selective engagement abroad.” Shivshankar MenonEast Asia Forum

Free from Australian Foreign Affairs

The Jakarta Method, book review by Max Walden

“Indonesia remains one of the only countries where communism is illegal. This ban is not simply a relic of the past. It is used increasingly today to criminalise activism across Indonesia – particularly when environmentalists seek to get in the way of capitalist exploitation of the country’s immense natural resources.” Max Walden, HERE

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