Sailing China’s Red Seas

Can Pacific allies like Australia rely on the United States?

Red flags flying in Tiananmen Square
Photo by Zachary Keimig on Unsplash

Australia cannot walk and chew gum with China and the US

More recently, Australia’s relations with China have deteriorated significantly. Australia has called for an investigation into the cause of the Covid-19 virus in Wuhan and challenged China’s legal claim to most of the South China Sea. Both were seen by China as intolerable provocations, prompting one particularly erudite representative of China’s foreign ministry to describe Australia as “chewing gum stuck on the soles of our shoes.” Australia’s tacit support for the Hong Kong protesters, its condemnation of Chinese cyber attacks, and its insistence on raising the issue of human rights abuses against the Uighurs have led to Australia being frozen out of the Chinese orbit.

The US is lacking a consistent game plan in the Pacific

Now Australia is finding it much harder to walk the tightrope of maintaining strong bilateral relations with both major powers. Australia has far more in common with the United States than China. However, even if Australia wanted to decouple economically and disengage politically from China, it would need to rely on its greatest ally — the United States — to do the same. This is where things become murky.

Australia should not compromise its values

Australia should make its own way as it has always done, but it should not compromise on its values. Australia’s dependence on China is a two-way street. China is dependent on Australia for iron ore and other commodities. If China decided to punish Australia and go to Brazil to buy iron ore, others who buy from Brazil would come to Australia. Perhaps the biggest problem is the extent to which Australian consumers rely on China.

Writer and analyst based in Melbourne, Australia. Investing, markets, politics, history of economic thought. More at: https://www.gordontoy.com/

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