In Asia, all eyes are on Chinese President Xi Jinping as he wraps up his state visit to Moscow Wednesday. Beijing is walking the high wire in maintaining its relationship with Russia while also attempting to charm partners in the Asia Pacific region, who view such an alliance with suspicion.
There’s also the peculiar indication that a Chinese ban on the import of seven kinds of Australian goods is over … without the Chinese admitting it ever began.
China is set for the “full recovery” of imports of Australian coal, welcoming its first shipments in 2-½ years, while imports of other goods such as timber have also resumed. That’s what “insiders” tell the state-run English-language daily Global Times, often used to communicate China’s foreign-policy position.
China, Australia’s largest trading partner, has been blocking imports of barley, coal, copper ore, lobster, sugar, timber and wine since November 2020, as I explained then, although it’s not been an official ban. Such a “gray-zone” strategy is used to scare Aussie exporters, who suddenly find their shipments experiencing trouble clearing customs. Tons of live Aussie lobsters, for instance, were left rotting on the tarmac of the Shanghai runway.
So the announcement that shipments have resumed is tough to explain. Officially, they never stopped, although in practice they did. Coal shipments halted because importers “chose to diversify their suppliers,” the Global Times insists, “to cope with disruptions posed by soured relations between the two nations.” We are also told by the government-owned newspaper that “price factors” played a part … in a move that in reality was ordered by Beijing.
Goods like timber were suspended because of sudden “quality hazards,” the Global Times has “learned.” And suddenly those hazards are also solved, it seems.
Lobster and wine shipments are also back in action. The Chinese Ministry of Commerce stepped forward last week to deny that there ever were “trade curbs” against Australian goods. Spokesperson Shu Jueting blamed “technical issues” that Beijing and Canberra should discuss.
The trade ban has been functioning in much the same way that visa bans work when Chinese gamblers are banned from entering Macau. Periodically, the Chinese government will crack down on how frequently people can visit the gambling mecca, the only place casinos are legal in China, but the policies are rarely announced, leaving travel companies to do the digging behind the scenes as to what is or is not permissible.
In getting rid of a trade ban that officially never existed, China looks to be attempting to avoid trade penalties. Australia has sued China twice before the World Trade Organization, first for slapping duties on imports of barley and then for hiking tariffs sky-high on Aussie wine, as I outlined at the time. The WTO has set up dispute-settlement bodies in both cases that have been hearing statements and receiving submissions through late 2022.
Shu at the Chinese commerce ministry insists that China “manages foreign trade in accordance with WTO rules” so it is “inappropriate to misinterpret the relevant management methods as restrictive measures.” However, the Global Times trotted out an Australian-studies expert at a Chinese university who says the trade recovery “shows buyers’ restored confidence in Australian goods amid an improvement in bilateral relations.”
So “quality hazards” seem to have more to do with the quality of government relations than anything to do with the quality of the goods themselves. Quite why a timber or coal merchant is worried about how well the Aussie defense minister is getting on with someone in Beijing is anyone’s guess.
Relations between the two nations declined sharply amid allegations of Chinese interference in Australian elections. Trust in China is at an all-time low among Australians, according to the 2022 edition of the Lowy Institute Poll, with 75% of Australians saying that China is likely to become a military threat to Australia over the course of the next 20 years.
China’s beef with Australia began under the previous Aussie administration of conservative prime minister Scott Morrison. Australia had the temerity to demand an official independent investigation into the origins of Covid-19. Canberra also followed Washington’s lead in banning Chinese telecom Huawei from participating in the local 5G network.
Relations have improved under the watch of current Aussie PM, the left-leaning Anthony Albanese, elected last May. Trade talks began this February, the first meeting of the trade ministers from the two nations since 2019. Defense officials from China have been meeting with Australian counterparts in Canberra Wednesday, also their first formal meetings since 2019.
Albanese, who met Xi in person in November at the G20 summit in Bali, said earlier this month that he would visit China this year if invited. The last Australian leader to visit China was Malcolm Turnbull way back in 2016, and even then the Aussie PM traveled to Hangzhou only because the city was chairing a G20 Summit.
Australian Foreign Minister Penny Wong has paved the way for Albanese, visiting Beijing in December to honor the 50th anniversary of diplomatic ties between the two countries.
The Lowy Institute poll also shows that Australians are worried about China’s deepening relationship with Russia. After Putin traveled to Beijing in February 2022 for the opening of the Winter Olympics, 56% of Aussies say they are “very concerned” about the relationship between China and Russia, with Xi and Putin declaring a “no-limits friendship” at that time.
In all, 63% of Australians say that China is “more of a security threat” to Australia, while only 33% say China is “more of an economic partner.” As recently as 2018, before the trade and Covid spats, half (52%) of Australians said they trusted China “somewhat” or “a great deal,” a figure that has plummeted to just 12% now.
Xi arrived in Moscow on Monday “at the invitation of President Vladimir Putin,” and will be there through Wednesday. China is a key ally to Russia after the West has blocked the import of most goods and leveled sanctions. China has steadfastly refused to call the “Ukraine crisis” an invasion or a war, and is instead attempting to position itself as a peacemaker. Given China’s warm relationship with Moscow, those efforts “lack credibility,” according to both NATO and the European Union.
It’s clear Russia has far more to gain than China out of this visit. Notably, Putin says that “practically all the parameters of that agreement have been finalized” for a new gas pipeline to connect Siberia with northwestern China. But China has stayed silent on the deal. It would be the second such pipeline, and Mongolia has already signed off on the Power of Siberia 2 project, which would also have to cross its land.
Xi invited Putin, now with a war-crimes arrest warrant against his name from the International Criminal Court, to come to Beijing “at a convenient time” later this year. Their joint statement praises China’s “objective, unbiased position” on the invasion that’s not an invasion.
Can you be a peacemaker for a war that you do not call a war? Perhaps it is much like lifting a trade ban that never existed. Expect more charm initiatives now that Xi is traveling beyond China’s borders, having restricted international travel for the better part of three years.