Canberra's three key decisions, the expectations game, and economic coercion (again)

Fortnight of 17 to 30 October 2022

Confucius Institutes, Darwin Port, and targeted sanctions

The United Kingdom’s Minister of State (Minister for Security), Tom Tugendhat, in the UK Parliament recalling:

“The Prime Minister’s pledge during the leadership race only a few months ago that Confucius Institutes pose a threat to civil liberties in many universities in the United Kingdom and he will be looking to close them.”

Quick take:

These comments bring into stark relief a dramatic decision point facing the Australian government. Since the introduction of Australia’s Foreign Relations Act 2020 (FRA), the Minister for Foreign Affairs has had the power to render “invalid and unenforceable” agreements establishing Confucius Institutes at Australian universities. The fact that the UK government looks set to close Confucius Institutes at its universities doesn’t mean Australia will follow suit. But as with the Autonomous Sanctions Amendment (Magnitsky-style and Other Thematic Sanctions) Bill 2021, there’s likely to be more political pressure on the Albanese government to use the powers at its disposal to punish human rights abusers in China and reduce the role of the Chinese state in Australian universities. In addition to the ever-present possibility of a rejection of a large investment from China by the Treasurer or the Foreign Investment Review Board, there are by my count three key looming decisions that could dramatically further strain the Australia-China relationship:

1. The use of FRA powers to veto agreements establishing Confucius Institutes at Australian universities.

2. An adverse finding in the new review of the 99-year lease by the Chinese company Landbridge of Darwin Port.

3. The imposition of targeted sanctions against Chinese officials in response to human rights abuses in Xinjiang.

It’s still unclear how each of these matters will play out. But it nevertheless seems highly likely that at least one of these issues—and possibly all three—won’t go China’s way. First, the domestic party politics of these issues make it likely there’ll be one or more outcomes to which China will object strongly. Regardless of the rights and wrongs and moral ambiguities of these issues, all three provide the Opposition with political leverage. If Canberra doesn’t veto Confucius Institutes/end the Darwin Port lease/sanction Chinese officials, then the Opposition will have an easy option for implying that the Albanese government is “soft on foreign interference”/“weak on national security”/“unprincipled on human rights.”

Of course, the previous Morrison government could have, but didn’t, avail itself of the FRA and Magnitsky powers to veto Confucius Institutes and sanction Chinese officials. Moreover, they could have initiated their own additional Darwin Port review after the Department of Defence review found in December 2021 that there weren’t adequate national security grounds for ending Landbridge’s 99-year lease. Perhaps these factors partially explain why Coalition figures in the Opposition have to date been relatively cautious on, for example, sanctions against Chinese officials over human rights abuses. Still, and this brings us to the second reason I’m expecting decisions that China won’t like: Australian public opinion seems to be broadly in favour of such moves.

Lowy Institute polling paints a clear picture of overwhelming popular support for sanctioning “Chinese officials associated with human rights abuses,” while Australia-China Relations Institute (ACRI) polling returned similar results, with nearly 80% of Australians in favour of such financial and travel restrictions. ACRI polling also indicates that nearly 60% of Australians are supportive of Landbridge being forced to “sell the port back to the government,” with just shy of 30% remaining neutral on the issue. Only roughly 13% of Australians oppose ending the lease. I haven’t seen polling data on Australian attitudes to Confucius Institutes at Australian universities. (Please flag such polling if it’s something I’ve missed.) But given the nature of media coverage of the activities of Confucius Institutes in Australia, it’s hard to imagine that a large constituency of Australians would strongly oppose the Minister for Foreign Affairs vetoing their operations.

Third, the diplomacy of all three issues points, to varying degrees, in the direction of decisions that will displease China. When many of Australia’s closest Allies and partners imposed targeted sanctions over human rights abuses in Xinjiang in March 2021, Australia had a ready reason for not doing the same. It didn’t have the appropriate legal mechanisms in place and was left, somewhat limply, welcoming these measures. With Magnitsky powers in place, such a reason for not imposing targeted sanctions is no longer available. So, if there’s now a coordinated push to introduce more targeted sanctions in response to the Chinese government’s human rights abuses in Xinjiang, it’d be conspicuous, and perhaps even diplomatically untenable among likemindeds, for Australia to not do the same. In fact, even if other liberal democracies don’t impose a fresh round of sanctions, it might still appear unseemly for Australia to have the ability to impose targeted sanctions and to not play catchup with the measures its Allies and partners already have in place. Especially considering the large body of research detailing the severe and systematic nature of human rights abuses in Xinjiang.

The international diplomatic factor is probably less significant regarding Confucius Institutes and Darwin Port. But even in those cases, overseas dynamics may push Canberra towards decisions that will upset Beijing. Assuming the United Kingdom follows through with its plans to close Confucius Institutes at its universities, more questions are likely to be asked about what the Albanese government is doing on the issue. And these questions may become increasingly pointed if other liberal democracies take similar decisions.

Meanwhile, there’s every chance that the Darwin Port lease will be subjected to more scrutiny and scepticism in Canberra and Washington given the growing operational and training importance of Northern Australia for US defence forces. Although US B-52 bombers might be refuelling and receiving repair more than 300km by road from Darwin Port, a 99-year lease for a Chinese company at a port that serves a territory hosting expanding US military force posture is likely to raise at least some influential eyebrows. Of course, this is not to say that this and the other reasons above are necessarily persuasive or the complete picture of factors at play. But it’s nevertheless easy to see how these considerations might push the Albanese government in the direction of decisions that China won’t at all like.

None of these factors mean Canberra is on the cusp of vetoing Confucius Institutes, scuttling the Darwin Port lease, and imposing targeted sanctions on Chinese officials over human rights abuses in Xinjiang. It (almost) goes without saying that the Australian government won’t take any of these decisions in the next two weeks. Any one of these actions could torpedo the chance of an Anthony Albanese-Xi Jinping meeting on the sidelines of the G20 in Indonesia on 15-16 November. Such a meeting looks increasingly likely in the absence of a dramatic deterioration in bilateral relations, so it would seem diplomatically prudent for Canberra to save these decisions for later this year or early 2023. Canberra won’t compromise on any points of policy substance to please Beijing. Yet as Albanese government ministers have been at pains to stress, they want to give diplomacy a chance and talk to their Chinese government counterparts. But such talk notwithstanding, it’s easy to see how the bilateral relationship could face even more turbulent times ahead.

A United States Air Force B-52 Stratofortress Bomber takes off from RAAF Base Darwin during Exercise Diamond Storm in 2019 [Defence Images/images.defence.gov.au]

Moderating great expectations

China’s Consul-General in Brisbane, Dr Ruan Zongze, writing in The Courier Mail on 27 October:

“Improving China-Australia relations and enhancing mutually beneficial co-operation must be the common aspiration of both peoples.”

Quick take:

Despite the above thorny decision points facing the Albanese government, Chinese diplomats in Australia continue offering generally sunny side up visions of the future of bilateral ties. For their own sake and the broader bilateral relationship, I hope they’re carefully managing Beijing’s expectations. Although the Albanese government has committed to “engage with China in a professional, in a sober, [and] in a diplomatic way,” the Chinese government needs to understand that Australia won’t (and, in fact, simply can’t) indefinitely skirt around a series of tough policy decisions piling up in the in tray. Not only are these decisions bearing down on Canberra, but Australia and China are divided by vastly different views on the associated issues.

From Beijing’s perspective, adverse decisions on the above issues will unsurprisingly be seen as, among other things, “hyping the so-called China threat” (Confucius Institutes veto), “undermining China’s economic interests” (ending Darwin Port lease), and “interfering in China’s internal affairs” (targeted Xinjiang sanctions). Yet at the same time, Canberra likely sees these same decisions as, among other things, a matter of “protecting Australia from foreign interference” (Confucius Institutes veto), “reducing strategic vulnerabilities” (ending Darwin Port lease), and “defending fundamental human rights” (targeted Xinjiang sanctions). There are, no doubt, other dimensions of how Canberra and Beijing view these issues. And one could, I’m sure, contest how I’ve briefly summarised each government’s view. But those caveats aside, the broad brushstrokes of these contrasting characterisations (once again) point to some of the indissoluble difficulties besetting the Australia-China relationship.

Despite the generally positive diplomatic messaging from both sides in the last few months, Canberra and Beijing have deeply held but also deeply divergent interpretations of fundamental features of international and political reality, national security, and morality. These disagreements make dialogue between the Australian and Chinese governments all the more important. But they probably also make the fruits of such discussions modest. So, assuming Prime Minister Albanese and President Xi end up meeting in a week and a bit, we should all keep our expectations firmly in check.

Canberra, Tokyo, and Wellington together against economic coercion

From the Australia-Japan Leaders’ Meeting Joint Statement issued on 22 October:

“The leaders committed to work together and with other interested countries to address and respond to economic coercion which undermines the international order based on international law and the rules-based multilateral trading system. Both countries will increase information sharing, and explore ways to respond to the challenges.”

Quick take:

This bilateral messaging marks an unambiguous reversion to the Morrison government’s norm of regularly raising concerns about economic coercion. For a brief moment after the May federal election, it appeared that economic coercion would be dropped from Canberra’s diplomatic lexicon. As I’ve flagged previously, this was a potentially diplomatically astute move given China’s likely discomfort with the language of economic coercion. But equally, as I’ve also suggested before, there are, on balance, persuasive diplomatic and political reasons for rehabilitating concerns about economic coercion. Regardless, expressing these concerns is clearly back on Canberra’s agenda.

So, how strongly is the Albanese government hitting the economic coercion note? In a word, hard. In less than two weeks, economic coercion was flagged in three separate joint messages with Japan and one with New Zealand. This includes the Joint Statement (quoted above) and the Joint Declaration at the leader level with Japan, along with the Joint Statement from the Japan-Australia Ministerial Economic Dialogue issued early last month and the Australia-New Zealand trade and tourism Joint Statement on closer economic relations. By my count, “economic coercion” and “coercive economic practices” were mentioned seven times in four separate authoritative joint statements/declarations with two different countries.

Looking back over the last circa 1.5 years of Australian diplomacy on the issue, this is among the most intense and sharpest spikes in mentions of economic coercion in bilateral and minilateral messaging. The only other comparable case was a pair of statements in March this year from the Minister for Trade, Tourism and Investment at the time, Dan Tehan, and the US Secretary of Commerce, Gina Raimondo, and Trade Representative, Katherine Tai. But although those two statements included seven mentions of “economic coercion” (counting subheadings as well), those communiques were issued at a lower level (ministers rather than leaders), were spread over two documents rather than four, and only involved one other country. Obviously, we’re deep into the minutiae now, but it nevertheless speaks to the relative importance of this rapid-fire messaging from Australia, Japan, and New Zealand on economic coercion.

Perhaps most significantly, economic coercion made it into the Australia-Japan Joint Declaration on Security Cooperation. As authoritative as joint statements from leaders and ministers might be, the Joint Declaration is likely to be much more enduring and was almost certainly the product of much more careful negotiation and finessing by both Canberra and Tokyo. Unlike this year’s leader-level Joint Statement, the Joint Declaration presumably won’t be superseded by a new iteration in 2023. Indeed, this Joint Declaration might undergird Australia-Japan security ties for years, and perhaps even decades, to come. So, these recent joint statements and declaration really do elevate and ultimately nail concerns about economic coercion to the Australian government’s diplomatic mast. For reference, the full list of past uses of economic coercion in Australian bilateral and minilateral diplomacy is available here.

Notwithstanding these recent messages, the leader-level Australia-Singapore Annual Leaders’ Meeting Joint Statement didn’t mention economic coercion. The closest it came was a reference to respecting “the rights of countries to lead their national existence free from external interference, subversion and coercion.” But this doesn’t point to an inconsistency with Australia’s shared messaging with Japan and New Zealand on economic coercion or a deemphasis of the issue in general. The Joint Communique of the 12th Meeting of the Singapore-Australia Joint Ministerial Committee in August 2021 also only made a general reference to coercion, while the previous leader-level Australia-Singapore Joint Statement in June 2021 didn’t even mention coercion at all. So, the messaging with Singapore notwithstanding, Australia’s recent statements and declaration with Japan and New Zealand place enduring concerns about economic coercion centre stage in Canberra’s diplomacy.

[Prime ministers Anthony Albanese and Fumio Kishida meet in Perth on 22 October 2022 [twitter.com/@AlboMP]

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