Wall Street Journal: Howard [Australia's Prime Minister] Bows to Beijing

By LINCOLN WRIGHT

May 24, 2002

Fresh from independence celebrations in Dili, Australia's Prime Minister John Howard toured China this week, and the contrast between the two visits couldn't have been starker. Australia contributed blood and treasure to help East Timor break free of repression, but in Beijing human rights took a back seat to lobbying for a $13.9 billion liquefied natural gas contract.

Mr. Howard concluded his trip with a meeting with Chinese President Jiang Zemin yesterday, at which he conveyed a clear message: Business ties come first in Australia-China relations, human rights second. As Mr. Howard quipped to a group of Chinese journalists, "Better to focus on the positives and the things you have in common rather than worrying too much about the differences."
But the question must be asked: Is it beneficial for a small democracy like Australia to compromise its moral scruples so blithely for the sake of a few contracts? Or is there a better way of building trading ties that sends the right signal about human rights in Asia?

Apart from celebrating 30 years of diplomatic relations, the immediate cause of Mr. Howard's trip to China is to help an Australian consortium win a prized gas contract to supply Guangdong province with the means to generate electricity and heat homes for the next 25 years. If successful, the consortium of six companies, called Australian LNG, will supply south China with three million tons of gas a year, worth about $419 million, from the lucrative Northwest Shelf off the coast of West Australia.
The contract is fiercely competitive, which is why Mr. Howard and a host of other ministers have been lobbying the Chinese leadership so hard. At this stage, a rival bid from Indonesia's Tangguh project seems to be the front-runner, followed by Australia's and then another bid from Qatar's ExxonMobil. Yet one thing seems sure. No matter what the commercial merits of the bidders, China is unlikely to determine the winner of the pipeline contract on price alone. China wants its commercial partners to pay a pound of political flesh. Without a sign of fealty, the chances of winning are slim.

China already has pressured the Howard government not to meet the Dalai Lama. During his visit to Canberra, Mr. Tang also publicly called on Australia to punish Falun Gong [...] On the eve of Mr. Howard's China visit; Mr. Wu bluntly drew a connection between Australia's attitude toward Falun Gong, the Dalai Lama's visit and the chances of winning the gas contract. Mr. Wu told one newspaper he hoped Australia won the bid, but cautioned that bilateral relations were subject to Australia's handling of these "sensitive issues."

Such pressure has resulted in an implicit bipartisan agreement in Australian governing circles not to rock the boat, at home or overseas at the United Nations, on several issues of concern to China's Communist Party leadership. Back in August 1997, when Asia's financial crisis was threatening to wreck Australia's export markets, Mr. Howard decided on a new approach to human rights in China that made sure such issues would not be allowed to spoil trade.
Once a proud supporter of U.N. resolutions condemning China's human-rights record, Mr. Howard decided that Australia would handle the whole issue on a bilateral basis. "We think it is preferable to joining in certain types of resolutions which don't have any particular practical value," he says. Australian and Chinese officials still meet yearly to talk about human rights, but activists say it's just to defuse any tension in the relationship and keep trading ties intact.

China's vast markets and the 2008 Olympic Games are beckoning Australian exporters more than ever. Exports to China grew by 26% last year, making the country Australia's third-largest export destination after Japan and the U.S. So far, it seems, the Howard government and the opposition Labour Party have bent over backwards to accommodate China's concerns. Labour Party leader Simon Crean has even proposed that Australia should sign a new trade treaty with China, planting that nation at the centre of Australia's trading ties with Asia.

The most obvious manifestation of China's successful lobbying is the refusal of Mr. Howard, Foreign Affairs Minister Alexander Downer and Mr. Crean to meet the Dalai Lama during his nine-day visit to Australia. In March, just before Mr. Tang's visit, Australia's government also clamped down on Falun Gong demonstrators outside the Chinese embassy in Canberra. They were stopped from using loudspeakers and displaying banners, a ban that continued after Mr. Tang left Australia.

Even on security issues, the pressure for Australia to get along with China, and even improve defence ties, is growing as a result of commercial imperatives. During the 50th anniversary of the Anzus treaty between the U.S., Australia and New Zealand, U.S. Secretary of State Colin Powell announced plans for a trilateral defence forum that would include Japan, Australia and the U.S. Mr. Howard gave the plans his imprimatur, but only with the caveat that it was not meant to "contain" China.

Trade sometimes involves painful compromises, but that should not stop democracies like Australia from standing up for their fundamental values when they deal with China. If soft pedalling on human rights is the basis of one deal, then more will be required for the next. That could lead to a slippery slope that would ultimately undermine Australia's standing as a leading democracy playing a constructive role in the region.