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17.03.22

Xi’s China must distance itself from Russia

I’ve written before about the impasse that exists between us and China, indeed, between the West and China.

In the current, uncertain geopolitical environment, the last thing we need, as a consequence of breast-beating leadership, is the West, including Australia, driving China into the arms of Russia.

As I have said before, for us, China is up the road.

As Greg Sheridan has said, of all the nations in the Western alliance, we are, long-term, amongst the most vulnerable and the least prepared to be taking on anybody.

Surely the words of Hamlet now apply, “The time is out of joint; O cursed spite, that ever I was born to set it right.”

As each day passes, there is no evidence that any Australian politician is seeking to set things right in relation to China.

Almost paradoxically, and forgetting Russia for a moment, life isn’t a bed of roses for Chinese President Xi.

Unlike his predecessor, Xi has tried to steer China away from capitalism and the West; but this has slowed down economic growth and the tightening of controls on private businesses sees economic growth, in China, down to four per cent in the fourth quarter of 2021, after an 18.3 per cent growth at the beginning of the year.

Senior Chinese officials are not impressed, yet Xi is seeking a third term at the meeting of the Communist Party later this year.

As Russia and Putin become international pariahs, senior Chinese officials are openly saying that there are “too many downsides for China to be aligned with Russia.”

This followed reports that Moscow was asking Beijing for military equipment to support its invasion of Ukraine.

As Chinese officials see the effects of sanctions on Russia, they are starting to wonder what effect such sanctions would have on them if Chinese companies and banks were to help Russia.

As Diana Choyleva the Chief Economist at Enodo Economics, a London-based risk forecaster has said, “The Ukraine crisis has made Xi Jinping’s domestic economic challenge harder at a time when he craves stability.”

Xi’s predecessor was about opening China to the Western world yet China’s relations with the US and its allies have rarely been poorer.

There are smart people in the Chinese Administration who are unhappy at the thought that China may now be regarded by the West in the same light as Russia.

Already, Beijing has agreed to purchase oil and gas from Russia, prior to the Ukraine invasion, almost $120 billion.

Lingling Wei, the chief China correspondent for The Wall Street Journal, writes of Hu Wei, a senior advisor to China’s State Council, in a piece which, admittedly, has been taken down by Chinese censors, “China can’t be tied to Vladimir Putin and the ties need to be cut off as soon as possible. Cutting off from Putin will help build China’s international image and ease its relations with the US and the West.”

So, make no mistake, there are tensions within the top level of the Chinese Government concerning the strategies of President Xi.

As reported by Lingling Wei, “Last year Xi Jinping rallied the whole Government behind his campaign to clamp down on capitalist forces… restricting overseas share listings and shutting down lending to property firms in a realignment of socialist principles. By the end of the year, developers’ sales were plunging more sharply than during the Global Financial Crisis and big tech firms, long draw for the young and bright in China with their Silicon Valley vibes, were laying off droves of staffers.”

Australia, of course, has seen the Chinese sanctions against our exports.

But by the end of last year, many in the Chinese Administration were acknowledging that Xi’s economic campaign had gone too far.

The notion that Xi’s hold on power could be questioned was unthinkable a few months ago.

But these significant domestic concerns about the Chinese economy make it fairly unpalatable to contemplate economic sanctions should China be seen, by the world, as supporting Russia.

It is now clear that Putin, surrounded by yes men, was not made aware of the deficiencies in the Russian military.

After all, who was going to tell him?

Those deficiencies have been exposed by the sturdy and committed Ukrainian defence.

Many are saying that the Russian military campaign in Ukraine has been a failure.

Surely, if common sense tells us China don’t want to become the international pariah or, indeed, war criminal, as Russia has become, it is time for someone in the Australian Government to cash-in diplomatically on three significant strategic features – a weakening Chinese economy, a questioning at the top of Chinese leadership and an unwillingness by China to be branded, internationally, as Russia have been.

Who in Canberra can turn all of this to our advantage?