China flexes economic muscles with exporters

Canadian farmers may feel hurt and lonely in the abuse they suffer from China’s belligerent government.

But being hit in the pocket by China, Canadian farmers share a situation that is experiencing a growing cohort of specific industries from the developed world.

“China is having disputes with a large number of countries simultaneously,” said Charles Burton, a fellow at the Macdonald-Laurier Institute.

“There are so many examples from China that it seeks to take advantage of our economic dependence on that market to achieve political purposes.”

Indeed, just in late April, China dramatically denounced a suggestion from the Australian government that it could conduct an investigation into the origins and management of the COVID-19 pandemic, and directly threatened to restrict some of the agricultural exports of Australia to China.

“The Chinese public is frustrated, shocked and disappointed with what Australia is doing now,” Chinese Ambassador to Australia Cheng Jingye told the Australian Financial Review, threatening the repercussions in three economic sectors.

“Maybe ordinary people will say‘ Why should we drink Australian wine? Eat Australian beef?

While that is not a specific threat to government action, China has previously used a network of government-friendly organizations, media and social networks within the country to generate hostility towards the nations with which it is having political disputes.

Australia, with even greater exposure to agricultural exports to the giant Chinese market than Canada, has had increasing problems with China in recent years.

That situation is shared by several Asian nations, including Japan, South Korea, Taiwan, and the countries surrounding the South China Sea.

China also has political disputes and has taken trade measures against several European nations. He has terrible relations with the Czech Republic, bad relations with Sweden, and for years he strangled his Norwegian salmon imports by handing over a Nobel Prize to a Chinese human rights activist. The dispute with Norway appears to have ended in 2019, after almost a decade of import blocking.

It is not just small and medium European countries that China is trying to pressure through trade threats. Germany is considering allowing Huawei equipment to enter its next 5G network, but most German politicians are concerned about the company’s close ties to the Chinese communist regime.

“If Germany were to make a decision that would lead to Huawei’s exclusion from the German market, there would be consequences,” Chinese Ambassador to Germany Wu Ken said in January.

“The Chinese government will not sit idly by.”

Across the Atlantic, the U.S.-China relationship continues to worsen, and U.S. actions against Chinese imports appear to moderate in late 2019, before the COVID-19 pandemic triggered further U.S. hostility. The administration of United States President Donald Trump suggested that China kept crucial information about the coronavirus hidden from foreign health officials, with some Trump officials citing the possibility that the virus escaped from a Chinese laboratory.

It is in this context that the Australian controversy has arisen.

“Concern about COVID-19 is becoming a primary focus for unusually strident statements and threats of coercion against nations that are questioning (the origin and management of COVID-19,”) said Burton.

While China has criticized any criticism by the Canadian government of its actions or behavior, it has mostly recently denounced Foreign Minister Francois-Philippe Champagne for criticizing the arrest of democracy activists in Hong Kong, Canada’s response to continued China’s antipathy has been extremely restricted, Burton said.

“Canada has been much more receptive to the Chinese regime than many other countries,” Burton said.

Burton said whether or not Canada’s approach is effective is an open question. Many countries have disputes with China, and there have been a variety of responses to their actions.

China’s outbursts from trading partners may seem emotional, but Burton said they are refined and focused on creating domestic pressure within target countries, hitting some products and avoiding others.

“China is doing this in a calculated way,” Burton said.

The root of China’s ability to use trade barriers to create political pressure on foreign countries comes from exporters in those countries who long for access to China’s giant market. That access can be withheld, even informally, as expressed by the Chinese ambassador to Australia in the current COVID-19 situation.

Burton said that means that exporters must realize that they will continue to face the risk of future political disputes.

“It appears that China is becoming bolder and more open in its responses,” Burton said.

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