Australian business leaders should consider using this challenging COVID era to deepen their relations with Chinese counterparts and understanding of China’s markets rather than to promote a greater priority for commercial interests in political debate.
Is this the hour when Australia’s business leaders should stand up and be counted on Australia’s relationship with the People’s Republic of China? Michael Clifton, the rightly well-regarded chief trade commissioner in China for six years, certainly thinks so.
Now president of the Australia China Business Council in NSW, and stepping down after seven months as chief executive of China Matters, a Sydney based organisation that “strives to advance sound China policy”, he has contributed helpfully to this debate with a policy brief published by the latter. His brief is well-timed. And it comes, by coincidence, soon after I had a couple of long personal conversations with important figures deeply immersed in this area, one based in China and another in Australia, who were asking this very question.
My response is very different from Clifton’s, however.
Mine is that this is a good time for Australians who do business in and with PRC counterparts to focus especially strongly on those relationships, to watch more attentively how markets are changing in both China and Australia, and to adjust their business plans correspondingly.
Clifton, who was senior advisor to Simon Crean when he was Regional Development Minister in the Julia Gillard government, urges our business leaders to highlight the importance to Australian wellbeing of the PRC, to establish a formal China business lobby, to arrange an annual business summit with Chinese counterparts, to press Beijing for a better trade and investment relationship, and to press Canberra for a China Advisory Council reporting to the Prime Minister.
Nothing is stopping any of this happening already. The crucial questions are: what would these business people say, and what would they wish these bodies to achieve?
Many in the business world and beyond, who urge a “re-set” of Australia’s relationship with the PRC, appear to believe that “engagement” is an end in itself, and that “understanding” will lead to a wish for closer formal ties — although it may instead lead to greater guardedness.
I have argued, and continue to argue for engagement with the PRC, inevitable with a country of its size and with our multiple levels of contact, including prominently economic links. I also support the idea that Australians need to understand the PRC better, for the same reasons.
But if Australian business leaders other than Twiggy Forrest and Kerry Stokes, who have prominently and frequently promoted their views, are to press for a change in Australian policy regarding the PRC, they need to articulate why and how they wish this to happen — and especially, in what new ways we should engage the PRC, while bearing in mind that the effectiveness of this engagement would be limited unless China reciprocates.
“Laying low is no longer an option for business leaders,” says Clifton. But the trading relationship is not exactly on the rocks; it remains very busy, despite COVID constraints. And laying low appears to be the preferred option for most Chinese counterparts of Australian business leaders. When did we hear PRC business people publicly call for changes in their own government’s policies, or urge their newly militarised diplomats to withdraw damaging threats and return to more truly diplomat language? Even if they might wish to do so, stepping out in such a way would place them in considerable peril.
Australian business people are routinely requested by PRC contacts to replicate traditional talking points, including that: to criticise the PRC is to be racist, the Chinese Communist Party cannot be separated out from China and the Chinese people whom it has ruled for 71 years; criticism of party-state policies or actions amounts to “abuse”; the rise of the PRC to global dominance, especially economically, is inexorable; and to criticise the PRC is tantamount to fawning on the US and endorsing President Donald Trump unquestioningly.
But this is a ritual required by box-ticking cadres. For the most part, genuine business people in the PRC not only choose to lay low themselves, but they like their international partners to do the same. At a time when the PRC is facing considerable global pushback as a result of its increased international assertiveness, and with Beijing also feeling under economic pressure as unemployment grows and capital slides, Chinese business people especially value closer links with trusted partners. This provides them with a welcome degree of predictability. Public assertiveness is not part of such appeal, it instead adds peril.
If it is timely for any particular part of the Australian population to play a greater public role in discussion about how to respond to the PRC’s advances, it is not so much business people — insofar as they might cooperate to comprise a lobby — as the many Chinese Australians, who of course also include business people too. Chinese Australians may not comprise a “community” because of the diversity of their origins and motivations for migration, but do mostly have some skin in this game and do have helpful understandings.
Clifton is right when he says that too few Australians have developed their formal Chinese business partnerships, which “demands patience, perseverance and opportunities for genuine dialogue that encourage more than a perfunctory recitation of well-worn talking points.”
One of the reasons for this is that extremely few senior Australian business people have experience of living and working in China, or in Asia generally, and most boards of Australian companies contain no directors with such experience. Meanwhile most Australian businesses have invested scarcely in China, if at all, excising that prime driver for true PRC understanding.
That’s a good reason to use this already fraught COVID era to deepen business understanding of clients, suppliers and markets, to become better informed generally. Such a period, when virus anxieties are being exacerbated by the frenetic but also relentless PRC political opportunism that has included the subduing of Hong Kong, and by the wolf-warrior aggression conducted on a truly global — absolutely not Australia-specific — front, is not a rewarding time to advocate vociferously, the tailoring of policy to prioritise business interests over security or more broadly, community values. A growing majority of the Australian population appears prepared to suffer economically rather than to submit silently to such opportunism, and it may not be in the best interests of businesses to associate themselves vociferously with a contrary view, that may be read as “support” for PRC interests extending well beyond commercial relations.
In the Lowy Institute’s well-respected poll this year, just 23 per cent of Australians said they trust China somewhat or a lot “to act responsibly in the world”, a 29-point fall since 2018. Confidence in Xi Jinping has almost halved, to 22 per cent, in those two years. The federal government should help “find other markets for Australia to reduce our economic dependence on China” according to 94 per cent of people surveyed, and 82 per cent would support the government “imposing travel and financial sanctions on Chinese officials associated with human rights abuses.”
Many Australians now feel sufficiently well-informed about the PRC’s governance to adopt views of their own, even if some China-experts wish for deeper understanding. These increasingly widespread views are to a significant degree reflected in positions taken in Canberra, these days largely in consensus by the Coalition and Labor.
But the language used by top Australian political leaders about the PRC remains overwhelmingly moderate and precise rather than, as Victorian Treasurer Tim Pallas described it in May, “vilification”. And despite the occasional rhetoric that Australian politicians should do or say something that will lead to the restoration of convivial visits to the Great Hall of the People, this “carrot” held out for Canberra if it were to become more PRC aligned, simply now lacks the attraction it once held. Prime Minister Scott Morrison has said he is “not waiting by the phone” for an invitation. And within Australia, blame is more broadly attached to the PRC side than to Trade Minister Simon Birmingham for his failing to find someone to answer his calls.
How valuable would it be for Australian business people to call publicly for a shift towards “supportive” PRC relations, if potential results were, for example, to arouse criticism by Australian consumers and shareholders and to provoke political antipathy, while only adding to Chinese business counterpart anxiety? Clifton rightly says “the change in behaviour of the PRC is a key factor in the waning of business influence.” This requires a review by business of how it operates in and with the PRC — in which the Australian chambers of commerce there can provide invaluable inputs — without expecting that the business community or even its Chinese partners have any chance of changing that PRC behaviour.
As Alan Kohler wrote a few months back in The Australian, “for Australian businesses that have China as their plan A, they should start thinking about plan B.” That doesn’t mean they dump plan A. But there does need to be a lot of thinking, studying, and quiet talking going on, including with Chinese business partners.