Beijing’s Diplomatic Thaw Doesn’t Bring Relief From Economic Coercion: Australian PM

Australia’s Prime Minister Anthony Albanese meets China’s President Xi Jinping in a bilateral meeting during the 2022 G20 summit in Nusa Dua, Bali, Indonesia, Australia, on Nov. 15, 2022. AAP Image/Mick Tsikas

Australian Prime Minister Anthony Albanese has warned the country’s exporters that it may take a long time before China removes its $20 billion (US$13.5 billion) trade sanctions on Australia.

The warning comes after the Albanese met with Chinese leader Xi Jinping on Nov. 15 on the sidelines of the G20 summit in Bali.

Speaking at a press conference after the meeting, the Australian prime minister said that any expectations that Australians would see an immediate removal of the sanctions were not realistic.

“It was not anticipated that a meeting such as that, that you get immediate declarations. I believe if people thought that would happen, then that was not realistic,” the prime minister said.

However, he said that the meeting was constructive and it had given him the opportunity to honestly and openly discuss Australia’s differences with the Chinese Communist Party’s (CCP) leader.

“We have big differences to manage,” he said. “But we’re always going to be better off when we have dialogue and are able to talk constructively and respectfully, but also honestly, about what those differences are. ”

Australia's Foreign Minister Penny Wong (L) speaks with China's Foreign Minister Wang Yi (R) during their bilateral meeting on the sidelines of G20 Foreign Ministers Meeting in Nusa Dua on Indonesia's resort island of Bali on July 8, 2022. Johannes P. Christo/POOL/AFP via Getty Images

Albanese noted that Xi said Australia and China have “highly complementary economies,” but that the Chinese leader made no indication he would consider lifting the current trade sanction on Australian products.

“The system doesn’t work that way,” Albanese said. “Australia’s position is very clear. I put the position, clearly, firmly, but politely. And that is what I intended to do. And that’s what I did.”

Albanese has consistently said in the Australian media that he would not compromise on the country’s national interests.

“It’s not Australia that’s changed; China has,” Albanese told reporters in May. “It is China that has placed sanctions on Australia. There is no justification for doing that, and that’s why they should be removed.”

He also said Beijing needed to withdraw its list of 14 demands.

“I, whenever asked—must have been hundreds of times now—have said that the demands, which were placed by China, are entirely inappropriate. We reject all of them. We will determine our own values. We will determine Australia’s future direction,” Albanese said

Additionally, the Australian prime minister noted that he had specifically raised Australia’s position on the human rights abuses occurring in China, including Xinjiang. He also said that he had put forward the cases of Australian journalist Cheng Lei and Dr. Yang Hengjun, who have been accused of endangering national security and espionage, respectively.

Trade Sanctions Backfired on the Chinese Economy

The CCP’s decision to instigate a campaign of economic coercion against Australia has been regarded as a misstep by the international community with the U.S. Secretary of State Anthony Blinken remarking in February that China has lost more than Australia in the power play.

“I think China has lost more than Australia has in its efforts to squeeze Australia economically,” Blinken told The Sydney Morning Herald and The Age in an interview.

Blinken also noted he thought Beijing would think “twice about this in the future.”

Australia has also demonstrated that it can easily diversify its foreign trade away from the Chinese market. The former centre-right coalition government led by former Prime Minister Scott Morrison had remarkable success negotiating new free trade deals with other major markets like the UK, the European Union, and India that are set to come into force in the next few weeks.

Jeffrey Wilson, the research director of the Perth USAsia Centre, in an article for Foreign Policy in 2021 said that while Beijing intended on punishing Australia it did not work.

“It did not have the intended effect of getting Australia to back down. Instead, the government responded defiantly, with Australian Foreign Minister Marise Payne publicly accusing China of economic coercion,” he said.

“But in fact, the effects have been surprisingly mild. The reason is trade diversion: When a trade barrier is erected, businesses seek alternate outlets for their products. In open international markets, the outcome is rarely the destruction of export industries. Most of the time, trade flows adjust around the barrier.”