February 09, 2021

Warning from Australia: Meet the Threat of Chinese Economic Coercion to Democracy

By Megan Ophel

What do tariffs on Australian wine have to do with global democracy? For the Joe Biden administration, they represent an emerging challenge as China’s far-reaching economic coercion can threaten civil society and democratic values. China has relied upon economic measures in a nearly year-long dispute with Australia, but the core of the issue between the two countries is not economic but political—it is whether China can leverage its economic heft to impose its will upon, and receive the full deference of, a democracy. As strengthening democracy at home and abroad is a central aspect of its foreign policy plans, the Biden administration should heed the warning from Australia. With growing economic reach, China is strengthening the coercive tools at its disposal and working to perfect their use against democracies.

This is not the first time Australia has acted as the canary in the coal mine. When the Trump administration declassified its 2018 Indo-Pacific strategy, Axios reported that officials cited Australia’s experience with Chinese influence operations as strongly influencing the drafting of the document. After a string of high-profile scandals exposed pervasive covert efforts by Beijing to manipulate Australian politics, Canberra mounted a vigorous response, culminating in 2018 with a far-reaching set of counter-interference laws and reforms. Its covert operations thwarted, China has switched gears to more overt exertions of power.

China is strengthening the coercive tools at its disposal and working to perfect their use against democracies.

Since Canberra’s call for an independent inquiry into the origins of the coronavirus in April 2020, China has deployed an array of coercive economic measures against Australia. These measures include punitive tariffs and de-facto import bans on crucial Australian agricultural exports such as barley, timber, beef, coal, and wine, threats of boycotts, warnings to potential university students, and regulatory foot-dragging delaying Australian lobster exports. In November, the Chinese embassy in Canberra provided several Australian news outlets with a dossier of fourteen grievances. Some of those complaints were economic, such as the tightening of Australian foreign investment law, and the decision to ban Huawei and ZTE from Australian 5G networks in 2018. However, other grievances were political: the “political manipulation” of calling for an independent inquiry into the origins of the coronavirus, or the temerity to make a statement on the South China Sea.

Read the full article from The National Interest.

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