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Australia and China

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James Trapani

on 28 December 2016

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Transcript of Australia and China

Lecture Overview
Lecture Recap
Next Week
China in the World
China and Australia
Poltical and Cultural Issues
Economic Dependence
Dynastic Rule
Confucius and Confucianism
Center of World Trade
Links to Europeans
War and Decline
End of Qing Dynasty and "Warlord Period"
Nationalism and Rebuilding
Chiang and WWII
Civil War and Communist China
Two Chinas?
Maoist China 1949-1972
China joins the Western World
The Future?
Gold Rush
Anti-Chinese Sentiment
Perceptions of China
Restriction Acts
Relations to Chiang
Australia and the PRC
Cold War Dominos
The Whitlam Trip
Normalising Relations
The Current System
Calls for Democracy
Tienaman Square
Other Human Rights Issues
Australia's Views and Responses
Increase in Trade
Economic Framework
Strengthening Ties
If China Sneezes
The Future of China?
Military Threats?
Australia's Choice
Australia and China
China is emerging as one of the world's most powerful nations.
Its massive population and economy make it Australia's most significant political and economic relationship.
However, China is different to Australia.
It is an undemocratic "communist" state that has significant problems with human rights.
Today's lecture will:
-Overview of Chinese history
-Australia's historical relationship to China
-Political Issues
-Economic Issues
-The future of the relationship
- China is a large geographical area made up of several distinct geographical and ethnic groups.
- Its history is defined by the competition between these groups.
- This demonstrates its similarities to Europe.
- The key difference, however, is that the entire region was routinely ruled by one group.
- This meant there was a single state for long periods of time.
- The last dynasty - of this ancient state system - in China was the Qing - which lasted from the mid 1600s until 1912. They were from Manchuria and claimed ownership over all of China in this period.
- China is also significant for its collective learning in philosophy, mathematics and technological investments.
- The invention of paper, gunpowder, the magnetic compass.
- It also lead Europe in Engineering, Astronomy, Agriculture, Mathematics and Metallurgy.
- It is ironic that Europe used many Chinese inventions and methods to exert its superiority over China in the C19 and C20.

- This lecture will attempt to give a brief introduction into Chinese history in order to define what China is today - a question which will surely define Australia's place in the "Asian Century"
- The underlying philosophy of the dynastic period was that of Confuscionism. Like its contemporary belief systems in the middle East it sought to create an order where one was lacking. However, it is not a Religion - it is a philosophical belief system.

The Chinese Philoisopher - Confucius - lived around 550BCE (before Plato). It is basically an ethical order designed to develop respect within society.

The key pillars of Confuscious thought are: Legalist philosophy (which seeks to restrict the freedoms of the individual for the betterment of the collective) and Taoist philosophy (which focusses on luck and inheritence over social mobility). Some of these themes are still present in "Asian values".
The Portuguese explorer Jorge Alvares arrived in China in 1513.
The Portuguese and Spanish peacefully traded with China between this and the late 1600s.
The first contact between Britain and Ming China occured in 1637.
Trade began (but did not flourish) over the next century.
England did not want to trade its gold for the Chinese goods (especially tea) it desired.
In an attempt to create demand for a "British commodity" they flooded China with Opium.
When China responded the British used their superior navy assert their dominance.
- The Opium Wars (1839-1842) and (1857-1860) demonstrated that China was a second tier power.
- The Europeans used this to exert more pressure over trade.
- The 'unequal treaties' led to decreasing wealth and increasing social problems in China.
- This weakened the Qing dynasty.
- The Sino-Japanese War of 1894-1895 took all credibility from the Chinese government.
- They ceded Korea and Taipei to Japan.
- They also began losing control of the outer areas of China (including Manchuria where the Qing dynasty came from)
- The Qing dynasty ended in 1912.
- China fell into chaos. When the central government fell - regional leaders (who the west call warlords) took increased control over the country.
- By the late 1910s the forces for National unification (the Kuomintang army) had begun exerting its influence over the south.
Building Ties
- Many Chinese intellectuals were disappointed by the decline of their society to inferiority to the West.
- They began adopting European and Asian Nationalist philosophies in an attempt to rebiuld China as a truly great nation.
- The key leader in the 1910s-1920s was Dr. Sun Yat Sen (right). He reunified the nationalist forces under his "three principles philosophy". They can loosely be defined as "Nationalism, Democracy and Welfare".
- This unified China's Nationalist movement against the regional warlords - laying the framework for the wars of reunification.
- In 1921 the Communist Party of China was estasblished. It operated within the Nationalist movement for many years.
- In 1927 the leader of the Kuomintang (Chiang Kai Shek) purged the Communists initiating the long Chinese Civil War.
- The CCP were much more popular than the Kuomintang in rural China. During the Long March which followed the purges of 1927, the CCP made many friends and promises in areas of China long neglected by the central government.
- After the defeat of Japan, the Chinese re-engaged in Civil War.
- In 1949 Mao declared the People's Republic of China.
- After decades of chaos - most Chinese supported Mao.
- Most who didn't - began their exile.
- After the Civil War ended in 1949, Chiang and the Kuomintaang evacuated to the Island of Taiwan.
- They took much of the federal gold reserves with them impoverishing Mao's China.
- From Beijing, the People's Republic of China claimed ownership over all of China - including Taiwan.
- From Taipei, the Republic of China claimed ownership of all of China.
- Both were preparing for another war - with Washington supplying Chiang's army the resources to eventually invade China.
- However, with the advent of the Korean War and Russian nuclear capabilities the US chose the stalemate option.
- Between 1949-1973 the world recognised the Chiang's China - meaning Mao's government existed in isolation from the Western World.
- Maoist China was quite brutal. He emphasised national development over human rights in an attempt to provide the most resources to the most people in China.
- My Professor of Chinese History, Dr Edmund Fung stated that "Mao wold have been a great leader - if he died in 1949" (paraphrased from lecture notes).
- China only had minimal trade with the Eastern bloc - forcing it to be self-sufficient (as it was prior to European contact).
- This meant harsh corrections in the economy and the outlawing of the narcotics trade.
- Mao also sought to eradicate the "four olds" in China through the Cultural Revolution of the 1960s.
- Ironically, Mao's commitment to the philosophy of the Russian leader Lenin led China to split with the USSR in the Cold War.
- Mao constantly accused Khrushchev and Brezhnev of weakness in their struggle against the US.
- Tensions finally erupted in 1969 with the Sino-Soviet war over disputed territory to the north of China.
- When the US learnt of this they sought to drive the two Communist powers apart.
- First Kissenger, then Nixon in 1972 travel to China to decrease Cold War tensions.
From 1971, China was invited to become part of the Western World.
- In 1971 the PRC replaced the ROC in the UN and the UN Security Council.
- In 1976 Mao died and the corrupt "Gang of Four" were arrested allowing Deng Xiaoping to become president.
- Deng bring widespread reforms which bolster foreign trade.
- In 1982 China adopts a more Western constitution with formal leadership processes.
- China was in no position to fight the Japanese in WWII.
- Chiang was still fighting the regional warlords when Japan invaded Manchuria in 1931.
- Even though he had greater control when the war began in 1937 - his army was too weak and he was more focused on destroying Communists and Communist supporters than fighting the Japanese.
- This failure directly contributed to increased support for the Communists who ably fought and stopped the Japanese army in Central China.
- The blowing up of the Yellow River dam in June 1938 - costing the lives of 500,000 Chinese farmers also contributed to his unpopularity after the war.
We will cover the final case study of the unit - Japan.
We will examine how the biggest threat to our security became our only political and cultural ally in the Asian region between 1945 and the late 1990s.
Japan is Australia's closest ally in Asia
- next week's lecture will explore the process which made that possible
Australia has only had formal relations to the CCP since 1973.
However, our relations to China and the Chinese population are much older than that.
This section will briefly examine the historical ties between Australia and China before turning to the current relationship.
- Chinese arrived in Australian colonies between 1848-1851. Discovery of gold accelerated immigration.
- In exchange for passage money, the majority worked on the goldfields until their debt was paid off. Most of the ‘sojourners’ eventually returned to China.
- NSW: 61,245 arrived between 1856-1889; 31,850 departed in same period.
- Victoria: 40,721 arrived between 1852-1889; 36,049 departed in same period.
- By 1861, the Chinese (predominantly male) represented 3.3 per cent of the Australian population. Percentage dropped to 1.7% in 1871 and 1881; 1.1% in 1891.

Source; James Jupp The Australian people : an encyclopedia of the nation, its people and their origins, Cambridge UP, 2001, 198-99.

“How far is it desirable to receive on such terms a godless race, believed to be both physically and intellectually our inferiors, who by reason of their barbarous instincts and traditions are incapacitated from taking any part in a system of government only adapted to communities in an advanced stage of civilisation, and whose standard of morality is at variance with that of any Christian nation”.
“....told also of the mildness and equity of our laws, of the protection afforded to all within their pale, and how we had thrown open our goldfields to all comers, without distinction of nation or colour, The effect of these tales has been to attract shipload after shipload of semi-barbarians to New South Wales, intending to seek gold and gold only and to return to their own country as soon as they had obtained sufficient to satisfy their cravings”.
The Sydney Morning Herald, 19 March 1861: 8

Fears generated by:
1)Australia’s isolation from other Western countries.
2)Limited British presence (military bases) in Pacific region.
3)Australia’s proximity to ‘over-populated’ Asia.
4)Economic competition of migrants from Asia.
5)Attraction of Australia’s land and resources.
Acts aimed at restricting the influx of Chinese into N.S.W. were passed in 1881 and 1887. In 1898 another restrictive law was passed, which was aimed at excluding all non-Europeans. Similar legislation was enacted in other Australian colonies. The Federal Immigration Restriction Act 1901 preserved the policy of a ‘White Australia’.

- Australia did not have formal relations with China prior to WWII.
- The British Empire and the US were hostile to Chinese Nationalism in the 1920s as they sought to protect their investments.
- However, the emergence of a greater threat in Japan quickly made Chiang an important ally.
- The US sought to keep China in the war through supplying Chiang's army by air via India.
- The war ostensibly made Chiang an ally.
- After the War, the US remained loyal to Chiang - hence so did Australia.
- We recognised the ROC as the government of China from 1945 until 1971
- Australia was hostile towards Communism throughout the early Cold War.
- We joined the Western Allies against the Communist world system and were therefore an enemy of China from 1949 until the 1970s.
- Tensions between China and the West made War likely and Australia viewed Mao as the regional aggressor.
- China was Australia's physical enemy in Korea and its ideological enemy in Vietnam.
- The West believed that the Soviet sphere was intent on world domination and that the Asian countries would fall like COld War Dominoes.
- Hence, China was seen as Australia's greatest enemy in this time period.
"The establishment of diplomatic relations with the People's Republic of China was the end of a long journey for Prime Minister Gough Whitlam. It was the culmination of decades of advocacy and persuasion. It marked a profound shift in Australia's attitude toward China - a shift that Whitlam's own bold decision to visit China as Opposition Leader had helped bring about". - Whitlam Institute
- Initiation of "One-China" policy.
- Despite this we still oppose threats of violance against Taiwan.
- Chinese Economic Reforms under Deng Xiaoping
- Australia has been geographically fortunate due to China's thirst for natural resources.
- By the late 1980s China was emerging as a major economic ally.
- The mining boom which is the source of Australian prosperity in the 21st century is almost exclusively the result of Chinese exports.
1) Civil Liberties
-Imprisonment and execution

2) Regional Oppression
-Hong Kong, Macau SARs

3) One-Child Policy
Ross Terrill, a visiting senior fellow at the Australia Strategic Policy Institute, and based at Harvard University in the US for most of the past 50 years, says: "We can be economically open to China and still speak up for Australian values. I know some people think there is a contradiction there, but I think we have to do both. We should welcome the trade and investment with China but should never give the impression we are packing our values away in a trunk - China wouldn't respect us for that."
Maturing relationship during the Hawke-Keating years (1983-1996) and beyond.
Closer cooperation in economic, commercial, agricultural, educational and other fields.
Government-to-government links continue to grow (participation in G20, APEC; trade missions; ministerial visits).
Largely economic and commercial links; not a political, military or strategic partnership.
- China is a one party dictatorship.
- The CCP makes all of the political decisions in China.
- However, it has almost 88 million members who have a level of autonomy.
- Despite recent changes, China still promotes rapid collective development over individual rights.
- The current Chinese system is a hybrid of state run-Communism and free-market capitalism.
- The break down of economic Communism in the 1980s has led to an emergence of both an oligarchic class of billionaires and very large middle class.
- At the other end, the goverment supports the still large peasantry through health, education, and tax exemption.
- State control of the economy allows the government to avoid economic catastrophies by keeping large reserves of capital.
- The cost is a lack of democracy and failures of human rights.
- Mao's death was seen by many as the end of the CCP.
- The emergence of a pro-democracy movement in the late 1970s was strengthening by the late 1980s.
- The fall of the "iron-curtain" in Eastern Europe in 1989 was again seen as a motivator for democracy in Communist China.
- This all came to a head in April-June 1989 when the pro-democracy demonstrations converged upon Tienaman Square.
- Estimates claim at least 500,000 protestors in the square for those months.
- As a nation we tend to focus on the economic implications of the relationship.
- However, China is a complicated country:
- They are undemocratic
- They have issues with human rights
- They have a fundamentally different value system to Australia.
One Australian journalist wrote:

For all the talk of becoming part of Asia, the royal wedding hype shows our sentimental links to the old colonial power are as strong as ever. Economically, however, our relationship with the Brits was long ago knocked off its perch. Not since the 1960s - when tens of thousands of Australians thought nothing of lining the streets to catch a glimpse of the Queen - has Britain been the top destination for Australian goods.

Instead, as we're constantly reminded, China's thirst for our resources now drives an enormous share of Australia's growth. In fact, our economy hasn't been so dependent on one partner since Britain dominated trade and investment in the first half of last century. But when does a booming trade relationship become unhealthy dependence?
- From 1981 China was open to foreign investment,
- Economic relations central to bilateral relations. China became Australia’s largest trading partner in May 2007.
- Australian mineral resources are as essential to China’s economic growth in the 2000s as they were to Japan’s from the 1960s.
- In 2001 China joined the World Trade Organisation (WTO).
- In 2003 China signed a trade treaty with Australia (The Trade and Economic Framework or TEF).
- In 2005 China agreed to work towards a Free Trade Agreement; negotiations ongoing.

Economic fact sheet DFAT 2014

- Australia exports A$90B of goods to China. This is 33.9% of all Australian exports but only 4.6% of Chinese imports.
(Decreased to A$81B in 2015 still 32% due to contraction of economy)

Most of the goods are raw materials including ores coal and gold.

Australia imports A$52B of goods from China. This is 20.6% of all Australian imports but only 1.7% of Chinese exports.
(Increased to A$57B despite global contraction - now 21.1% of imports)

Most of the goods are manufactured including clothing, computers and furniture.
Australia is completely dependent on trade with China. It accounts for over 1/3 of all exports and over 1/5 of all imports.

Overall, trade with China is good. We have a large BoP surplus with China which floats our currency.

Their consistent growth maintained our economy through the 2008 GFC.

However, their slowdown will impact our growth in the near future.
- China is emerging as the world's largest economic power.
- It also has the second largest military expenditure (and is secretive on this matter).
- Hence, the rise of China in the Aisan century is both:
- An OPPORTUNITY for the Australian economy; and
- A THREAT to the US balance of power in East Asia
China sees itself as a regional leader.
This creates problems between China and its neighbours.
Some major areas of conflict between China and the West include:
1) North Korea
2) Taiwan and the One China Policy
3) Sovereignty in the South China Sea.
4) Chinese investment in the developing world.
5) China's economic and political alliances with Moscow and Tehran
ANU Professor Hugh White wrote in the age in 2015,

After the Cold War, people believed the inner circle of powerful states would be harmonious, because they would all accept the position of the US at the centre of the circle as the sole and unchallengeable leader of the international order. Europe, Japan, Russia, China – all would be content to work within the rules as set by the US, because that would allow them, as well as the US, to stay safe and grow rich. This was the image of a unipolar world in a new American Century.

Neither Russia nor China is strong enough to challenge the US globally, but each has shown the strength and the will to contest US leadership in their own regions. This has brought a return of history with a vengeance. We have seen a return to the old-fashion great-power rivalry of earlier eras in Eastern Europe, as Russia contests the post-Cold-War redrawing of its western borders, and in doing so challenges the European regional order.

In Asia, as has been so clear this year, China's assertive territorial moves in the South China Sea have likewise challenged the regional order based on US maritime supremacy. The US global leadership that was at the heart of the new world order is thus now actively contested in the world's two most important regions.

It's difficult to know what will precisely happen in the 21st century.
However there are some important trends to observe:
- Per Capita income has grown to US$11,850 per annum
- The population growth as slown to 0.5%
- Economic growth is still 6.9% as of July 2015.
This raises important questions:
- Will China become the global power?
- Will China become more democratic?
- Will they have more influence over Australia?
- Will all of these things lead to conflict?
- How will this effect Australia's place in the world?
- China is Australia's most important economic ally.
- At the same time, China is viewed as the biggest threat to the US conception of regional leadership.
- Australia's relationship with the PRC only dates back to Whitlam's visit to China.
- However, since then Australian leaders have emphasised the importance of China.
- Now most Australians accept the importance of China.
- We cannot fully predict China's trajectory in the 21st century.
- However, by cautiously viewing China as an opportunity Australia is ideally positioned in the Asian century.
Revision concept: "Explain the problems of being economically reliant on a country that Australia perceives as a security threat".
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Revision concept: "Explain the problems of being economically dependent on a country that Australia perceives as a security threat".
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