Tensions between Australia and China simmering throughout the pandemic have reached something of a flashpoint, with Beijing’s ambassador warning of a potential consumer boycott of Australia.
Cheng Jingye, China’s ambassador to Australia, told The Australian Financial Review that the Morrison government’s push for a global inquiry into COVID-19 would be met with resistance in Beijing.
He suggested Chinese consumers might respond by not pursuing tourism and higher education in Australia.
While some in national security and academic circles have sounded the alarm about Australia’s economic dependence on China, a serious boycott by consumers or the government would have pretty disastrous consequences for the Australian economy.
But just how likely is it to happen?
A relationship too big to fail
China accounts for a quarter of Australian exports, trade that is worth $153 billion. The economic hit of even a partial, consumer-led boycott could be devastating.
The higher education sector would be hit early and hard by a Chinese consumer boycott. Australian universities have been dependent on Chinese student money for some years now. According to a report compiled by University of Sydney associate professor Salvatore Babones, Chinese students’ course fees accounted for between 13% and 23% of several major universities’ total revenues.
The early days of the COVID-19 pandemic provide a bleak snapshot of what a crash might look like. Universities Australia chair Deborah Terry says the sector is set to lose 21,000 jobs over the next six months, with revenues cut by up to $4.6 billion, even with a government assistance package.
If Chinese students stop coming altogether, those numbers could become long-term trends.
Tourism could also be threatened by a consumer boycott. Australia welcomes 1.4 million Chinese tourists a year, who spend nearly $12 billion. And if Chinese people stopped buying Australian beef, as Cheng suggested, our agricultural sector would struggle as well — 25% of Australia’s agricultural exports, worth $11.8 billion, go to China. Last year, the country became the largest market for Australian beef, with demand rising 84%.
Could it even happen?
Economist Jane Golley, who is executive director of Australian National University’s Centre on China and the World, notes that while the ambassador suggested consumers might boycott Australian goods, this wasn’t a directive from Beijing.
It’s unclear whether such a boycott is in the interests of Chinese people or the government. In the higher education sector, for example, there is still evidence that Chinese students still want to come to Australia, something which is also in Beijing’s interests.
“Sending their students abroad to get the highest quality global education is a part of their mission to be a highly-education, high skilled, modern, advanced country,” Golley tells Crikey.
“Chinese people still want western education, and still want to come to sunny beautiful places.”
And despite China’s power, and the government’s displeasure with Australia’s criticism of its handling of the pandemic, our economies are still co-dependent. Even with the country’s moves towards green energy, China still needs Australian coal and iron ore. Australia continues to supply 40% of China’s liquefied natural gas.
And while the pandemic has furthered calls for Australia to “rethink” its relationship with China, the reality is that alternative markets just aren’t there yet — India’s growth rate is crawling, other Asian economies like Thailand and Malaysia are heading into recession.
All up, a fundamental shift in Australia’s economic relationship with China is unrealistic and potentially dangerous, something both Beijing and Canberra know.
Instead, it is perceptions of growing anti-Chinese sentiment reflected in government and media reporting, rather than an order from the CCP, that Golley fears could deter visitors.
“If you picked up an Australian newspaper on any day of the week, would you choose to come here?”
Not if it was a newspaper featuring the writing of Peter Hartcher. His anti-China diatribes are becoming increasingly unhinged and tiresome.
Great minds, and all that, lloydois – my spleen venting over Hartcher was in-process, as you were posting same. See immediately below.
What does Peter Hartcher stand for anyway.
Not sure of the answer, but only a clown would stand for him.
Hartcher is accurate and fair. China is a one party dictatortship which it, through one of its representatives on Q&A recently, falsely characterises itself as an efficient and inclusive democracy. It is nothing of the sort and Hartcher is correct. It is a gangster style country. Horrible. I for one will never visit. Try not to buy their shitty clothes. We sold out to them years ago. We owe them nothing. Like a bad parent or a bad teacher or a bad school/university or a bad job, we need each other to get where we need to go. That is all.
This is superior reporting to what’s being pumped out of outfit like the ABC and Nine Entertainment (particularly Yank empire loving, Canberra swamp dwellers, like that gawd awful Sinophobic s’head, Hartcher).
And, kudos for quoting Golley, on ‘Why would they….?’
Perhaps one day, probably when it’s all too late, the commentariat around these parts might bother looking at the geopolitical shifts, particularly the biggest one of all.
A hint was to be found in what happened in the roiling oil markets, last week.
West Texas Intermediate price/barrel went negative. A glut, and nowhere to store the glut coming from fracking in the US.
China had around a 1/3rd of their storage capacity free. So, they bought up. And, they were very particular who they bought from.
They bought less from Saudi Arabia, and they bought 30% more from the Russians. This is now a trend. Despite all the blather about OPEC+ refusing to cut production as far as Trump NEEDED (to try and save the corporate junk bonds used to finance the Yank fracking boom), because the Saudis wanted to bust the Yank frackers, it was always the Russians behind it, because they are the only ones who can survive a sub ~ $30/barrel price, for any length of time (no foreign debt, and huge reserves built up over years, and not in US$’s).
The Russians are after the US frackers, and the Saudis – and they’ll break both.
Russia is increasingly able to supply China by pipeline, meaning China’s energy supply lines aren’t dependent on sea routes remaining open.
The other energy commodity the Russians can supply China increasingly by pipeline is natural gas.
The Chinese will be subtle with their attacks on the Australian economy, and I reckon they’ll start with LNG.
Of course, that has the added benefit of hitting Yank and Brit capital, given they dominate the Qld LNG caper and, bar Woodside, are also heavily invested in the NW Shelf.
And, this ever increasing Russia – China relationship was planned, and is co-ordinated.
The seeds go back to 2007, and were sown at the Munich Security Conference when Vladimir Putin first pitched the ‘multipolar world’ (which nearly made John McCain, who was sitting in the front row, just a few metres from Putin, keel over).
It’s now 13 years later, and we still don’t seem to have noticed.
Some of us have noticed, just not the dinosaurs of the meeja & biz.
Never mind “belt & road” – more like “belt & braces”, never hurts to be safe.
Nice to see not all Orzies suffer from DUNKRUD -20 (Dunning Kruger Disease).
China wouldn’t want to threaten their coal and iron supplies I’d think. Sure, they could buy it elsewhere, but it’d be more expensive.
““Chinese people still want western education, and still want to come to sunny beautiful places.””
And if they want such an education in English speaking countries, post-covid-19 are they likely to choose UK, USA or Canada over Australia? If they want an education in a western European country, which would they choose?
If Australia can continue to manage the Covid-19 epidemic as successfully as it has so far then that fact alone could provide an attraction to Chinese students.
theamericanconservativedotcom/articles/u-s-colleges-drained-of-foreign-students-perhaps-forever/
“U.S. Colleges Drained Of Foreign Students, Perhaps Forever
Higher Education counts on a huge chunk of that tuition each year, prompting a mad scramble to keep it together.”
I’m not sure about the local arena, but I do know foreign students dominate enrolments in the STEM subjects and courses in the US – the range across the 4 STEM’s is from mid 50’s%, to mid 80’s%.
And, the Chinese kids dominate the foreign student numbers in those 4 STEM streams.
And, foreign students largely pay cash. So, if they dominate STEM enrolments, and they pay cash, what happens if they stop coming?
Government funding weighted to STEM’s, to replace that cash?
Or, will those subjects that continue to prove more ‘attractive’ to local students’ debt funding, like ‘marketing’, or ‘political theory’ (‘science?’ Pfft), neoliberal economics and ‘finance and accounting’ extend their local dominance.
BTW, over the last 4 years, China has been granted over 50% of all patents globally.
While we all go into a tailspin over the threats of the Chinese government on trade, we are missing one very important point and that is that Australia is a good customer for Chinese goods and services. Take a stroll down any aisle in Bunnings and take note of the products on the shelves and where they come from. China owes its current economic vitality to trade with the rest of the world, primarily the west. Fare enough to be diplomatic but to kowtow in fear of rejection overlooks the quality of the Australian experience. The quality of our wines and other primary products, the vast expanse of beautiful countryside and coastline, the climate, air quality, quality of our education and so much more. The Chinese communist party seems very happy to bully it’s position around the world and it’s high time for countries to stand firm against such short sighted self defeating behaviour.
China is a bully. The Chinese government needs to be called out for their abuses of human rights, subjugation of minorities on race and religious grounds, the constant hacking and stealing of IP, and systematic espionage. Yes, other countries do this too but not all other countries threaten and bully over the use of certain words, or names of countries, or pressure for transparency.
I’ve just been and grabbed part of a comment I left under Rundle’s piece.
“2 very recent opinion pieces, out of Amerika, one from the ‘moderate Right’, one from the moderate Left’;
theamericanconservativedotcom/articles/somebody-tell-the-establishment-that-american-hegemony-is-over/
“Please Tell The Establishment That U.S. Hegemony Is Over
Our dominance in the world is in the rear view, yet Trump and other pols refuse to get the message.”
To quote 1 paragraph, on their view of the ‘bully hierarchy’;
“Many defenders of U.S. hegemony insist that the “liberal international order” depends on it. That has never made much sense. For one, the continued maintenance of American hegemony frequently conflicts with the rules of international order. The hegemon reserves the right to interfere anywhere it wants, and tramples on the sovereignty and legal rights of other states as it sees fit. In practice, the U.S. has frequently acted as more of a rogue in its efforts to “enforce” order than many of the states it likes to condemn. The most vocal defenders of U.S. hegemony are unsurprisingly some of the biggest opponents of international law—at least when it gets in their way.”
salondotcom/2020/04/26/trump-and-the-coronavirus-have-exposed-america-as-a-declining-empire-lets-face-that-honestly/
“Trump and the coronavirus have exposed America as a declining empire: Time to face the facts
Trump’s tragic clowning — and his global surrender to China and Russia — have made certain hard truths unavoidable”
(Have “exposed”, not “caused”).”
Now, 1 paragraph from the ‘moderate Left’;
“But the constant level of U.S. military intervention or interference in numerous countries since then — none of it rising to the level of official, acknowledged conflict — is completely invisible to American voters, and therefore not controversial.”
We don’t seem to have got the memo, either. As is generally the way, the meekest of the vassals are the last to cotton on, and just keep banging the same old drum.