Difficult adjustments await in 2021. The two countries are fighting over everything from
the Beijing government’s response to covid-19 to Australia’s participation in naval
exercises in the Indian Ocean. The list of Aussie exports boycotted by China grows
longer by the month. Having banned beef from several big abattoirs and whacked tariffs
on barley, it has ordered factories to stop buying Australian cotton, and threatened a
catalogue of other goods, from timber to wine to lobster.
Those who play down the risks of Oz’s exposure have always claimed that China cannot
readily replace the vast supplies of Australian resources that fire its industrial
revolution. Yet lately Chinese importers have been turning away Australian coal as well.
Australia depends far more on China than the other way around. If the bigger country
wants to play the bully, it has plenty of room to make the smaller one squirm
economically, while hardly feeling a pinch at home. At stake is not only Australia’s
prosperity but the very assumption that has informed its place in the modern world:
that it can rely on China to drive its economy while retaining America as its most
important military and diplomatic ally.
At the same time, Australians are increasingly concerned about outsiders (and one in
particular) meddling in their democracy. Politicians are seeking new powers to prevent
such “foreign” interference, and want to air grievances about China’s military
expansionism and infringements of human rights. That leaves them facing
uncomfortable choices.
In the year ahead Australians will have to work with other like-minded countries to
stand up to their biggest trading partner. The harder line will spur vigorous debate
about how much that will cost their lucky country—and where it should seek its fortune
in the future.
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