Australia’s economic dependency on China 'will not change', says former ambassador to Beijing

Daniel Hurst
·6-min read
<span>Photograph: Roman Pilipey/EPA</span>
Photograph: Roman Pilipey/EPA

Australia is likely to keep suffering economic harm from “repeated rounds of Chinese economic coercion” and needs to find a way to reset the relationship, a former ambassador to Beijing has warned.

Seafood exporters are the latest industry group to report disruptions in accessing the Chinese market and Geoff Raby, the Australian ambassador to China from 2007 to 2011, said Australia needed China more than the other way around.

Raby, in an interview with Guardian Australia, argued that Australia had joined itself at the hip with the United States over the past few years in seeking to resist China’s rise – an approach he believed went against Australia’s interests.

That is despite the Morrison government’s assertions – including at high-level talks in Washington in July – that Canberra is pursuing its own policy and is not doing anything to injure the important relationship with Beijing.

In a new book published on Tuesday, Raby suggests Australia’s strategy for managing the rise of China has been “incremental, reactive to others’ agendas, and as such, incoherent”.

Related: How much is China's trade war really costing Australia?

He also says talk about Australia significantly diversifying its economic relationship with China by turning to other markets is “nothing other than wishful thinking”.

The complementarities between the two economies “are so profound that Australia’s economic dependency on China will not change” unless Australians choose to accept a major cut in their living standards, according to the book, China’s Grand Strategy and Australia’s Future in the New Global Order.

“Canberra hates this, but I start with the premise that it’s an asymmetrical relationship [and] whether we like it or not, we need China more than they need us,” Raby, who is also a former Australian ambassador to the World Trade Organization, said in the interview.

“It’s not a question of who’s right or wrong. Diplomacy and pragmatic foreign policy should be about getting outcomes and results that are in your interests.”

The Australian government has said it will not bow to economic pressure and is seeking to stand up for its values.

Raby questioned whether Australia’s interests were best served by the current situation “where we have exposed ourselves to repeated rounds of Chinese economic coercion”. He said while Australia should reject China’s economic coercion “that doesn’t mean they’re not going to keep doing it to us and we’re not going to keep paying the price”.

On Monday, the Morrison government called on Beijing to provide certainty to Australian rock lobster exporters, after several shipments were held up by customs authorities for further testing over the weekend.

The Seafood Trade Advisory Group, which represents seafood exporters on trade and market access issues, said there were positive signs on Monday “with the Chinese authorities undertaking additional testing over the weekend and confirmation that delayed consignments are starting to clear customs”.

The delays had fuelled fears that seafood could be the next Australian sector affected by trade tensions with China after barley, beef, cotton, coal and wine were all targeted by official or undeclared trade actions.

While it is difficult to quantify the cost of the trade war, Perth USAsia Centre research shared with Guardian Australia last week showed the total annual value of exports to China in the five industries affected by declared and undeclared sanctions was $19bn.

An additional $28bn worth of services exports could be at risk if Beijing’s warnings to its citizens against travel to Australia – based on claims of an elevated risk of racist attacks – prevents a post-Covid recovery in tourism and international education.

Raby likened the Australian government’s approach to the Black Knight, the hapless character from Monty Python and the Holy Grail.

“The Black Knight’s got his arms and legs chopped off and he yells ‘Come back you chicken’. We’re a bit like that. And I’m just calling for pragmatic, realist policy.” Australia needed to think about how it could offer a circuit breaker without selling out its interests, Raby said.

“It needs to be about changing the conversation with China,” he said. “Things that matter most to Beijing, I’d argue from a country like Australia, is recognising China’s territorial integrity, the legitimacy of the Communist party as the governing party of China and China’s ascendancy as a major power in the region and one that needs to be respected for that.”

In the book, Raby contends that recognition of China’s interests and its party-state are required for Australia to seek opportunities to engage with Beijing on issues such as the environment, water resources, energy, terrorism, transnational crime, cyberwarfare and the militarisation of space.

He lays out several other foundations for “a grand strategy” for Australia, including no longer taking for granted America’s preparedness to defend Australia.

Canberra’s strategy should also include increased investment in Australia’s cultural diplomacy and soft power in the region, and a return to “activist middle-power diplomacy involving coalition building across a range of issues”.

Raby, an ambassador to Apec in the early 2000s, says regional states should seek common purpose when dealing with China “to remind Beijing that a push against one is a push against all”.

After serving as Canberra’s top diplomat in Beijing for four years until 2011, Raby has more recently provided advisory services to Australian and Chinese businesses. He is registered on the Australian government’s foreign influence transparency scheme as a board member of Yancoal, a resources company that is listed on the Australian stock exchange but majority-owned by a Chinese state-owned enterprise.

In the book, Raby criticises the Chinese government over “widespread internment camps” across the Xinjiang region and notes Xi Jinping’s “increasingly authoritarian control of domestic politics”.

Related: MPs' 'loose talk' drives Australia's relationship with China to very low point, former defence chief warns

“Having as our major economic partner a wilful, difficult, abrasive but nonetheless brittle and still weak power, one that is more comfortable with tyranny than democracy, but on which Australia’s economic wellbeing and security in the region rest, is the dystopian future that Australian policymakers will need to learn to navigate,” he writes.

Raby summarises the Chinese government’s strategic objectives as security for its borders, respect for its territorial integrity, and protecting the continued rule of the Communist party. He argues China is “a constrained superpower” that acts as “both a status quo power and a disruptor” and has a range of strategic vulnerabilities.

The vulnerabilities include China’s heavy dependence on other countries for the resources and energy it needs to fuel its economic growth, leaving it exposed to future disruptions in supply.