Every so often a story is published about China that takes the breath away. The revelation that emerged last week that China’s Ministry of State Security was found to have hacked the Australian parliament and Australian political parties, but nothing was done about it for fear of disrupting trade, is astonishing. An attack on Australian democracy is shocking enough. It is yet another example of an autocratic country assailing liberal democracies and of China’s contempt for a rules-based international order.
But perhaps the response from the Australian government was even more remarkable. When Reuters broke the story, the office of Australian prime minister Scott Morrison and the Australian Signals Directorate (ASD), the country’s cyber intelligence agency, both refused to comment. This then allowed China’s Foreign Ministry to, as ever, adopt its favoured stance of ignorance and victimhood, saying: “When investigating and determining the nature of online incidents there must be full proof of the facts, otherwise it’s just creating rumours and smearing others, pinning labels on people indiscriminately. We would like to stress that China is also a victim of internet attacks.” So far so craven.
Here is yet another instance of an institution pulling its punches for fear of upsetting Beijing. Of course, this fear is warranted, for Beijing goes out of its way to respond hyper-aggressively to any moves it dislikes, often using its economic clout as a very big stick. The examples are legion: Norwegian salmon was barred from China when the Nobel Peace Prize, hosted in Oslo, was awarded to Chinese dissident Liu Xiaobo in 2012; the South Korean supermarket chain Lottemart was boycotted when the nation deployed the anti-missile THAAD system in 2017; Japanese firms from Hyundai to restaurants were blocked and abused when the nation nationalised the Senkaku Islands to which China lays claim (calling them the Diaoyu Islands) in 2012; and Vietnamese fishermen are regularly forced out of the South China Sea by Chinese vessels with water cannons.
Similarly, China has a conscious strategy of manufacturing outrage so that Western firms follow Beijing’s will on areas such as Taiwan, Hong Kong and others. But to forgo criticism of China for a massive cyberattack and, fundamentally, an attack on democratic institutions seems a forbearance too far. If we cannot defend our way of life at least rhetorically then we are nothing.
China’s success in the late 1990s in “decoupling” economic affairs and human rights (and other areas of egregious behaviour) during its World Trade Organisation accession talks with hindsight appears a move of strategic genius. As long as trade progresses, China can essentially excuse any behaviour. Trade will continue. As long as the promise of the great Chinese market was held out, Western countries have largely bitten their tongues, even as Xi Jinping has nakedly sought to undermine the world order. China’s horrific treatment of the Muslim Uighyur ethnic group in the far-west Xinjiang province, where perhaps one million are in concentration camps (or “vocational training centres”) and its deplorable treatment of Western journalists, for instance, receive very little push-back. In the first instance, Muslim nations such as Pakistan and Saudi Arabia have said very little about Xinjiang. In the second instance, while some are beginning to push for “reciprocity”, nothing effective is ever done, and Chinese state media organisations remain free to purchase propagandising advertorials in Western outlets from the Daily Telegraph to the Washington Post.
The effectiveness of this chimera may be coming to an end. One can only hold out promises for so long before disillusion sets in. It is not only China’s diplomatic and political moves that are beginning to turn many against it. China’s economic policy has plainly taken a sharp turn towards statism, reversing its economic trajectory since opening up began in 1978. The promise of the Third Plenum in 2013 – that markets would have a “decisive role” in the Chinese economy – is long dead. Similarly, Simon Rabinovitch of The Economist revealed that “[i]n the decade before Xi’s presidency, growth of private-sector investment outstripped that of state investment 90% of the time. Since 2015, [the] state has been on top 75% of the time.” Promises of entry into the Chinese system given during WTO accession talks, such as those for Mastercard and Visa, have still not been met, while the Chinese equivalent Unionpay is steadily becoming more visible in Western nations. And that’s even before we consider Western internet businesses being blocked from China. Mark Zuckerberg’s efforts to ingratiate himself with the Chinese government, such as being photographed with a copy of Xi Jinping’s The Governance of China, have been almost comically ineffective.
In this light, Trump’s trade war and economic divergence policy looks entirely comprehensible. His talk of China “stealing” hundreds of billions of dollars in trade may be a nonsense. (If, however, he said that China had stolen that much in intellectual property he would have a very strong case).
But there is a definite sense that China has been taking the world for a ride, with some now even calling China’s entry to the WTO “the worst decision the West ever made”. China’s desire to “decouple” trade and its diplomacy could be condemned to failure. We will have to consider the Chinese government holistically, as one, rather than picking and choosing the areas in which we engage. As Australia will testify, we can no longer avert our eyes.
