China is positioning itself as a champion of free trade while taking an aggressive stance against countries seen as challenging its interests, such as Australia. But this could affect China's image.
Fresh from signing a mammoth free trade deal, the Regional Comprehensive Economic Partnership (RCEP), Chinese President Xi Jinping has hailed China as a champion of free trade policies and the "forerunner in driving global growth."
Since US President Donald Trump withdrew the US from global trade agreements as part of his "America First" policy, China has positioned itself as a champion of free trade.
In a speech to Southeast Asian nations, Xi took aim at protectionism, a thinly veiled attack on the US. "Openness enables a country to move forward while seclusion holds it back," the Chinese president said.
As the largest trading partner for nearly two-thirds of the world's countries, China's free trade message has gone down well as the pandemic shatters economies around the globe, leaving nations desperate for economic impetus.
But the flip side of this free trade talk is an increasingly aggressive stance against countries perceived as challenging China's interests.
China's policy of coercive diplomacy is spearheaded by so-called Wolf Warrior diplomats. They derive their name from the Wolf Warrior action blockbuster that highlights agents of Chinese special operation forces. "Wolf Warrior" diplomacy describes offensives by Chinese diplomats to defend their country's national interests, often in confrontational ways.
Just as Xi was banging the drum of free trade, China was enacting a punishing array of protectionist measures on Australia after Canberra called for an investigation into the origin of COVID-19. On Friday (November 27), for example, Beijing imposed import taxes of up to 212.1% on Australian wine, which Australia's trade minister said would make the country's wine unsellable in China, its biggest export market.
"China is sending a message to Australia: 'We are a big country; you are a small country.' China is more assertive because it feels it is under attack. They are bullies," Fraser Howie, a China market analyst and co-author of the book Red Capitalism, told DW.
When China's president XI Jinping visited Australia in 2014, bilateral relations were on a more friendly footing
China, Australia's most important trading partner, has introduced a host of protectionist measures such as trade sanctions, investment restrictions, tourism bans and boycotts. Beijing has imposed embargoes in seven key sectors, including wine, barley, timber, coal, cotton and rock lobsters.
A whopping $6 billion in goods has been targeted. Around one-third of Australia's total exports go to China and the market is estimated to be worth €94 billion ($105 billion) in the 2018-2019 financial year.
However, crucially, the seven categories of goods blacklisted by China doesn't cover materials like iron ore or natural gas.
"The largest and nearest big country that wants Australian stuff is China. China has iron ore plans that are built to specifications to take Australian iron ore grade. This is a co-dependency situation. The Chinese want their stuff. Where will they find their beef and their iron ore?" Howie said.
China needs Australia's iron ore to keep its factories running, and its food supplies to feed its population
Earlier this month, the Chinese government created a list of 14 grievances with Australia. As well as Canberra's Huawei ban and calls for an inquiry into the origins of COVID-19, Beijing said Australia speaking out on human rights issues in Xinjiang and Hong Kong were "wanton interference" and "spearheading a crusade against China."
Kevin Carrico, a senior lecturer in Chinese Studies at Monash University in Melbourne, sees the trade tensions as almost inevitable, part and parcel of the conflict that arises when open societies become economically intertwined with a powerful but politically closed society.
"There will be many people who will argue that Australia needs to be 'practical' and yield to China's demands in order to rescue the economy. This is not, however, as 'practical' as they portray it to be. Yielding to the demands of a dictatorship only invites ever more pressure for ever more concessions," Carrico told DW. "The only practical thing to do is to clearly refuse to negotiate with a dictatorship attempting to take the Australian economy hostage," he added.
Australia is also one of the "Five Eyes" intelligence alliance, alongside the US, UK, New Zealand and Canada, which was set up in the Cold War era to share intelligence information on the Soviet Union and the Eastern Bloc. It has since shifted its focus to China and monitoring private communications worldwide. After the Five Eyes urged Beijing to reverse the disqualification of pro-democracy lawmakers from Hong Kong's de facto parliament, Beijing fired right back.
"Regardless of whether they have five eyes or 10, if they dare to harm China's national interest, then they should be wary of those eyes being poked blind," Foreign Ministry spokesperson Zhao Lijian warned.
Two Canadians living in China, Michael Kovrig and Michael Spavor, have been charged there with espionage in retaliation for the detention of Huawei executive Meng Wanzhou in Canada. Beijing subsequently also imposed restrictions on Canadian meat imports in June 2019, but these were lifted five months later after an outbreak of swine fever drove domestic pork prices unsustainably high.
When Germany looked set to exclude Huawei as a supplier of 5G wireless equipment, Ambassador Wu Ken threatened Germany with "consequences," citing the millions of vehicles German carmakers sell in China.
Fraser Howie urges Europeans to be "watching and supporting" Australia, especially because the EU is not a unified state. "Europe can be picked apart by China. Germany is the one that is most deferential to China, even though it has the goods that China wants more than any other European country. Europe should be very aware," says Howie.
Fergus Hanson at the Australian Strategic Policy Institute (ASPI) thinks China has won no friends in Australia and public opinion has "turned sharply" against the Chinese Communist Party (CCP), as it has started to act "increasingly assertively."
"While the CCP's coercive measures are concerning to parts of the business community, there is a widespread realization things are different now and the CCP is acting this way with many other countries around the world," he told DW.
The Australian business community is feeling the pain but for now is backing the government. Alister Purbrick, CEO of Tahbilk Wines believes the Australian government is right "from a sovereignty perspective."
"We can't be bullied — that is just not the Australian way — and there is no doubt that China is looking to exert more influence in the Asia and Pacific regions by a number of different methodologies," he told The Australian newspaper.
Countries are increasingly standing up to the "wolf warrior" diplomats and registering their opposition to the reeducation camps for the Muslim minority in Xinjiang province and the crackdown on freedom in Hong Kong. There are even growing calls to boycott the 2022 Winter Olympic Games in Beijing. The election of Joe Biden as president is also widely expected to see the US resume a more prominent role in global trade policy as he seeks to kickstart the world's biggest economy in a post-COVID world.
The failure to win hearts and minds in Australia and elsewhere may yet affect Beijing.