The Thursday edition of the state-sponsored China Daily led with an editorial defending the cancellation of a visit to Australia by the Chinese vice-foreign minister as a 'restrained and reasonable response' against a country that had challenged its national interests. Referring to Australian politicians as 'sinophobic', the editorial concluded that forces in Australia determined to keep Australia and China apart were winning, and it was up to Canberra not Beijing to rebuild the relationship. In fact, it is up to Beijing to convince its economic partners that it is willing to play by the rules.
Australia-China relations have had a bad run of late following a couple of recent diplomatic incidents. Stern Hu's arrest for espionage in July was followed by criticism of China's ongoing handling of the case and poor transparency. More recently, Beijing expressed outrage at Australia granting Rebiya Kadeer, head of the World Uygur Congress (WUC), a visa into the country.
Demonising exiled minority ethnic leaders seeking greater autonomy for their people is standard fare for authoritarian regimes looking to continually consolidate their grip on power. Beijing's anger towards countries allowing an audience with Kadeer is similar to its anger directed towards the Dalai Lama and the governments that receive him. However, the ongoing Stern Hu situation is a more revealing insight in terms of understanding the nature of modern China's 'Leninist corporate state' system and the tactics deployed by its officials to bully and intimidate other states and governments.
Since the Tiananmen protests in 1989, Beijing has gone to enormous lengths to convince the world that although its political system is authoritarian, China is becoming a truly modern state. Its leaders and diplomats want to be seen as nuanced and sophisticated rather than crude and ham-fisted. The Chinese Communist Party (CCP) has told the world that it is more interested in building wealth for its people than in accumulating power for itself. Finally, countless business delegations are sent to all corners of the world to announce that China is 'open for business' that doing business in China is becoming as predictable and transparent as in any Western nation. In short, authoritarian China is seeking win-win economic relationships that will both help China develop and offer enormous economic opportunities for foreign companies.
On all these counts, China's reputation has taken a significant setback.
First, China's overall diplomatic handling of the Stern Hu situation has been anything but nuanced and sophisticated. By initially detaining Hu on espionage charges, Beijing took the sure route to creating a diplomatic incident with Canberra as all spying charges leveled against foreign nationals necessarily become awkward affairs between states. Further, more fuel was immediately added to the fire when the accusation of spying was reiterated publically by Foreign Ministry spokesperson Qin Gang the day after the arrest, meaning that there could be no doubt the decision to detain Hu was made at the highest levels. Moreover, in defiance of protocol with friendly nations, Australian officials including Foreign Minister Stephen Smith were denied information and access to Hu, leading to the Australian Foreign Ministry surfing through Chinese state-run websites to inform the Australian public of developments. This showed-up Beijing's style of diplomacy to be unpredictable, vengeful and bullying rather than even-handed and adroit.
Second, Beijing has done much to confirm suspicions that despite its economic rise it still takes a 'Leninist' view of politics. This view is based on the centrality of politics in Chinese economy and society - meaning all entities in the country, including economic firms, can potentially be used as instruments of state power. Even though Beijing appears to have backed away from charging Hu with espionage, he has still been accused of stealing 'trade secrets' and causing grave economic loss to China. Chinese authorities have left us no doubt that they consider state-controlled firms, including their resources, not as genuinely independent entities but as a part of the arsenal of the Chinese state.
Third, the Chinese political, economic and legal environment has proven to be anything but predictable and transparent. China has shown itself not to be a 'normal' place to do business, and foreign firms should be careful if their 'win-win' relationships benefit them more than it does the Chinese state. The Chinese judicial system is explicitly under the control of CCP officials at every level. Given that senior Chinese state officials have already publically declared Hu to be guilty, the decision to ultimately convict or exonerate will be a political rather than a legal decision based on evidence according to 'rule of law'.
China is too big to ignore and presents us with enormous economic opportunities. But a rising China does not necessarily mean a friendlier one. Despite the great changes since reforms began, we should be prepared for the reality that Beijing might not always play according to the agreed rules of the relationship.