Lessons from Australia

19 May 2020

While alarm bells arose in Australia over the recent double strokes by China making agro products exports to that country, Australia’s single largest market for exports, grind to a halt, it is also a testimony to how USA as a leader of the Western World and as a strategic stake holder in Australia failed under Donald Trump’s Presidency.

Few people are able to accept openly cause and effect, especially since Australia is largely to blame for her growth focused approach of the last half a decade or so. In an effort to grow, and capitalise on the growth of China which was switching to practical capitalism of the kind that American scholars would find familiarity with, Australia allowed Chinese conglomerates to invest in her natural resources, accepted Chinese funding into strategic research establishments and of course operate Aussie Universities as off main land campuses for wealthy Chinese families. For a time Pakistan used to offer similar facilities to Saudi Arabia and UAE, now her inability to grow has led to its use more for ‘falcon hunting’ or such royal pursuits. We know that Pakistani brides are her leading ‘imputs’ into China, that Pakistan is sold on her all weather friend across the Karakorram Highway. The more you study Australian economic architecture, the more you realise that Australia is somewhat like Pakistan, a Darwin for a Gwadar, dairy farms, dairy industries, beef farms and abattoir, ground water resources in Australia form major Chinese holdings in Down Under! I know Western strategists will cringe, one would expect some to even violently disagree, but the writing in all those long term 99 year leases is not any different.

There was first the Trump disdain for existing free trade agreements and proposed ones. The easiest picking for America under Trump was the Trans Pacific one which saw great strides of progress under Obama, and a low hanging fruit. Great powers are often myopic. Like Indian subcontinental rulers accustomed to seeing assaults on existing power structures emerge from its western fringes, across the Khyber pass, areas contiguous to Indus riparian lands, areas once strategically part of the great Indus River Valley Civilisations ( now increasingly annotated as Harappan or  Saraswati River Valley Civilisation) could not see how through the trade route colonial powers of late medieval Europe including the Dutch, Portuguese, French and British would jockey for power, before India completely became a Crown Possession from the high seas, American Strategic Actors are unable to see that Atlantic which is more like a swimming pool is not their waterfront anymore, but the real deal emerging is Pacific Ocean. This despite the nastiest military action to Continental USA happened through that direction, when USA experienced its ‘Day of Infamy’ over Pearl Harbour at the height of World War II.

In the last four years now, USA has been slipping in the TransPacific region, nothing showing up this more than the slipshod handling of an outbreak of Corona Virus on board its capital vessel of the Pacific Fleet, the USS Theodore Roosevelt. While the behaviour of Captain Crozier remains one still under examination by military experts, I can say that he was chickening and worried if his charge would not be allowed to port to prioritise the pandemic. His actions after he violated the command and leaked his communications to the media, that forced the hand of US Naval Headquarters, bordered on the ridiculous, especially since the farewell when he was taken off command ended up creating a cluster on the vessel! Being a career professional, he has no doubt worked old school boys union and other ‘cartels’ of arms and course batch camaraderie, he managed to get the recommendation to return him to command. However the US Acting Naval Secretary did not act on these recommendations and the officer was reassigned temporarily as an aide to the US Naval Air Operations Chief in San Diego.(https://nypost.com/2020/05/07/fired-uss-theodore-roosevelt-captain-reassigned-to-san-diego/)  As of now the aircraft carrier is expected to resume operations from Guam and sail for South China Sea after this unscheduled break in operations of two months.(https://www.wsj.com/articles/uss-theodore-roosevelt-set-to-return-to-sea-as-covid-19-threatens-comeback-11589837384) What this episode showed the PLAN and the ASEAN Navies is that US Navy does not regard the South China Sea with the same level of threat and military posturing as it does the Persian Gulf. This when there is visible evidence of how over each passing year, China has expanded on her naval and overall military capabilities in this region and has shown disproportionate aggression in dealing with her contested island claims all across the Pacific, whether with Japan or with Vietnam!

So the collapse of the TPP and its current status (https://www.npr.org/sections/thetwo-way/2018/03/08/591549744/the-tpp-is-dead-long-live-the-trans-pacific-trade-deal) where countries have gone ahead without the US but have left more than a door open for it to reenter, has created a new set of tensions for both proponents and opponents of free trade in these 11 signatory countries which include Mexico, Peru, Chile and Canada on one side of the Pacific, with Malaysia, Brunei, Australia, NZ and Japan on the other side, this CPTPP is still the third largest trading bloc after NAFTA and EU, despite it not having the US on board. Yet what this tussle America created was enough strategic gap to allow for China to poach on economic interests across the Oceania/Polynesia, and of course Australia. Yes, Aussies know that the US is their biggest investor, and for Aussies too, USA remained their own Number 1 investment destination. Mr Trump and Mr Morrison inaugurated a recycled paper plant in Ohio in September 2019. (https://www.smh.com.au/business/companies/we-were-the-only-ones-how-australian-billionaire-anthony-pratt-cashed-in-on-us-garbage-20200131-p53wdg.html)

Australian thinkers assumed that China would learn from Hong Kong as she grew, and using the traditional links with Hong Kong to Eastern Asia and Australia, China leveraged herself well, making inroads through companies of the mainland with official addresses from Hong Kong! However China’s transformation into one giant Singapore has apparently not manifested in the eyes of this clique and now there is a clear call out for a review of Chinese footprints in Australia and proposals to work out a strategy to unroll some of these if not all of these inroads from the world’s second largest economy and increasingly a superpower into this continent sized country!

A Biden Presidency could see some serious handholding that Aussies would need for the medium term so that they can effectively decouple from China. Inside Australia too, there are lobbies that find Chinese investments vital, presence of Chinese shoppers and tourists, her student population essential to local business prospects! For now the high handed response of the Chinese which affected the agricultural lobby directly is a strategic miscalculation by China, however, it may have sent a warning shot across the bows of other countries to ensure that they fall in line and do not make the waters choppy for President Xi in the face of growing calls for an enquiry into his government’s handling of the Wuhan outbreak in concert with the WHO!

What all this shows is in the lives of nations, the greatest risk is leadership that focuses on short term. That looks at civilisational issues with the lens of commerce alone! It shows however robust an individual country can be, technologically adept, financially sound and advanced, with great skill levels in her population, choices made to feed the demand for growth can upend her own interests in the long term. That nations need hand holding when they are at cross roads, some thing the US failed to do for their ally Australia in the last four years…Who would have thought, EU still was able to keep her nose above the water, despite all the veiled and not so veiled attacks from President Trump, even as Australia would end up where she is now- exposed to Chinese trade tactics, overexposed to Chinese presence in her economy!