When the Australian Prime Minister Scott Morrison called for an independent inquiry into the Wuhan virus outbreak from its source in China, the Xi Jinping administration thought that it could coerce Canberra into submission. For the better part of this year, China has been waging an ugly trade war on the Scott Morrison government, in a bid to weaponise Australia’s dependence on the Chinese market for exporting its products.
However, Australia has is now looking to hit back and Beijing already seems rattled. The Scott Morrison government is reportedly planning to scrap a research agreement between the Victorian government and China’s Jiangsu province. Meanwhile, Beijing seems to have been intimidated by Australia’s latest plans and has labelled them an “act of revenge”.
Australia has started to think about scrapping the research agreement, after China imposed tariffs and other trade barriers on a number of Australia products such as barley, beef, lobster, timber, lamb, coal and wine. Scrapping the research programme also becomes possible because the Federal government introduced a new legislation earlier this month, which enables the Commonwealth to axe agreements with foreign powers in case they are deemed harmful.
The Victoria-Jiangsu Programme for Technology and Innovation Research and Development programme was signed in 2015 and renewed last year. It involves release of grants of up to $200,000 to Victorian companies and universities for sharing research and data. The agreement leads to Intellectual Property (IP) and new product development getting shared across the two countries.
Within Australia, there are growing apprehensions that the bilateral agreement militates against Canberra’s interests. Also, there is a growing fear that China could be using this agreement to gain an undue advantage out of Australia.
Dr Paul Monk, the former head of China analysis in Australia’s Defence Department, said, “For this deal to be getting promoted by the Chinese government, there is likely to be something we can provide that they want – otherwise they would do it themselves.” He added, “So we must ask: what [intellectual property] do we bring to the table that they are seeking?”
Actually, China gains big out of the bilateral programme. A number of Australian entities travel to the Jiangsu region for research and development in key sectors like aerospace, biotechnology and medicine under this agreement.
In fact, Australia’s reported plans to scrap the Victoria-Jiangsu agreement has already made Beijing restive. China’s State-owned newspaper China Daily has stated, “The bid to scrap the Victoria-Jiangsu Programme for Technology and Innovation R&D, which was agreed in 2015, is obviously intended as an act of revenge by Australian Prime Minister Scott Morrison for China’s probes into imports from Australia.”
The newspaper added, “To the disappointment of those who have been hoping for a turnaround in relations, the Australian government is still heading down the road of no return for bilateral relations.”
China’s loud reaction actually exposes its vulnerabilities here. Beijing, which is infamous for IP theft, might have been trying to leak Australia’s Intellectual Property through the bilateral research agreement. However, Scott Morrison government’s plans to torpedo the key pact has come as a huge shock for Beijing. Australia is looking to fire the first shot in its ongoing trade war with China, and it is likely to be a painful one for the Xi administration.
