China and the World

Independents day?

Turnbull holds on but minor parties may complicate his China policy


Turnbull and Xi: set to meet again

At last the Australians have an outcome from their national elections, after days of vote counting and political uncertainty.

But what happens next for Canberra’s China policy, with Malcolm Turnbull heading a fragile coalition government?

Turnbull’s Liberal Party has taken a more subdued approach to the turbulent situation in the South China Sea. Perhaps that’s because the China-Australia Free Trade Agreement (ChAFTA), approved by Canberra last year, is so vital to Australia’s economic prospects. With the end of the mining boom, the great hope for ChAFTA is that the Australians will be able to sell more of their wine, agricultural goods and services to the Chinese.

The trade deal was signed by Turnbull’s government and he is known to view the relationship with China as crucial, urging Australians to focus on the trade and investment opportunities it provides. Australia’s exports to China reached $56.5 billion last year, almost a third of its total sales overseas.

The opposition Labor Party, which is more influenced by the unions and more protectionist by instinct, sees the value of stronger trade ties with China too. But it is more cautious on issues like free trade and migration, and on balance China’s leaders are likely be happier that Turnbull remains the prime minister.

What may be more of a worry for proponents of Chinese investment in Australia is the number of independents that got elected, especially in the Senate, and who will now have a much more power to thwart the government. Somewhat incredibly, the count is still ongoing for three seats in the Senate. What is certain is the governing coalition will lack a majority in this branch of the government (it has 30 out of 76 senators, and according to the Sydney Morning Herald, the crucial crossbench ‘others’ will likely hold 19 seats).

As Sam Roggeveen of the Lowy Institute observes: “We need to get used to the fact that the minor parties and independents are going to have a much bigger say over Australian policy in future.”

For example, Senator Nick Xenophon, an independent, is against Chinese acquisitions of agricultural land on any significant scale (see WiC322 for his remarks on the bid for the Kidman cattle station), while the outspoken Pauline Hanson has demanded in the past that Australia shouldn’t be “swamped by Asians”.

Hanson’s anti-immigration One Nation party holds a total of four seats in both houses, with Hanson a newly elected senator herself.

That has prompted anxiety among Australian-Asians, with the Australian Financial Review already warning that local Chinese business groups are worried too.

However, the immediate issue for Beijing’s policymakers may be geopolitical: where do the leading parties stand on the row over sovereignty in the South China Sea?

In fact, their views on major foreign policy issues are similar: both are pro-US alliance and believe in arbitration to resolve the maritime tensions.

Foreign Minister Julie Bishop said on Wednesday that “to ignore [the Hague ruling, see page 7] would be a serious international transgression, and there would be strong reputational costs [for China]”.

She added: “Australia will continue to exercise our international legal rights to freedom of navigation and overflight, and support the right of others to do so.”

In reality, the Australians have been reluctant to follow the American lead in sailing their warships close to the artificial islands that China has erected in the region.

Labor has taken a more hawkish stance, pushing for joint patrols with the US, and Stephen Conroy, its defence spokesman, has said that Australia must be seen to act, classifying China’s actions as “bullying”.

“I think that’s a highly irresponsible call at this point,” Bishop responded.

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