“If China wants to be the world’s largest producer of cheap consumer electronics, knock yourself out. I don’t care. If, on the other hand, it’s going to be the only supplier of quantum computing, or the only supplier of 5G, I’ve got a problem.”
His comments come amid heated debate about how Australia should manage its relationships with China and the United States after their trade dispute ratcheted up this week.
Beijing responded to the Trump administration’s latest tariff threat by allowing its currency to weaken and suspending Chinese state government purchases of US agricultural goods. Meanwhile, US Secretary of State Mike Pompeo’s visit to Sydney on Sunday and his strong comments on China added to pressure on the Australian government to harden its stance on Beijing’s more assertive foreign policy.
This pressure is coming from both inside and outside the government. Liberal MP Andrew Hastie, the head of Parliament’s powerful intelligence committee, said this week Australia had been left “institutionally weak” by failing to properly comprehend Chinese President Xi Jinping’s ambitions. He likened the West’s failure to get to grips with China’s rise to France’s flawed confidence in its defences to protect itself from Nazi Germany’s invasion in 1940.
‘Economic iron curtain’
At the Asia Society briefing, Dr Parkinson said the “economic success of China is surely the single greatest thing to have happened globally over the last three decades and is to be welcomed, not resented”.
On the trade tensions, he referred to a warning made late last year by former US Treasury secretary Hank Paulson that an “economic iron curtain” was descending that could divide the world, if the US and China failed to manage their strategic differences.
“Since that speech you would have to say the curtain has descended a little further.”
Dr Parkinson said avoiding the “long winter” would require China continuing the economic reforms it started in the 1970s, and the region committing to improving existing international trade rules rather than discarding them.
“The answer to unacceptable trade practices is more effective rules, not no rules.”
However, he said the impact of the trade tensions would be felt around the world for decades.
“The fallout from those trade tensions is an increase in global uncertainty and I think you can look around the world and see that dampening economic activity everywhere. You are seeing firms hold back.”
He also warned against a US-China deal that diverted trade away from other countries like Australia.
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