Cleo Paskal outlines
the West’s fears as a
key ally develops closer
links with China
Something is going on Down Under. In
the past few months, a constant stream of
serious Washington players have passed
through Australia, including Vice-President Mike Pence, Defense Secretary James
Mattis, Secretary of State Rex Tillerson,
Senator John McCain, former CIA Director David Petraeus and former US Director of National Intelligence James Clapper.
This many high-level visits in such a short
period of time is highly unusual. The reason
was summed up by the oft-repeated message: watch out for China and don’t forget
who your real friends are.
McCain, chairman of the Senate Armed
Services Committee, said: ‘The challenge
is that as China has grown wealthier and
stronger, it seems to be acting more and
more like a bully ... the real question is
whether Australia and America are better
off dealing with China’s strategic and economic challenges together, or by ourselves.’
Petraeus said the US understood the
Australian position was complex because
its main trading partner, China, was also
its main security concern. However, Australia should still participate in ‘hugely
important’ freedom of navigation exercises
in the region.
Clapper, who took up a post with the
Australian National University’s National
Security College, raised questions about
Chinese money in Australian politics.
This overlapped with growing Australian concerns about Chinese influence.
The Australian Broadcasting Corporation
and Fairfax Media published an in-depth
investigation into Chinese state-linked
interference in Australia. Using data from
the Australian Security Intelligence Organization, or ASIO, they highlighted cases of
‘naked in uence-buying’.
ASIO’s director-general told the Aus-
tralian parliament that the scale of foreign
interference in Australia was ‘unprecedented’ and had ‘the potential to cause
serious harm to the nation’s sovereignty,
the integrity of our political system, our
national security capabilities, our economy
and other interests’. Australia’s Attorney
General travelled to Washington where
he received intelligence briefings on the
degree of Chinese state-linked interference
in Australia’s political, business and academic sectors before returning to Australia
and announcing he would propose major
changes to the laws on foreign influence
buying.
Members of the defence and intelligence
communities do not like making public statements. They must have felt the situ-
ation was so dire they needed to go public.
It seems as if there is a civil war at the heart
of the Australian policy community and it
all boils down to one core question: strategically, what is Australia?
For at least a decade there has been growing concern in the strategic community
inside Australia, and among its allies, that
Australia’s economic ties to China could
affect it national security and strategic
positioning. However, with some exceptions, the Australian political, business and
academic communities continue to deepen
engagement, seemingly fuelled by the
assumption that the West is in decline and
China’s economy will grow indefinitely.
‘Others in
Australia don’t
have a problem
with the country
trying to play a
balancing role
between Beijing
and Washington’
An event that captured this tension involved the commercially and strategically important northern Australian city of Darwin. There had been substantial political resistance in Australia to a request to allow US Marines to train and be
stationed in Darwin. Eventually, in 2011,
Canberra agreed to let 2,500 American
Marines rotate through. However, four
years later, the Northern Territory government suddenly announced that the lease
to the critically important port of Darwin
itself was going to a Chinese military-linked
company, Landbridge, for 99 years. US
officials were reportedly ‘stunned’.
It didn’t help matters that the former
Australian trade minister, Andrew Robb, a
key player in the Australia-China free trade
agreement, soon joined Landbridge as a
consultant, on a reported salary of £43,000
a month, plus expenses.
While many in the Australian intelligence and defence communities are
deeply concerned by such things, others
in Australia don’t have a problem with the
country trying to play a ‘balancing’ role
between Beijing and Washington. One of the best-known books on the topic is The
China Choice: Why we should share power,
by Hugh White, a former Australian defence official.
In it, he calls for a ‘concert of Asia’ in
which China and the US work together
in the region. How countries such as
Vietnam, Japan, Taiwan and others would
feel about this ‘sharing’ isn’t greatly
explained. This wasn’t a marginal book.
It was launched by the former Australian
prime minister Paul Keating who said: ‘I
have long held the view that the future of
Asian stability cannot be cast by a non-
Asian power – especially by the application of US military force.’ By using the term
Asia instead of Pacific, Keating implies the
US is external to the region.
Which points to another increasingly
discussed aspect of the ‘what is Australia’
question. Is Australia a western outpost in
Asia, or an Asian country that has a lot of
people with genetic roots from Europe?
Strategically and structurally, the answer
is clear. Australia is part of the core western
Five Eyes intelligence sharing partnership,
along with the US, the UK, New Zealand
and Canada. The five countries collaborate
closely on intelligence issues, which is why
an Australian ‘drift’ is of such concern to
Washington and London.
Under Five Eyes, different countries
effectively lead in different geographic
areas. Australia, and to a degree New Zealand, are considered the strategic leaders
within Five Eyes for much of the vast area
of Oceania.
Oceania, consisting of more than a dozen
Pacific island countries, covers close to a
sixth of the planet’s surface, and is the
front line between Asia and the Americas.
Many Pacific island countries don’t have a
US embassy, but they have an Australian
and a New Zealand one, and Canberra and
Wellington are heavily consulted during US
diplomatic and military visits to the region.
In this context, it is worth noting that
many of the concerns about Chinese
influence in Australian politics are replicated in New Zealand, as was made clear
in Anne-Marie Brady’s study Magic Weapons: China’s Political Influence Activities
Under Xi Jinping. One recent example
revealed that Jian Yang, a sitting New Zealand MP and former member of the select
committee for foreign affairs, defence and
trade, used to teach in China at an elite Chinese intelligence-training institution.
When asked about it, he replied: ‘If you
define those cadets or students as spies, yes,
then I was teaching spies. I don’t think so.
I just think they are collecting information
through communication in China.’ New
Zealand is also overtly collaborating with
China on development projects in Oceania.
The delegation of strategic ‘management’ of Oceania to Canberra and Wellington by Washington may make sense
to the defence and intelligence communities if one assumes that Australian and
New Zealand interests in the region dove-tail with American ones. But that is open to
question, even by Australians themselves.
As Mathew Davies, the head of the international relations department at the Australian National University put it: ‘What is
Australia’s role in the Asia Pacific? Should
we continue to see ourselves as a close ally
of the US or should we look at what Australia wants?’
As a result, the concerns about Chinese
in uence over domestic a airs in Australia
and New Zealand are seeping into the way
Washington and others are looking at the
advice they are getting from Canberra and
Wellington on Oceania. There have been
several cases in which it seems Australia
and New Zealand were doing what they
want, even if it might not help regional stability or greater western interests.
For example, it has been reported that
Australia pressured Nauru to transfer recognition from Taiwan to China. Also, the
advice out of Canberra and Wellington on
how to deal with Fiji after its coup was sup-
posed to force Fiji into democratic concessions. Instead, Fiji turned to China, with
which it has since developed close ties.
Which is not to say the outcomes favourable to China are desired. Often Australia
and New Zealand’s action in Oceania seems
to be driven by domestic economic factors.
But, even then, given how entrenched
China is becoming, what looks like trade
actually has larger strategic implications.
The current example is the Pacific Agreement on Closer Economic Relations Plus,
or PACER Plus, a trade deal involving Australia, New Zealand and the Pacific island
countries.
Canberra and Wellington have
been pushing for PACER Plus for more
than a decade. It is designed to have the
island countries drop tariffs on most goods
coming from Australia and New Zealand,
have them rewrite their regulations, get rid
of policies that protect domestic innovation, make it easier to pressure the islands into privatizing state-owned enterprises, and undermine the islands’ ability to sign bilateral trade deals with countries outside the zone. A particular concern of Australia and New Zealand was a potential UK or European Union trade deal with the islands.
‘Concern is spreading as more realize how weakness in one part of the West’s
interlinked system can cascade exponentially’
As most of the Pacific island countries
enjoy duty-free and quota-free access for
exports to Australia and New Zealand, and
many national budgets rely on import tariffs that will disappear with PACER Plus, it
is hard to see the advantage for the islands.
However, Australia and New Zealand
had large dedicated teams, including
members from their own business sectors,
negotiating PACER Plus, while most of
the island countries have few trade negotiators. As a result Canberra and Welling-
ton funded an organization to negotiate on
behalf of the island countries, with a team
led by an Australian-educated Ghanaian
with little knowledge of the complexities
of the island economies. This combined
with intense lobbying from Australia and
New Zealand that was described as ‘bullying and cheque-book diplomacy’ and
resulted in recalcitrant civil servants in at
least one island country being red.
In June, Australia, the Cook Islands,
Nauru, Kiribati, New Zealand, Niue,
Samoa, Solomon Islands, Tonga and
Tuvalu signed PACER Plus. The deal,
which Australia and New Zealand were
touting as promoting regional economic
integration, is already creating fractures
in the region.
One of the largest island economies,
Papua New Guinea, failed to sign saying
the deal was completely in Australia and
New Zealand’s favour. Neither did Fiji,
because of the ‘very restrictive’ third party
most-favoured-nation clause. The King of
Tonga dissolved his parliament and called
a new election in part because of the lack
of consultation on PACER Plus.
It seems as if Washington wasn’t thrilled with the
deal either. The three island countries in
Free Association with the US, the Federated States of Micronesia, Palau and the
Marshall Islands, somehow managed to
miss the signing because of ‘transportation
issues’. The possibility of them joining later,
as Vanuatu has, has not been mentioned.
On the face of it, PACER Plus is also
problematic for regional security on strictly
economic grounds. It is likely to increase
food insecurity as pressure is put on island
countries to privatize customary land currently being used as family allotments. It
is likely to bring cheaper, lower quality
food into the islands, increasing obesity
and diabetes, already a serious issue in the
region, and making domestic food production less pro table. It will also deprive
already struggling governments of critical tariff income − forcing them to look for
more Chinese loans. All this can combine to
create internal dislocation and increasing
urbanization and poverty and all for very
minimal benefit to a very narrow range of
Australian and New Zealand businesses.
The projections get even more serious
when one overlays the ‘China factor’. For
example, one of the priorities for Australia
and New Zealand is the privatization of
state-owned enterprises in the islands. This
means ports, airports, telecoms and other
pieces of critical infrastructure.
Chinese-linked companies have been trying to gain access to these for years given
the critical strategic positioning of the
island countries. It is not a great leap to
think it possible that Australian or New
Zealand companies, backed by Chinese
government-linked money, will wait for
Canberra and Wellington to force the privatization of, say, ports in the island countries, and then come in with the best bids,
as they did in Darwin.
Many in the Australian defence and
intelligence communities are worried about
the way things are going. And that concern
is spreading, as more realize how weakness
in one part of the West’s interlinked systems can cascade exponentially. It’s not just
Washington that wants to know the answer
to the question ‘what is Australia?’.
Cleo Paskal is an associate fellow of the
Energy, Environment and Resources
Department at Chatham House, and a
Trudeau Visiting Fellow and Director of
The Oceania Project at the Centre d’études
et de recherches internationales de
l’Université de Montréal
| the world today | october & november 2017
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