“Maybe the ordinary people will say ‘Why should we drink Australian wine? Eat Australian beef?’,” he said.
The world’s second largest economy accounts for a quarter of all Australian exports, worth $153 billion in 2018-19 after growing at 10 per cent a year for the past five years. Iron ore and coal account for more than 25 per cent of the total value.
Food exports including beef, seafood and dairy, worth more than $12 billion a year, are also financially exposed to a deteriorating relationship.
The ambassador’s threats came on the same day a senior World Health Organisation official told the Sydney Morning Herald and The Age that Australia’s calls for an independent review had been welcomed on the global stage as it was a “great honest broker”.
They also followed revelations a European Union report about Chinese and Russian disinformation on the coronavirus was watered down after pressure from Beijing, with references to China running a “global disinformation” campaign and Chinese criticism of France’s reaction to the pandemic erased.
Prime Minister Scott Morrison and Senator Payne are using Australia’s suppression of the virus to push for an independent review of the coronavirus pandemic amid escalating tensions between the United States and China over whether COVID-19 came out of a wildlife wet market and how Communist Party leadership responded in the early days of the pandemic.
Richard McGregor, a senior fellow in China studies at the Lowy Institute, said the Chinese ambassador’s comments needed to be interpreted as a direct threat from the government: “When he talks about Chinese consumers, he really means the Chinese state. This would be a government-led boycott, not a consumer-led boycott.”
Mr McGregor said Chinese embassies were issuing similar threats around the world in countries critical of their handling of COVID-19.
“It is par for the course for the Chinese to hold out threats of some kind of boycott or trade sanctions in political disputes,” he said.
Rory Medcalf, the head of the National Security College at the Australian National University, said it was “disappointing and counterproductive” to threaten economic consequences “simply because we want to find out the origin of the global COVID-19 calamity”.
Professor Medcalf said Australia would now likely build an economy “more resilient to foreign economic coercion, even if that involves short-term difficulty”.
“A few years ago, many Australian politicians were spooked at the prospect of even the slightest hint of Chinese action against industries like tourism, education, wine and coal,” Professor Medcalf said.
“But now, through its early suppression of truth rather than the pandemic, the Chinese Party-State has inadvertently inflicted more harm on many economies than its threats of coercion ever could.”
A 2017 report by the ANU’s National Security College found perceptions of Australia’s vulnerability to Chinese economic pressure were exaggerated, as the sectors that would have the biggest impact on Australia – notably through the iron ore trade – would also cripple Beijing.
In a submission to the federal government’s inquiry into diversifying Australia’s trade, the China Policy Centre, run by former Treasury officials Yun Jiang and Adam Ni, said the concerns around market dependency in Australia are mostly around what China buys, not what China supplies.
They said China is more likely to target businesses in industries such as resources or agriculture, rather than the higher education centre, because vice-chancellors and academics do not hold as much political power as farmers or CEOs and shareholders of mining companies.
ANU chancellor Julie Bishop, the former foreign minister, said it would be “regrettable” for the international education market to “come under further pressure in these challenging times”.
Vicki Thomson, chief executive of the Group of Eight universities, said they were already facing “substantial and unanticipated challenges” across their operations.
“Our Chinese students have and are benefiting from a high quality education and research experience and we would certainly hope that China would not deny its young people this incredible opportunity,” she said.
The risks to Australia’s trading relationship follows increasingly assertive diplomatic and military positioning by Beijing. In a new report released on Monday, the Australian Strategic Policy Institute said Beijing was pushing its interests beyond the South China Sea and was now targeting geo-political ambitions in Antarctica.
The report’s authors, Anthony Bergin and Tony Press, a former director of the Australian Antarctic Division, said rising political distrust between Australia and China was impacting Antarctic Treaty System negotiations and China was leveraging its financial weight to influence scientific research.
“Given the track record Beijing has in moving rapidly on a broad front, as it has done in the South China Sea, we need to be prepared to respond to a rapid increase in the speed and scale of China’s actions in Antarctica,” they said.
“In some areas, diminishing funding for science has led to China investing in Antarctic research in Australian institutions. We are running the risk of being mendicants living on Chinese research funds.”
Environment Minister Sussan Ley said the Morrison government had made unprecedented levels of investment in Australia’s Antarctic programs after announcing a $106 million boost on Monday.
“The plan underlines Australia’s capacity to undertake science independently as well as with other nations and it highlights the global importance of the region and Australia’s leadership,” she said.
Anthony is foreign affairs and national security correspondent for The Sydney Morning Herald and The Age.
Eryk Bagshaw is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra