Where does our China problem go next?

On March 11, the same day it became clear the United States was sleepwalking into a public health catastrophe, Australian Foreign Minister Marise Payne went to Washington with an important message.

The US had just reported seven more deaths from the coronavirus, bringing the total to 38, while the country's confirmed infections had soared to well over 1000. After a star player tested positive for COVID-19, the National Basketball Association suspended its season. Sports leagues around the country followed within hours. President Donald Trump addressed the nation, announcing a ban on all travel from mainland Europe. The virus, which had emerged in a wet market in Wuhan, China, a few months before, had well and truly arrived in America.

US President Donald Trump and China’s Xi Jinping. There are two schools of thought emerging about what a post-COVID-19 world looks like. One says the balance of global power will be reshaped forever; the other says the challenges present before the crisis will only intensify in the wake of the global pandemic.Credit:AP

Over at the State Department, Payne had a meeting with US Secretary Of State Mike Pompeo. It was a credit to the US-Australia relationship that the meeting still took place amid the chaos. While Payne and Pompeo agreed Australia and the US were in for a tough time combating the global pandemic, she told her counterpart the outbreak of COVID-19 shouldn’t diminish any of the other priorities facing the two nations. Specifically, Payne said the security of the Pacific needed to remain a priority while the world combated the global pandemic.

It's a similar message that Prime Minister Scott Morrison has now impressed upon world leaders and a warning many in the Australian intelligence community fear will not be heeded. The question is now quietly echoing throughout Canberra: Do we still have the bandwidth to deal with the major geo-strategic challenges facing the Indo-Pacific? Put more crudely, where does our China problem go next?

As China's official COVID-19 curve has flattened and the virus ravages the US, there are growing fears the pandemic could bring these issues to Australia's doorstep sooner than expected. "Coronavirus doesn't remove any of those challenges," a senior national security source says. "It was an uncertain world three months ago, it's a really uncertain world now."

There are two schools of thought emerging about what a post-COVID-19 world looks like. One says this is a transformational event that will forever reshape the balance of global power. The other goes like this: all the challenges that were present before the crisis remain and will only intensify in the wake of the global pandemic.

Certainly, the virus doesn't abate any of the major flashpoints in our region, from the South China Sea to growing Chinese influence in the South Pacific. It doesn't take away from the burning questions of whether to accede to China's rise, try to maintain the US as a regional hegemon or transition to a multi-polar region where Beijing is accommodated but counterbalanced by a number of regional powers including India, Indonesia, India, Japan and Indonesia.

Brendan Taylor, professor of strategic studies at the Australian National University, puts himself in the second school of thought. He has previously defined the four Asian flashpoints most likely to erupt in violent conflict: the Korean Peninsula, the East China Sea, the South China Sea and Taiwan. Professor Taylor believes it is unlikely anything major will happen in any of the flashpoints while the world is in the midst of the COVID-19 outbreak, but rising tensions between Beijing and Washington could bring these issues to a head in the immediate aftermath.

"This crisis has significantly deepened already growing ill will between the US and China. There has thus far been little, if any, co-operation between them – of the kind that we saw during the global financial crisis, for instance – and I don't expect we will see any," Professor Taylor says.

"Instead, their strategic competition will only intensify in the aftermath of this crisis. Henry Kissinger said last year that the US and China were at the foothills of a new Cold War. With this crisis, they have unfortunately now begun their ascent up that very treacherous mountain."

Herve Lemahieu, director of the power and diplomacy program at the Lowy Institute, says a major move from Beijing in the coming months cannot be ruled out, but he is more concerned about the soft power it is exerting around the world. He says Beijing's narrative will be enticing for many countries at a time when the US has "abdicated on being a global crisis leader".

Mr Lemahieu says the Australian government "doesn't want to lose sight of the ball and they're worried the Americans are". "China will definitely seek to leverage off the fact it was the first afflicted but first to recover from the pandemic," he says. "It realises the world and the West in part is now very self-consumed and inward looking, so it will seize the moment in some sense," he says.

"The question is: Does it do so militarily across the Taiwan Strait or the South China Sea, or does it do so through global government initiatives, influencing the United Nations in terms of how the developing world addresses the virus. It is trying the soft power first and we will see how it goes.

"It's plausible China might try something unilaterally – a projection of hard power – but more likely they will be looking at how they can entrench their soft power over global institutions in the absence of the West. The geopolitical world is just as fractured and just as heated as it was before this crisis, but I think this crisis could be exploited by China. It doesn't resolve the geostrategic challenges, but it may very well distract us."

Three tumultuous weeks after Payne's Washington visit, the US now has the most confirmed cases of COVID-19 in the world. The virus could kill hundreds of thousands of Americans. None of this is to suggest the current trajectory is a fait accompli. There are growing doubts about whether China's official infection and death rates can be believed; as the country softens its restrictions over the coming weeks, a second wave of infections could force Chinese President Xi Jinping to reinstate severe lockdowns.

Meanwhile, the Chinese Communist Party's (CCP) outlandish propaganda efforts are falling flat in Europe after Chinese diplomats promoted a conspiracy theory that the US Army brought COVID-19 to China. At the same time, thousands of Chinese testing kits and medical masks have been found to be below standard or defective in Spain, Turkey and the Netherlands.

On top of this, people around the world – rightly or wrongly – still want retribution for Beijing’s delay in tackling and notifying the world of the seriousness of the outbreak. In Britain, the Tories have finally found their hawkish side on the question of China, months after allowing Chinese telecommunications giant Huawei into their 5G network against the wishes of the US and Australia. Senior cabinet minister Michael Gove this week accused Beijing of not being clear about "the nature, scale and infectiousness" of the disease in the early days of the outbreak, while former Tory party leader Iain Duncan Smith urged Prime Minister Boris Johnson to "rethink" Britain's relationship with China.

But there is also growing concern about the rhetoric coming out of Washington; Donald Trump has insisted on calling COVID-19 the "Chinese virus", while Republican senator Tom Cotton seemed to suggest the virus could be a bio-weapon created by the CCP.

In Australia, there will be a renewed debate about our reliance on China in the wake of the virus. The Morrison government is alive to the threat of Chinese ownership of key Australian assets, last week announcing it was slashing a key takeover threshold from $1.2 billion to zero to ensure any overseas bid could be blocked at its discretion. The Foreign Investment Review Board was preparing for a spate of inquiries from Chinese companies looking to take over distressed Australian assets and businesses, according to senior government sources.

Although its propaganda efforts are largely backfiring in the developed world, the bigger threat could arrive when Beijing exerts its soft power on developing nations when they are inevitably met with an outbreak of COVID-19.

A senior source within the Morrison government says Pacific island countries are front of mind in this respect. Millions of people in the developing world are now at risk from COVID-19 and our near neighbours are no different. As its first priority, the government wants to prevent a major outbreak in any of these countries. While it currently has only one confirmed case of COVID-19, Papua New Guinea – a country of more than 8 million people and a history of tribal violence and civil unrest – could be thrown into disarray.

Second, Australia needs to ensure it is there to help pick up the pieces in the South Pacific in the event of a massive outbreak. If there is a vacuum of leadership, the government is all too aware that Beijing will be there to fill it. China is already in the process of sending medical supplies to Vanuatu and French Polynesia.

John Blaxland, professor of international security and intelligence studies at the Australian National University, says the Morrison government has a clear appreciation that its Pacific "step-up" can't be allowed to fail. Professor Blaxland says Australia now needs to double down on the support it makes available to Pacific Island nations so they can effectively combat COVID-19, "not simply out of any moral sense of obligation but from a hard-nosed appreciation of Australia's strategic interests and the growing competition we face there".

He says Australia and its allies cannot rule out Beijing making a huge geo-strategic play in the South China Sea, or even Taiwan, while the world is distracted: "The prospects in my view, have ramped up in light of what we have seen in the last month," Professor Blaxland says.

"China's recent behaviour is deeply unsettling because from what I read from the rhetoric being circulated within China – it is being used as a way of beating up a strong dislike or distrust of others, particularly the West. And it is being used to bolster the Chinese Communist Party's justification for how it has handled things internally, to prop up its own stability.

"There are potential dangerous ramifications from that, particularly with a US president who is so transactional and so thin-skinned."

Mr Morrison last week told a G-20 leaders' hook-up that "our Pacific Island family must be a focus of international support". Days later, amid the first signs that Australia was starting to flatten the curve, he warned about the probability that many countries in the months ahead would "hollow out in the very worst of circumstances" and "fall into chaos".

"This will not be Australia," the Prime Minister declared.

Who will be joining us is an open question.

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