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China's wolf warrior trade threats backfire, uniting Asia and West

Nations hit by sanctions and boycotts form alliances, shift supply chains

Chinese President Xi Jinping and Australian Prime Minister Scott Morrison have been at odds since spring, when Australia called for an independent investigation into the original source of the novel coronavirus. (Source photos by AP and Reuters) 

TOKYO -- A belief that as trade increases nations become less disputatious won the day about 20 years ago when the global community was debating whether to allow China into the World Trade Organization.

But the hypothesis, long maintained by liberally minded international relations experts, is being challenged as President Xi Jinping and his government exploit other countries' trade reliance on China, and as they increasingly wield this reliance as a diplomatic cudgel.

More and more Beijing demands that other countries come into alignment with its stances, imposing what amount to trade sanctions on those that fail to toe its line. Typical of China's approach is a pressure campaign against Australia.

In April, Australia called for an independent investigation into the original source of the novel coronavirus. China then restricted beef imports from Australia, citing dumping and quarantine concerns. It also imposed an additional tariff of more than 80% on imports of Australian barley.

Early last month, China suspended imports of Australian copper, wine, coal, timber and three other items, according to press reports from the two countries. The punitive measures have dealt a serious blow to Australia, which had been sending more than 30% of its exports to China.

World Trade Organization members rolled the dice about 20 years ago when they agreed to allow communist China to join the body.   © Reuters

Following the outbreak of the coronavirus, China became more aggressive with its words and deeds, treating its adversaries to what has come to be known as "wolf warrior diplomacy."

No surprise, then, that Beijing is also wielding a wolf warrior trade policy against a considerable number of countries. In 2019, China slapped restrictions on imports from Canada, which has detained a top executive of Huawei Technologies, the sprawling telecommunications equipment maker.

China has suspended rare earth exports to Japan and fueled a boycott of South Korean-made products due to diplomatic friction. The Philippines and Norway have also been on the receiving end of Chinese retribution.

China is not the first big nation to use trade measures to apply diplomatic pressure. The U.S. and European Union have frequently imposed restrictions on authoritarian regimes, citing human rights and other concerns.

Nevertheless, China's wielding of punitive trade restrictions adds a hazardous element to this brand of international strong-arming.

Trade officials and other experts in major countries point out two risks.

First, China's punishments, which violate WTO rules, are applied extensively. Over the past 10 to 20 years, there have been more than 100 cases in which China pressured countries by threatening or implementing restrictions on trade and investment, or by stoking boycott campaigns against imported goods, according to a report compiled in September by the Australian Strategic Policy Institute.

The ASPI counted 29 cases against Europe, 20 against Australia and New Zealand, 19 against the U.S. and Canada, and 16 against East Asia.

Second, China's arbitrary sanctions have incomparably more global impact than those imposed by other major countries because China is now the biggest trading partner of more than 130 countries and regions.

China, however, stands to wound itself if it continues to apply trade sanctions against partners it feels have diplomatically slighted it.

"China misunderstands if they assess that trade sanctions will force Australia to change policies and so show Asian and European countries they need to be afraid and obey China too. Such a calculation is wrong," said Michael Shoebridge, director of the ASPI's defense, strategy and national security program. "Instead, coercion only strengthens Australia's resolve and cohesion, and many countries will be more aware of the growing risk from economic dependence on China. They will accelerate efforts to diversify export destinations and supply chains, thereby they will be able to strengthen individual and collective resiliency to China's coercive measures."

Nations are already taking the kind of action Shoebridge mentioned. Japan, the U.S. and Europe are looking to review supply chains slanted toward China. The aggressive sanctions are also causing backlashes from other countries -- and bringing them together.

The Inter-Parliamentary Alliance on China, which comprises lawmakers from 19 of the world's democratic legislatures, this month launched a campaign to buy Australian wines to demonstrate their solidarity with Australia.

And behind closed doors, the North Atlantic Treaty Organization, a military alliance between European and North American countries, and the Five Eyes, an intelligence alliance comprising the U.S., Britain, Australia, Canada and New Zealand, are studying measures to counter China, according to diplomatic sources. Senior NATO officials are making statements that take issue with China's trade policy, the sources said.

A shopper reads the label of a bottle of Australian wine in a supermarket in Hangzhou, in east China's Zhejiang Province, on Nov. 27, 2020.    © AP

For now, NATO and Five Eyes members will constantly and closely share information regarding China's tendency to use trade measures to mete out punishment. The members will also consider an option to immediately raise questions among one another when any of them comes up against a threat from China and jointly call on Beijing to stand down.

Going forward, the members are likely to discuss how Japan and India might be brought into the fold.

Besides its feud with the U.S., China is also engaging India in a border conflict, Japan in a territorial dispute and Southeast Asian nations regarding its claim to the South China Sea.

What is prompting China to pick so many fights?

Many China watchers blame internal politics, not diplomacy. As Xi plays up China as a rival to the U.S., top officials of the Chinese Communist Party, government and military compete to show their loyalty to the leader by taking increasingly aggressive international stances, China experts say.

At an intraparty meeting in April, Xi issued a mandate to create a structure that will enable China to stage strong counterattacks when subjected to foreign sanctions, according to the Nov. 1 edition of Qiushi, a political theory periodical published by the party. The structure is meant to exploit other countries' dependence on supply chains being built in China.

If Xi actually issued the order, which can only further promote the execution of wolf warrior trade sanctions, it would be difficult for aides to step back. This reveals the defectiveness and weakness of Xi's authoritarian system.

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