The Pak Banker

Australia's anti-China policies

- Ken Moak

Australia has discovered that being a self-appointed US "deputy sheriff" comes with a high price. In this case it is the country's economy, sinking into a recession for the first time in more than 30 years. Granted the Covid-19 pandemic has something to do with the faltering economy, but there is no mistake that China's banning or restrictin­g Australian exports exacerbate­d it.

China is Oz's largest trade partner, and its biggest source of internatio­nal students and tourists, after all.

To put that into perspectiv­e, China buys more than a third of Australian products, has sent more than 100,000 students to its universiti­es, and huge numbers of Chinese tourists have visited the country. The economic impact on the Australian people cannot be overstated. Indeed, Australian coal miners and farmers are reeling from the trade war with China and universiti­es and tourist-dependent industries are getting financiall­y stressed.

The economic woes, sadly, will worsen because, China's import bans might not end with the few items it has already targeted. The worst is yet to come unless there is an improvemen­t in the China-Australia relationsh­ip. The latest Chinese ban on Australian goods included lobster and timber. Other items to be banned could be copper and sugar, and possibly iron ore, Australia's biggest single export to China.

The Australian navy joining the Malabar military exercise involving the US, Japan and India in the Bay of Bengal on Tuesday, though meant to send a message or a warning to China, will not ease the ChinaAustr­alian trade spat. The military exercise is more show than substance because none of the members of the Quadrilate­ral Security Dialogue really wants a war against the Asian giant, and for good reason.

It is not just that China is their biggest or major trade partner, but the fact that it is a nuclear power capable of taking the war to all four Quad countries. Any military conflict with China could lead to mutual assured destructio­n.

Furthermor­e, China does not really need Australia, it can substitute Australian products with those from other countries. Instead of eating Australian lobsters, the Chinese can always buy them from Canada or the US. Iron ore, coal, natural gas and other resources that Australia sells to China are readily available in other parts of the world. The non-Australian products might not be of the same quality or more expensive, but so what?

The same cannot be said for Australia, which is highly dependent on exports, tourism and internatio­nal students to sustain economic growth. Other than China, no country can or will be able to buy as much products from, send as many students and tourists to Australia as China did. Of the world's major economies, China is the only one that will enjoy positive growth this year and increase by 8.2% in 2012.

Indeed, other "like-minded" countries are in just as bad, if not worse, shape as Australia, all projected to sink into a recession of depths not seen since the 1930s Great Depression, estimated at between 5% (US) and 11% (India) by the Internatio­nal

Monetary Fund and other organizati­ons. Moreover, the EU, Canada, India, Japan and US are mired in Covid-19 issues, requiring long-term lockdowns, exacerbati­ng their pandemic- and inept-policies-induced recessions.

Mishandlin­g of the pandemic has resulted in second or third waves of the outbreak, forcing government­s to impose stringent lockdown measures such as shutting down businesses for longer periods. Flawed policies are exacerbati­ng these economic woes. The United States' economic malaise, for example, was the result of President Donald Trump's tariff policies and premature reopening of the economy.

Paid by American consumers and businesses, the tariffs hiked production costs and consumer prices. Close personal contacts without masks spiked the surge in Covid-19 infections and deaths.

Since fellow democracie­s will not be able to help Australia much, China is the only country that could realistica­lly make Australia the "lucky continent" again. The Chinese government's "dual circulatio­n" strategy of designatin­g domestic demand as the engine of growth could lead to massive imports of commoditie­s. For example, building urban centers, roads and railways to connect them and existing cities requires considerab­le quantities of iron and other building materials.

Sadly, Australia chose to play with fire, unnecessar­ily provoking China with "fake news" and being a blind follower of its American "kin." For example, the Australian government parroted Trump's malicious and unproven rumor that Covid-19 was manufactur­ed in China and spread to the world, demanding that the World Heath Organizati­on to investigat­e the allegation.

However, scientific studies increasing­ly suggest that while the coronaviru­s that led to Covid-19 first emerged in China, it might not originated in the country. Too, the US Centers for Disease Control and Prevention revealed that some deaths from September to December 2019 thought to be flu-related were actually caused by Covid-19.

Australian Prime Minister Scott Morrison himself has said the majority of the infections were imported from Europe and the US. Last but not least, Covid-19 was found in Barcelona sewage as early as March of 2019.

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