The folly of Australia’s push for independent inquiry into the coronavirus outbreak in China

Yesterday afternoon I was interviewed by Kylie Merritt and David Koch on Ausbiz TV's The Pulse. I was invited to speak about the folly of the Australian government's high-profile push for an independent international inquiry into the coronavirus outbreak in China. The full interview can be watched on the Ausbiz TV website via this link: Australia needs to redefine its China relationship.

A full transcript of the interview is below:

Kylie Merritt: There's another relationship we should be looking at; it’s Australia's relationship with China which is currently in a bit turmoil after Scott Morrison angered the [Chinese] government by calling for an inquiry into the Corona virus pandemic and its origins. Now expert Alistair Nicholas says Australia should have been a little bit more pragmatic and let stronger countries lead the inquiry charge; instead, what Australia should be doing is building a stronger relationship with China that goes beyond just selling things to them and instead should look at how we can collaborate better. Alistair joins us now. Thank you so much for your time. I guess the first question: Devil's Advocate; we already have a very close relationship with China. If not us, who in the international community should have made this call?

Alistair Nicholas: Well I think a lot of other economies have been much harder affected by the coronavirus. If you think about Italy, Spain, France, Germany, the UK, and the US, it doesn't really make a lot of sense that Australia, which has not been as hard hit as any of them, would be the first one to come out and be calling for an international independent inquiry; and if you know China and if you think about China it's the sort of thing that is going to incense them, that's going to anger them, and I wasn't surprised to see that the [PRC] Ambassador came out and said this would impact Australian exports into China, that Chinese consumers might react very negatively to this sort of thing. I think we would have been much smarter to have waited and let someone else take the lead on this, and then possibly sign up to what was being called for rather than going out there raising the banner. The other thing that is very telling is that when the Prime Minister called around to France and to the UK to ask them to support us in this call [for an inquiry], they had responded very lukewarmly with a “well now isn't really the time; we've got to focus on fighting the coronavirus: Let's leave that aside for a while” - and that really says that they didn't want to anger China right at this stage where they do need support from China in fighting the coronavirus, they need information on some of the things that worked in China, they need to continue to import a lot of the PPE and other medical equipment to be able to continue the fight, so why risk angering China at this time?

David Koch: and, Alistair, it's just logical that everyone wants an investigation into how this pandemic started and what we can learn from it to make sure it doesn't happen again. But, it sort of continues the history of the Australian government being, I think, really naïve in its dealings with China - not understanding culturally that the power of words to the Chinese are much more powerful than they are to us. We treat words as almost marketing. You know an Australian sledge is almost taken for granted and then we move on. But the Chinese, they take it personally don't they? It's all about face and trust, and they remember?

Alistair Nicholas: That's absolutely true, David. I lived in China for 13 years and one of the things you really learn about Chinese culture is how important face is. Even in an office setting in China, if you had a disagreement with someone you didn't yell at them, you didn't raise your voice. You would sit down, and you would have a quiet discussion behind closed doors to point out what your concerns were. Face is that important and what happens in these situations is Australia may have legitimate things to raise with China – and, and I believe we do: there are a lot of things that China does that we can't be happy with, that we don't support. Not raising them [publicly] doesn't mean we're appeasing them on those things. There is a way to do it, and that way is to meet with them, coming into a closed room to have a discussion with them, even doing it through diplomatic channels. But when you get on the world stage with a megaphone to point to the issues, that is going to just raise the anger of China and China has had a long history of having to deal with this from the West in particular and sees that it has a need to start to stand up to that. I think that's what we saw with the [PRC’s] Ambassador coming out to criticise what the Australian government had been saying and to make what were not very well-veiled threats against Australian trade if we continue to [push for the inquiry].

David Koch: Yeah; it sort of makes us look like a lackey to the United States too, doesn’t it? Understanding that in the US - and Trump is bleedingly obvious with this playbook - but throughout all of their history Americans need someone to hate; whether it's the Vietnamese during the Vietnam War, whether it’s ISIS terrorists, now China, the whole view is “America's great, we’re fighting against somebody” - but we don't need to be dragged into that?

Alistair Nicholas: Well, I won't get into that analysis of American politics - I'm not an expert on American politics. But I think the real issue and the way China sees it is Australia came out first to call for this independent inquiry and the only country that has now come to our support is the US which has its own particular beef going on with China, which is to do with trade, to do with the strategy of decoupling itself from the Chinese economy, and now playing into it is the coronavirus crisis and perhaps that it wasn't well handled initially by Trump. He's getting a lot of criticism at home about that and he's looking to shift the blame and point somewhere else and say “don't look here look over there” and it just looks as though Australia has supported Trump, supported Trump and supported the US, has become the voice of the US in this issue and we didn't really need to be. We could have let the US and China have their own disagreement, deal with it between each other without us coming out. And I again note that the European countries have not come out to support Trump as strongly as we have on this particular thing.

David Koch: Yup. Okay. We've had this discussion with Malcolm Turnbull the other day, last week, he said “we've got to stand up for ourselves with China, they need us more than we need them,” which I did challenge him on and say “well they probably need our iron ore, but we need them for international students and tourism, which are in our top four major exports. So; we're going into the deepest recession in memory and we don't want to really annoy our biggest customer, do we?

Alistair Nicholas: I think you're making a very important point there, David. We don’t really want to annoy them, particularly, particularly at this time. The fact is that apart from iron ore, which is our biggest export, the other main exports that go to China, that we need the China market for, are education (about $12 billion a year) tourism (which is about $4 billion a year), and then there's all the beef and the wine that we send to China, plus the other food and agricultural products. If we anger China yes they may still need our iron ore and they may continue to buy that, but the rest of the economy is going to be impacted by the fact that they could decide to send their students to another market, they could decide to send these tourists to other markets by just not promoting Australia, or by putting out travel warnings - and they have done this in the past and it has impacted markets like Japan, South Korea, Taiwan, and the United States; so, there's no reason to think China will not do that and it's going to be the average Australians who are affected by that, the people that Scott Morrison likes to call “the quiet Australians”.

David Koch: Yup. Absolutely. Alistair Nicholas, thank you for your time and your analysis today.

Alistair Nicholas: My pleasure, David.