The trial and conviction in China of Australian Stern Hu is a landmark in Australian foreign policy, and our relations with China.
Stephen Smith, a competent and effective Foreign Minister, nonetheless never said a stupider or more untrue thing than that the case would have no effect on Australia's relations with China. This is just an insult to our intelligence.
The day after, Kevin Rudd criticised the part of Hu's trial that had been held in secret, as indeed did Smith. The Chinese Foreign Ministry denounced Rudd's "irresponsible remarks".
Hu was sentenced to 10 years in prison for taking bribes and stealing commercial information. No Chinese has been charged with paying him bribes. Implicit in Smith and Rudd's remarks is that foreign companies that do business in China are left in serious doubt, with appalling commercial and legal consequences, about what constitutes stealing commercial information.
If by not affecting the relationship Smith simply means that China will continue to buy large quantities of our commodities, then obviously that's right.
The Chinese did that even when we didn't have diplomatic relations with them. If that's all a good relationship means, it doesn't mean much at all.
There are many lessons in the Hu saga. One of the first is that the Australian government ought to act with more self-respect and assertiveness towards China. The softly-softly approach got us nothing in terms of the extremely harsh sentence meted out to Hu.
The Hu conviction for stealing commercial secrets was not only passed down after court proceedings conducted in secret, it literally doesn't make any sense. Rio Tinto says it cleared itself with a thorough examination of its corporate conduct from any wrongdoing. Yet the court asserts China lost more than $165 million because of the secret information Hu transmitted to Rio.
It also beggars belief that the market price for iron ore, set in multiple negotiations with many countries, and many other big markets such as Japan, South Korea and India, was warped because of information Hu got about the Chinese negotiating position. Over the past nine months, since Hu has been in jail, the Rudd government has essentially followed a policy of appeasing China.
There were two high-profile examples. One was Rudd's secret commitment to the Chinese that neither he nor Julia Gillard would see the Dalai Lama when he visited Australia last December. The other was the decision, revealed in The Australian last week , not to send a federal minister to Taiwan in the government's first term.
Yesterday, NSW Labor Senator Steve Hutchins, the chairman of the Taiwan parliamentary friendship group and a senior backbencher, said he regretted this policy and called on the government to reverse it. "It's disappointing considering we have strong economic, cultural and trade ties with Taiwan and have had for several decades, that we haven't sent a ministerial representative there," Hutchins told me yesterday. "I will be writing to the Foreign Minister, Stephen Smith, and asking him to consider re-establishing the old practice of annual visits of an Australian minister to one of our most important trade partners."
Hutchins's sensible suggestion indicates a widespread unhappiness with the way China has
pushed Australia around in connection with the Hu matter and on other issues.
Australia is having a lot of trouble with China at the moment for one simple reason, China is trying through intimidation and bluster, to bend Australia to its will in policy areas that are rightly within the discretion of the Australian government and society. Even if Hu were guilty of accepting bribes, a very big if, the decision to prosecute him in this fashion was a strategic, political decision designed to intimidate Australia.
The ABC's decision to finally screen the documentary on Uighur activist, Rebiya Kadeer, on May 6 will undoubtedly cause a new wave of Chinese protest.
Some academics wrongly attribute the spate of recent problems to a lack of an Australian strategic plan for China. This is nonsense. We should certainly train more Mandarin speakers across society, as we should train more speakers of all Asian languages. This is not least so that Australian enterprises in China can be routinely run by Australians.
So far China has shown a strong preference for arresting Western citizens only of Chinese ethnic origin or Chinese birth, although this could one day change.
Many commentators wrongly say Australian wealth is dependent on China and therefore we must forgo our principles in order to make money. This is not true. The Chinese economy is at least as dependent on Australian commodities as we are on Chinese customers. The Chinese will buy commodities on the basis of price and reliability. The political dimension makes very little difference to that trade. And if they did go somewhere else that would chew up other suppliers and thereby leave other customers for us, of which there are many.
The bellicosity and arrogance of the Beijing government are very difficult to deal with at the moment. There is a lively debate in Western intelligence communities over whether this reflects Beijing's growing self-confidence, as the China-is-set-to-dominate-the-world school would have it or, conversely, growing Chinese apprehension about the future.
China's economy is rigidly stuck in an export-oriented model. World imports are not growing at the rate China needs and China's recent growth is mostly a function of its vast stimulus spending.
That stimulus cannot last forever and there are serious signs that the US is reconsidering its policy of taking as many exports as China can dump on it.
There are going to be a lot of headaches in Australia-China relations over the next few years. A vigorous and unapologetic defence of our interests, our values, and incidentally our citizens, would be a good place to start navigating these choppy waters.
