Why Australia’s military pact with Japan is bad news for China trade relations

- November 26, 2020 3 MIN READ
china trade

The Prime Minister’s recent visit to Japan codifying a pact for increased military cooperation between our nations will have roll-on effects to Australia’s  already tense relationship with China, writes China strategist and negotiation expert Leonie McKeon

For some reason, the Australian Government thinks this pact will have no effect on Australia’s deteriorating relationship with China, our major trading partner, as Australia is free to sign agreements with whoever they choose. This is a short-sighted view of the situation, showing no interest or knowledge of the complex history regarding the relationship between Japan and China and how this could affect Australia’s relationship with our biggest trade partner.

In the late 19th century and first-half of the 20th century, there was continual conflict between Japan and China during which China was forced to cede possession of Taiwan, and Korea was also lost. In the 1930s and the 1940s Japan invaded Northern China resulting in the deaths of millions of people. This is remembered as “The Rape of Nanjing”, which was a significant event from this period. The wounds from Japan’s invasion of China are still deep, and for many decades Japanese companies found it difficult to sell products into China. To this day China is still waiting for an apology from Japan.

The Prime Minister’s visit to Japan to sign a military pact, while our relationship with China is at an all-time low, is not appreciated by Beijing, and just adds more fuel to the bonfire of our trade relationship that is furiously burning away.

Beijing feels upset and insulted by the Prime Minister’s visit to Japan when he has yet to visit China.  Had our politicians realised the impact of Japan’s invasion on China, they may have thought more carefully about signing this pact with Japan at this time, considering where our present relationship is with China. If we want to re-establish our relationship with China this was unquestionably the wrong time to be signing agreements with Japan.

This visit to Japan will inevitably send our already deteriorating relationship with China further downhill. We have experienced the recent bans on some of our major exports as China flexes its muscles to make us hurt. The flow-on effect is that the Australian business community, who are dealing with China, will suffer through however China wants to punish us.

Even though our relationship with China is deteriorating, the fundamentals of the relationship that we have built up over many years are still there. This is demonstrated when Chinese people continue to purchase Australian products.

Despite what we hear in the news, Chinese consumers are still purchasing Australian brands. For example, on Singles’ Day 2020 on 11th November the biggest global online and offline sale, Chinese consumers purchased a huge volume of Australian products. However, we cannot ignore the fact that the relationship between Australia and China in on a downward spiral.

In Chinese culture, you must be a friend before you can begin to develop a business relationship. “Friends before business” is a popular Chinese saying. The concept of having a trading partner as your friend may be foreign to our political leaders, however, it is as a friend that China still perceives us. A friend who has treated their Chinese friend badly by not visiting, and not recognising the overtures made to repair the relationship, and then by visiting the one country about whom they have most unfortunate history.

The reality is that the future of the growth and sustainability of the Australian economy rests heavily on our re-establishing this important trading relationship with China. If Australia’s trade relationship with China is important, we need to understand much more about Chinese history and Chinese culture. The message is simple, our politicians need to understand the broad consequences of their actions in relation to our major trading partner.

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