IN FOCUS
By Avishka Ashok 

China and Australia: Four reasons that have caused the relationship to worsen.

Recent Developments
On 21 February, the Chinese Ministry of Defense responded to Australia’s accusations of conducting “acts of intimidation” by pointing a laser at an Australian patrol aircraft. The ministry spokesperson Senior Colonel Tan Kefei remarked that the Chinese Navy was falsely accused; he claimed that the Australian statements were inconsistent with the facts. He also stated that the Australian aircrafts flew close to the Chinese vessel flotilla and tried to cause panic by dropping sonobuoys close to the vessel. Sonobuoy is an equipment that detects underwater sounds and transmits them by radio. It is used for anti-submarine warfare or for conducting underwater acoustic research.

China believes that Australia dropped the sonobuoys to access the PLA vessels’ performance data in the sea. China also raised alarm at the close proximity of the Australian aircraft which was claimed to be less than four kilometers and said that the laser could have been emitted from a rangefinder to measure the distance of the patrol aircrafts from the Chinese vessels.

The Australian Prime Minister Scott Morrison also stressed on the incident and said that the government would demand an explanation from the Chinese administration.

China and Australia: Five reasons that have caused the relationship to worsen.
First, the Chinese influence in the Australian society.
In 2018, the Australian government became alarmed at the conspicuous hints of Chinese influence in the country’s politics, educational institutions and other facets of the Australian society. Chinese influence in Australia has been prevalent for a long time, considering the high scale migration of Chinese nationals to Australia and the following Chinese-Australian second generation that thrives in the country. However, the community has been surveilled strictly by the Chinese for decades. In 2005, it was revealed that the Chinese administration had a system in place to track the practitioners of the Falun Gong, a practice that China banned in 1999. In 2008, another incident illuminated China’s influence in mobilizing students to protests in front of the Australian Parliament against the pro-Tibet movement. Growing interference in numerous other spheres of the Australian society urged the country to take steps to limit China’s presence in the country. In 2016, the then Prime Minister of Australia Malcolm Turnbull issued an investigation to understand the extent of foreign investigation in the country. The report was published in 2018 and revealed that the Chinese government had tried to interfere with Australia’s political partied for the last decade and had its influence in the grassroot local councils as well.

Second, the tariffs and trade war.
In 2019, the trade relations between China and Australia also hit a wall after the two countries increased tariffs on indigenous products and engaged in a trade war. China imposed tariffs on Australian export products to China such as wine, barley, sugar, lobster, coal and copper ore. The trade restrictions certainly hurt the Australian economy since China replaced Japan as the country’s largest trading partner in 2007. In 2020, China also imposed an anti-dumping and anti-subsidy duties on Australian products. Chinese ports also halted the sale of Australian shellfish products and cited “inspection and quarantine measures.”

Third, the COVID-19 origin accusations.
The Australian Prime Minister called for an independent investigation into the origins of the COVID-19 pandemic in April 2020. While China was trying to push back criticisms from the international political system for its handling and its inability to stop the spread from Wuhan, Australia’s call for investigation cornered the country and blamed it for the pandemic. The call for the investigation gained the support of over 110 countries, including the 54 African countries, 27 countries from the European Union, Brazil, South Korea, Mexico, Turkey, Russia, Indonesia, India, Japan, Canada and New Zealand. The initiation of the enquiry led to heightened tensions between China and Australia.

Fourth, Australia’s American tilt. From the Indo-Pacific to the Five Eyes Alliance, Australia’s engagement with the US led initiatives are seen as anti-China by Beijing.
The Five Eyes Alliance is the grouping of the intelligence agencies of Australia, Canada, New Zealand, the UK and the US who agreed to share their reports and data with each other during the second world war. In the 21st century, the alliance has agreed to cooperate on blocking China’s growing influence and monitor its actions in the Indo-Pacific. The alliance has repeatedly taken a stand against China in different cases such as tracking the origins of COVID, protests in Hong Kong, the human rights issue in Xinjiang and supported Taiwan’s participation in the World Health Organization. Australia also moved to prevent the member countries of the Alliance from employing Huawei in its 5G projects. In July 2021, the US also extended its support to Australia and pledged to work together against China’s unfair trade practices in the region. Australia was also successful in gathering the European’s Union’s support in the trade dispute with China at the World Trade Organization. The Chinese government has time and again refrained Australia from commenting on its internal affairs. It also urged Australia and the US to stop creating blocs in the international order. The CPC further accused the country for violently interfering in the elections in Hong Kong in December 2021. 

Fifth, China’s strong response.
In November 2020, China issued a 14-point letter that highlighted China’s irritations with the country. The dossier of 14 disputes included Australian’s government’s funding for anti-China research, unfair seizure of Chinese journalists and academicians, interference in China’s internal affairs, the independent investigation into the origins of COVID-19, preventing Huawei from providing its 5G services, blocking several Chinese projects through the foreign interference legislation, and many more. China also believes that Australia’s approach towards its bilateral relations will be disadvantageous to the country and to the Five Eyes Alliance. China knows that it is the largest trading partner for more than 120 countries in the last decades. In the current economy, all countries are trying to reestablish their supply chains to get back on the economic growth and development which was damaged due to the pandemic. China believes that it is an integral part of this process due to its key position as a major trading partner for most countries, including the countries in the Five Eyes Alliance.

References:
“UPDATE: Australia’s claim about PLA vessel’s laser deployment false: Chinese authorities,” Global Times, 21 February 2022
“Why is the Five Eyes intelligence alliance in Beijing’s cross hairs?," South China Morning Post, 20 June 2022
“The 14 disputes of China to Australia,” Voltaire Network, 23 November 2022
“China bristles at Australia's call for investigation into coronavirus origin,” The Guardian, 29 April 2020

IN BRIEF
By Dincy Adlakha and Keerthana Nambiar 

INTERNAL
Standing Committee Session: Plenary meeting plans to prepare for the fifth annual session
On 27 February, the Standing Committee of the 13th National People’s Congress (NPC) opened its 33rd session. The top legislature of China started this session to prepare for the fifth annual session of the NPC. The session was attended by 157 members of the NPC and presided by the Chairman of the NPC Standing Committee Li Zhanshu. The members reviewed a work report of the Standing Committee and discussed the agenda for the coming annual session. Additionally, the members discussed a draft decision on the ranks for active-duty soldiers of the PLA among other personnel-related bills. They deliberated on establishing a financial court. The upcoming annual session of the NPC is scheduled for 5 March. (“China's top legislature starts standing committee session,” Xinhua Net, 27 February 2022)

COVID-19 in Hong Kong: Record high cases in the city, China vows streamlined medical assistance
On 27 February, Hong Kong reported 26.026 new COVID-19 cases, the highest of the city at all times. The number of infections is continuously rising in the city as morgues near their capacity. Hong Kong is facing a severe shortage of medical personnel and resources as the current facilities are overburdened. Mainland promised to expand help for the city and streamline the procedures to access medical resources. A top member of China’s biggest political advisory body emphasized the need to treat elderly people and patients in critical condition and vowed support to the city through medical staff and equipment. (Chen Qingqing and Liu Caiyu, “Mainland to expand help as HK reports new record infections,” Global Times, 27 February 2022)

Standing Committee Session: China considers the establishment of a financial court in Chengdu-Chongqing
On 27 February, a draft decision on the establishment of a Chengdu-Chongqing financial court was submitted in the National People’s Congress. The court is being proposed with an aim to set up judicial protection of the financial sector and promote the development of the region. The court, if set up, will have jurisdiction over financial matters concerning civil, commercial and administrative lawsuits in Chongqing and other parts of the Sichuan province. The draft said: “The appeal cases filed against the judgment or ruling of first instance made by the Chengdu-Chongqing financial court shall be tried by the Chongqing Higher People's Court.” (“China mulls establishing Chengdu-Chongqing financial court,” Xinhua Net, 27 February 2022)

ECONOMY
Oil trade: China increases its oil reserves despite US plea for release
On 28 February, the Asahi Shimbun reported that China had increased its oil purchase despite the surge in prices. According to the data revealed by the traders and industry, the US has called for a coordinated release of stock to pacify the market. For the first time since 2014, the cost per barrel of oil has reached USD 100. According to the report, China ramped up its purchases soon after President Xi met with the Russian President Vladimir Putin in February 2022. (“China boosts oil reserves, ignoring U.S. push for global release,” The Asahi Shimbun, 28 February 2022)

Supply chain: China plans for new measures to help change its finance mechanism
On 28 February, The Straits Times published the Caixin Global report on China’s supply chain finance mechanism. The reports says that, “China is about to rein in its booming 167.23 trillion yuan market for commercial acceptance bills.” The revisions of the rules is expected to have “dramatic impact” on commercial banks, financial companies, commercial acceptance bill issuers and intermediaries. It also stresses that the commercial bills should be based on real transactions made within six months to one-year time-limit. (“China to overhaul $36 trillion supply chain finance mechanism,” The Straits Times, 28 February 2022)

INTERNATIONAL
Ukraine: China assures support and alternate plan to evacuate its nationals
On 27 February, Chinese ambassador to Ukraine Fan Xianrong said in a video that he has not left Ukraine and is managing the situation in Kyiv. Recently, reports surfaced alleging that the ambassador has fled Ukraine due to difficult times. However, he said in the video: “I want to make it clear that Chinese ambassadors will never leave the Chinese people behind on their own. This is not how the Chinese ambassadors are like, and is not how the members of the Communist Party of China are like!” The Chinese embassy in Ukraine also assured that 24/7 contact lines are open and first-hand information is being relayed to all Chinese nationals stuck in Ukraine. The embassy said it has set up online groups to reach out and evacuate these nationals as early as possible. (“Chinese ambassador to Ukraine rejects rumors, says he will never leave Chinese people behind,” Global Times, 27 February 2022; “Exclusive: Chinese embassy in Ukraine mulls alternative plans apart from charter flights to evacuate Chinese nationals amid rising tensions,” Global Times, 27 February 2022)

Ukraine: China opposes unilateral sanctions on Russia; Germany stresses on China’s role in the crisis
On 27 February, Chinese Foreign Minister and State Councilor Wang Yi shared a telephone conversation with German Foreign Minister Annalena Baerbock. While State Councilor Wang Yi stressed that unilateral sanctions on Russia will not help the issue and that NATO should avoid further tensions due to eastward expansion, Foreign Minister Baerbock said China has a “special responsibility” towards Ukraine. China abstained from a UNSC resolution to deplore the Russian invasion of Ukraine. Chinese authorities state that economic and international sanctions have no basis in international law and will affect the process of political settlement. (“China opposes unilateral sanctions, which will affect the process of political settlement,” Global Times, 27 February 2022; “Germany stresses China’s ‘special responsibility’ over Ukraine,” The Asahi Shimbun, 27 February 2022)

China-US relations: Foreign Minister invites the US to join BRI and shows willingness to work with Build Back Better G7 initiative
On 28 February, the Chinese Foreign Minister and State Councilor released a video message to mark the 50th anniversary of the Shanghai Communique that normalized the relations between China and the US in 1972. In the video message, he said that China is open to welcoming the US in the Belt and Road Initiative. He also said: “We are also willing to consider coordinating with the U.S. 'Build Back Better World' initiative to provide the world with more high-quality public goods.” He encouraged the US to stop supporting Taiwanese secessionists and ease tensions on the matter. (Yew Lun Tian, “China willing to work with U.S. on Build Back Better World initiative,” Reuters, 28 February 2022)