‘New reality’ Aussies must face with China
Treasurer Josh Frydenberg has warned Australians it is too late to hope the threat of China will fade away.
Australians will have to learn to tolerate the threat an increasingly wealthy and powerful China poses to our regional security, federal Treasurer Josh Frydenberg has warned.
Speaking at the ANU Crawford leadership forum on Monday, Mr Frydenberg said there was now “no doubt” an environment of intense global competition – similar to that of the Cold War – had returned.
“Heightened strategic competition is the new reality we must face both now and likely into the future,” the Treasurer said.
“There can be no doubt that strategic competition is back – it is a defining feature of the security and the economic landscape that we face.”
Mr Frydenberg said Australia would continue to feel the burn of this new hostile environment particularly badly due to our close economic relationship with China, who remains our top trading partner.
“In many ways, Australia is on the front line of this new strategic competition,” the Treasurer said.
“We have faced increasing pressure to compromise on our core values – and we have stood firm, as we always will.”
While Mr Frydenberg drew some similarities between the tense Cold War era and the unpredictable new China-dominated global environment of today, he warned that in many ways, the current global environment was even more complicated.
“We have faced strategic competition before, including during the Cold War, but there are more important differences,” Mr Frydenberg said.
The Treasurer cautioned that while the Soviet Union had been largely cut off from the rest of the world during the Cold War, China was now an international trading superpower.
“Almost 130 countries now have China as their leading and largest trading partner. This combination of economic weight, global integration and assertiveness poses new and significant challenges for many countries around the world – and Australia is no exception.”
Despite our close trade ties, Mr Frydenberg slammed China for its aggressive conduct in the international trade market.
In July, Beijing slapped eye-watering tariffs of up to 218 per cent on Aussie wine exports, after Chinese officials accused Australia of publicly “smearing” the country.
“We have been subjected to economic coercion,” Mr Frydenberg declared on Monday.
“Competition does not have to lead to conflict. Nor does competition justify coercion.”
Mr Frydenberg lamented findings from the Australian Strategic Policy Institute that between 2010 and 2020 China had used coercive tactics 152 times against 27 individual countries, including Australia.
In order to manage our unpredictable neighbour, Mr Frydenberg said, Australia would now need to make great efforts to achieve economic resilience in the face the volatile and reactionary nature of China’s global conduct.
“Given the changes in our external environment, there will be times when we must pay a premium to protect our economy and ensure long term economic resilience. It is also the case that Australian businesses will need to enhance their own resilience.”
The Treasurer instructed Aussie businesses who benefited from the Chinese-Australia trade boom to continue to profit from the relationship, but warned a backup plan was also needed.
“Businesses also need to be aware that the world has changed and that creates greater uncertainty and risk,” he said.
“They should always be looking to diversify their markets, and not overly rely on any one country.”
By adopting a “China-plus strategy” where Australia would turn to our other major trading partners such as the US and Japan for greater trade opportunities, Mr Frydenberg said he believed a safe and strong economic future would be possible for the nation despite growing global tensions.
“Australia is on the front line of this new battleground, but we have shown great resilience to date,” he said.
“I am confident in our ability as a country and as an economy to withstand any shocks that we may face … this is a responsibility that we all need to take seriously.”