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Australia Needs to Decouple From China as ‘Second Cold War’ Looms: Expert

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

An international strategist has told a parliamentary inquiry that Australia will need to build stronger “resilience” and less “dependence” on China, as in the near future, the world will likely fracture into two major geopolitical blocs akin to the Cold War—one bloc centered around Washington and democratic nations, and the other around Beijing and Xi Jinping’s ambition for a new world order.

Speaking to the Joint Standing Committee on Foreign Affairs, Defence, and Trade on July 2, Alan Dupont, CEO of the Cognoscenti Group, said increased economic and political tensions between Washington and Beijing (particularly related to the trade war, Taiwan, and the South China Sea) would accelerate a “decoupling” of the world’s economies and see the formation of two geopolitical blocs.

Dupont, who is an expert in international affairs, said Beijing would likely lead an “authoritarian” bloc, which would include countries such as Russia, Iran, North Korea, and countries from Central Asia, the Middle East, Africa, and South America.

The other bloc would include democracies from North America, Europe, and parts of Latin America and Africa. He noted that Australia would “certainly” side with the United States.

Dupont acknowledged that trading relations would be “fluid” in what he called “the second Cold War, the one we’re going into now.” There will be “a lot of movement across the divisions” compared to the original Cold War (1947–1991), which saw trade limited to within each political bloc.

However, in the event that a split does occur, Dupont noted that it was unlikely countries could “straddle” both factions; and aligning with one side was inevitable.

“The more entrenched and rigid these divisions become, the more difficult it will be for countries to have choices and to remain in both camps.

“You will get to a point at some stage where you do have to make a strategic decision about which one you are going with.

“I think most countries do not want to be in that position, and I think that would include Australia too. We don’t want to go down that track, but the risk is that we will.”

The parliamentary committee is examining the implications of COVID-19 for Australia’s foreign affairs, defense, and trade, and is looking into issues related to supply chain vulnerabilities and international trade relations.

Australia Needs to Rectify ‘Vulnerabilities’ Amid Beijing Decoupling

Dupont called on Australia to examine vulnerabilities in its supply chains, saying: “In my view, our dependence on China for a range of critical technologies and goods has become a major security liability and must be reversed.”

Since April, Australia has been locked into a Beijing-instigated trade dispute, which has seen the Chinese Communist Party (CCP) impose 80 percent tariffs on Australian barley imports, ban beef imports from four abattoirs, and advise local Chinese power plants not to buy Australian coal.

Australian politicians have also called for greater decoupling and less reliance on the China market.

According to Dupont’s submission (pdf) to the inquiry, Beijing has already been implementing a form of decoupling.

The submission noted: “China has practised a form of decoupling for many years, by carefully avoiding dependencies, creating protective trade barriers, and positioning itself to control strategic areas of the economy—from rare earths and pharmaceuticals to advanced manufacturing.”

Further, Dupont told the committee the CCP hasn’t received “enough pushback” in response to its actions, effectively allowing it to continue unabated.

He called for Australia, in the meantime, to look seriously at its own vulnerabilities and examine how they can be rectified quickly in the short and long term.

“It’s going to require significant investment. It means that we will lose certain efficiencies, and we’re going to have to trade off loss of efficiency for the resilience that we’re going to get,” Dupont said.


The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

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Olivia Kroth
July 15, 2020

“The other bloc would include democracies from North America, Europe, …”

I do not see the USA, Canada or EU countries as democracies at all. They are just as authoritarian as the rest.

Terry R
Terry R
July 15, 2020

Dupont needs to read a recent Sputnik article on US economy. Briefly: -US budget deficit in June was a record $864 bn, up from $8 bn in June 2019 -The deficit now totals $2.7 Trillion for first 9 months of current economic cycle. -Congressional Budget Office has forecast $3.7 Trillion deficit for full year. -Last month, the CBO also warned that $16 Trillion could be shaved off US GDP over next decade. (It currently stands at $21.4 trillion) -Such US deficits have not been seen since WW2 It is risible for Dupont to suggest that Australia should hitch its economy… Read more »

Last edited 2 years ago by Terry R
July 15, 2020

Arse-tralia CANNOT ‘decouple’ from China. 45% of our trade is with China, so if the Chinese decide to say “Fuck you, Aussie”, say goodbye to our export economy and our way of life. It will take 2 – 3 YEARS to redirect that export trade to other countries, and even then, it would have to be heavily discounted. That means zero profit. Pakistan can supply iron ore to China at around the same cost as ours, plus the advantage of not having to ship it through the Mallaca Straits. Gas, LNG and oil can come from Russia, via overland pipelines… Read more »

Reply to  BobValdez
July 15, 2020

Precisely! For years now, successive Australian governments have been bending over backwards to please the US, by putting America’s interests over Australia’s own, and they have all but ruined Australia’s relationship with China. If China decided it’s had enough of their hypocrisy and snobbery, it can tank Australia’s economy in a day, and you can be sure the US won’t be there to pick up the pieces. They neither have the desire nor the ability to do so. Australia needs to wake up to the fact that Europe and the US are thousands of miles away, and it’s countries like… Read more »

John Ellis
July 15, 2020

Not a word in this war-hawk propaganda about the root cause for why the West is pursuing economical bankruptcy for it’s enemies, and no suggestion on how to give the West an attitude adjustment. For it is a command to follow the madding crowd and charge blindly into the abyss.

Reply to  John Ellis
July 15, 2020

John, the instruction of fools is folly. If the ‘west’ wants to destroy itself and disappear into it’s own self-made sewer, who are we sensible people to stop it?

July 15, 2020

What Australia needs is to stop putting the interests of the US and the UK ahead of its own. It has already done enough damage to itself by following Washington’s diktat; if it continues down this path, it will well and truly destroy its relationship with China, as well as any prospects of a bright future for itself.

Reply to  Haeul
July 16, 2020

Victoria has had a “second wave” of the virus and is serious lock-down.. Some weeks prior to this, Victoria announced its intention to go with One Bely One Road. is this “second wave” a coincidence, or is it just another conspiracy theory?

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