Facing China with a Third Path: The Libertarian Road

Chinese Premier Li Qiang has just concluded a four-day visit to Australia, marking the highest-level visit in seven years and widely seen as a full restoration of Sino-Australian relations. Over the past few decades, Sino-Australian relations have experienced ups and downs, primarily reflecting two distinct paths: the friendly approach of the Labor Party and the adversarial stance of the Liberal Party.

The Labor Party’s Friendly Approach

The Labor Party has historically been more accommodating towards China, often fostering closer ties and cooperation. This affinity can be attributed to ideological and historical reasons. Former Prime Minister Paul Keating, for instance, is infamously known for his pro-China stance, often criticising Western countries for their adversarial policies towards China. Kevin Rudd, another former Labor Prime Minister, who can speak Mandarin, worked tirelessly to strengthen Sino-Australian ties during his tenure and beyond. Additionally, Victoria’s ex-Premier Dan Andrews bypassed the federal government to join China’s Belt and Road Initiative at the state level, highlighting the depth of this alignment.

This historical closeness is not just about political manoeuvring but is rooted in ideological similarities. Both parties emphasise social welfare, state intervention in the economy, and a collectivist approach to governance. These shared values have facilitated a more collaborative relationship between the Australian Labor Party and the Chinese Communist Party. Notably, several former Labor politicians have been implicated in scandals involving Chinese influence, reinforcing the perception of an inherent closeness between the two.

The Liberal Party’s Adversarial Stance

In contrast, the Liberal Party has often taken a more adversarial stance towards China. Under the leadership of Scott Morrison, Sino-Australian relations reached their lowest point, characterised by trade sanctions and diplomatic tensions. The Liberal government’s pushback against Chinese influence in Australian politics, its criticism of China’s human rights record, and its calls for an independent investigation into the origins of COVID-19 exacerbated tensions.

The economic consequences of this adversarial stance were significant. China imposed tariffs and restrictions on Australian exports, including wine, coal, and barley, causing substantial economic harm, while Australia imposed anti-dumping duties. This “enemy road” approach could be described as “killing a thousand enemies at the cost of eight hundred of our own.” While it aimed to curb Chinese influence, it also inflicted self-damage, undermining Australia’s economic interests and causing strain on key industries.

The Third Path: A Principle-Based Approach

While the first path seems shameless, the second path is also mindless. A third path, rooted in libertarian principles, might be more sensible and offer a principled and pragmatic alternative. This path advocates for free trade as an essential component of a free economy, emphasising mutual benefit rather than using trade as a political weapon.

Libertarianism, influenced by the Austrian School of Economics, champions free markets, minimal government intervention, and individual liberty. As Mises put it:

“The philosophy of protectionism is a philosophy of war”

while free trade, on the other hand, makes for peace. Rothbard argued in his Ethics of Liberty:

“Economic sanctions are coercive measures that violate the principles of a free society. They harm innocent people and are ineffective in bringing about political change.” 

What’s more effective, in my opinion, is those unfree countries’ own policies. Authoritarian countries have often died because of themselves rather than external sanctions.

Recent years, marked by the COVID-19 pandemic, have highlighted the vulnerabilities of non-free economies, China in particular, which suffered due to restrictive economic and political policies. China’s growing centralised economic policies, ridiculously restrictive lockdown policies, anti-capitalism attitude, especially in the real estate market, and growing hostile international policies against a variety of countries, including Australia, have brought huge miseries which haven’t been seen for over three decades to the Chinese people.

In conclusion, while the Labor Party’s approach may appear overly accommodating and the Liberal Party’s stance overly confrontational, a libertarian path offers a balanced and principled alternative, which advocates for maintaining principled economic policies that prioritise free trade, not as a means of leverage but as a foundation for mutual benefit and economic growth. By embracing and always standing firmly on free trade, Australia can foster a relationship with China that is in the best interest of Australian businesses and the Australian people, while not compromising our independent sovereignty, democratic liberty, and economic freedom.