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Australia risks squandering a lucrative export – and a diplomatic opportunity


There is no larger non-democratic market than China. At Australia’s top universities they account for 60 per cent of all international enrolments, or 110,000 students. It is a massive market – worth $3.1 billion a year to the top 10 universities alone – and with many international students coming from more privileged backgrounds than average, a huge strategic opportunity to influence the potential future leaders of industry and government.

On Friday, the Business Council of Australia’s Asia Taskforce published a report that found the single greatest post-COVID-19 opportunity for the Australian economy lies in Asia. China is the only G20 economy and along with Vietnam, one of the few economies in the world currently forecast to show growth in 2020.

“Australia must maintain a comprehensive and multi-faceted economic relationship with China in a strategy which focuses on the national interest but based on the principle of “China and” rather than “China or,” the taskforce said.

“A challenge for Australia is that China has a different political system and is becoming more
assertive on the international stage as its economy grows. At the same time, China will remain our largest trading partner and a significant foreign investor in Australia, and thus a significant contributor to much of our prosperity for the foreseeable future.”

The key to harnessing that growth is people. Particularly those who understand how business operates in both China and Australia, many of whom are likely to be Chinese students who have studied here themselves.

Unfortunately, the flow-on effects of increasingly heated diplomatic rhetoric from politicians on both sides into the community is undermining that opportunity, as is a spike in discrimination against Chinese students and Chinese-Australian migrants during the coronavirus.

Researchers from Stanford University in California this week released research that found Chinese students who study in the United States are more predisposed to favour liberal democracy than their peers in China. It is not unreasonable to expect similar tendencies to appear in those heading to Australia.

But the study of more than 300 Chinese first-year undergraduate students in 62 universities across the US found once they encountered anti-Chinese discrimination, it significantly reduces their belief that political reform is desirable for China and increases their support for authoritarian rule.


“Strikingly, we find that encountering xenophobic discrimination is more likely to increase support for autocracy among students who are more predisposed against the Chinese regime and less supportive nationalistic Chinese policies,” researchers Yingjie Fan, Jennifer Pan, Zijie Shao, and Yiqing Xu found.

“Altogether, this means that xenophobic discrimination blocks and perhaps unravels the micro-foundation of the effects of education on transferring democratic values.”

Two years before the coronavirus ravaged the global economy, Australia’s former Race Discrimination Commissioner Tim Soutphommasane warned the China debate was “threatening to spill over into a general suspicion of Chinese-Australians,” Australia was “flirting with danger” and “intolerance has been emboldened”.

Asian-Australians reported almost 400 racist attacks since the beginning of April, according to a Per Capita survey.

It is jarring to be considering this now as Hong Kong goes through a violent and distressing erosion of its civil liberties driven by the very top of the Chinese Communist Party, but China thinks in decades, not years. It is likely that our engagement with our largest trading partner will have to continue in some form after its most liberal territory is suppressed.

To be sure there are valid reasons for alarm rising in the Australian community about Chinese government’s growing influence and ambitions in the region. It has waged campaigns of disinformation, attempted to manipulate Australian politics, hacked computer networks, is expanding its military reach in the Pacific and repressed, often brutally, ethnic minorities at home.

But the tenor of the conversation in Australia has now reached such a point that two of Australia’s foremost foreign policy experts were denounced by Michael Danby, a former member of the parliamentary intelligence and security committee, for briefing a Labor shadow cabinet on the need for “sensible engagement” with China.

The two experts were Allan Gyngell, a former foreign policy adviser to Paul Keating and head of the Office of Nat­ional Assessments and Dennis Richardson, the former head of ASIO and Australia’s ambassador to Washington.

A university graduation ceremony in China during the coronavirus.

A university graduation ceremony in China during the coronavirus. Credit:Getty Images

Both suggested that a rising group of claw-branded Parliamentarians known as the Wolverines, who aim to aggressively curtail China’s influence, may be counterproductive.

Danby was incensed. “It reeks of someone trying to reinforce ideological conformity,” he told The Australian.

In other words, shut down the debate, there is no room for nuance on China.

“The list of compradors to be dragged before the Committee on UnAustralian Activities over not adhering to the correct line on China is getting longer by the day!,” Richard McGregor, a senior fellow with the Lowy Institute posted on Twitter.

In the midst of all this, business is largely being cowed. Until Friday, the public has heard very little from the BCA or the Australia-China Business Council since bilateral diplomatic ties went into the freezer earlier this year. Big names such as Seven Group chairman Kerry Stokes and miner Andrew “Twiggy” Forrest go out and take the hits (with a heavy dose of self-interest) before retreating under a swell of anti-China sentiment. For every big business there are thousands of small businesses underneath that rely on China.

They cannot take part in the debate lest they are accused of reinforcing ideological conformity.

The Stanford University study suggests that while nuance is out of fashion, it might be the best chance Australia has of sending back well-informed former students to China with ideas that it may benefit from in the long term.

Those students that were not exposed to discrimination but were made aware of criticisms of the party did not tend to gravitate back towards authoritarianism.

“We find no increase in support for authoritarian rule when Chinese students encounter non-racist criticisms of China, the Chinese government, and China’s political institutions made by Americans,” the study found.

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