China recently imposed anti-dumping duties of up to 212% on Australian wine, the latest in a slew of measures curbing imports from coal to copper to barley. As China’s Foreign Ministry spokesperson subsequently said, ties between Beijing and Canberra deteriorated because Australia “took wrong measures on issues bearing on China’s core interests.” To Beijing, the attacks on Australia are meant to deter others like the European Union, Canada and Japan from joining a US-led campaign to counter China’s rise. To that end, Communist Party officials see the current Australian government as an easy target: China accounts for about 35% of Australia’s total trade, three times more than the next highest country, Japan. Australia accounts for less than 4% of China’s commerce.
Thus, members of the Inter-Parliamentary Alliance on China (IPAC), a group comprising more than 200 MPs from 19 different countries which aims to achieve “reform on how democratic countries approach China”, launched a campaign to encourage people to drink Australian wine in December. In a short video, parliamentarians from a host of countries including the US, UK, Germany, Japan, Italy, New Zealand and Norway said Beijing’s decision to impose devastating import tariffs on Australian winemakers amounted to “authoritarian bullying”. They’re all pledged to drin Australian wine to “stand against authoritarian bullying” in response to brutal trade tariffs slapped on the country by China amid an escalating diplomatic standoff.
But while China’s economic offensive against Australia is partly designed to warn countries against vocally opposing Beijing’s interests, particularly with Joe Biden looking to unite US allies, this Communist Party’s policy is already showing signs of backfiring. China’s moves are adding to worries about its use of economic coercion, and will likely push middle powers closer to the US camp. “Biden is planning to resume US international policy after a four-year hiccup,” said Jeff Moon, the US’s assistant trade representative for China for part of the Obama administration, adding that the scope of China’s actions against Australia was “breathtaking.” “The leverage is to work together,” he added. “That is what they most fear, and they see that coming.”
While it’s still unclear how exactly that would work, several key groupings including the Quad – the US, Australia, Japan and India – as well as Five Eyes – the US, UK, Australia, Canada and New Zealand – have been revived in recent years. New initiatives have also been floated, including one that would give countries an alternative to Huawei Technologies Co. for 5G networks and another that would find alternative supply chains to China. The Trump administration is reportedly formulating a joint retaliation plan that would allow the West to push back against the kind of economic coercion China is inflicting on Australia. And the European Union also plans to call on the US to seize a “once-in-a-generation” opportunity to forge a new global alliance that would counter China.
