Can Australia stop the Chinese government’s economic coercion against our government and businesses? Yes.

All it would take is for Australian political leaders and parliaments to align our national policies, laws and directions with those of the Chinese government. Shutting up when we have differences and making decisions aligned with Beijing’s acts, wishes and decisions would be the most business-friendly China policy for Australia and every other country to adopt.

That’s pretty much what a set of interests and voices in Australia is calling for when it talks of ‘resetting the relationship’.

But it’s also very difficult. Unavoidable differences in national interests are becoming more stark as China’s national power grows and as the Chinese Communist Party uses that power more coercively domestically and internationally.

China’s aggressive expansion of its boundaries through forcible seizure of South China Sea landforms and the coercive patrolling of the maritime area within its large ‘nine-dash line’ claim is one example.

In Australia, Chinese foreign interference has led to new laws and seen cyber hacking of our parliament and political parties. And now, the Chinese ambassador’s threats of economic coercion have been followed by actual coercion disguised as arcane technical difficulties around our barley and beef exports.

The pressure is intended to force policy change in Australia—to stop Australia building international support for an inquiry into the pandemic’s causes.

Economic pressure on industries like barley and beef doesn’t just make a direct point to our political leaders about the consequences of acting against the Chinese government’s interests; it creates pressure within Australia on those leaders. Hence the free advice that former politicians and business types are giving the government.

Let’s remember what this latest bout of coercion is about. The pandemic started in China, according to the World Health Organization, and has now infected some 4.4 million people, killed more than 300,000 worldwide and caused what looks like a global depression. Australia’s prime minister has called for a credible international inquiry into how the pandemic started and what was done, and not done, to prevent its spread.

So, 80 million people don’t see a credible international inquiry as in their interest—because they’re members of the CCP. Another 7.7 billion occupants of planet earth do want to know how this pandemic happened and how we can prevent future ones.

A credible inquiry will detail the actions of Chinese government officials, leaders and authorities in the early days of the pandemic that repressed information and prevented early international action with and in China that may have prevented the pandemic or lessened its impact.

This is a radioactive issue for the Chinese government domestically, because it cuts to the heart of its capacity to govern in the interests of the people rather than itself. And it’s a radioactive issue internationally because a credible inquiry would reflect on the Chinese government’s trustworthiness and competence.

It would also deflate the misinformation campaign China is waging to obscure the pandemic’s causes and virus’s origin. The stakes are enormous for the Chinese government—which explains its blunt economic coercion and fiery statements.

For Australia, one easy answer would be to stop pushing for an inquiry and leave it to others to prosecute. But making it somebody else’s problem is exactly what the Chinese government wants. If Australia stops building support for the inquiry, the lesson to others is clear: don’t be the first to speak up against Chinese acts that are against your interests.

It would also show that coercion works, and all bullies love it when their behaviour brings rewards. The result is not less bullying.

Australia taking the lead on key global issues matters. The role of 5G technology in national security and economic prosperity is an example. Australia’s carefully explained decision to exclude high-risk vendors from building our 5G network sparked a wave of deep international consideration. What we do matters—and the Chinese government knows this.

And we are not alone. Many nations are dealing with a coercive, powerful Chinese government that uses its economic weight to pressure them, all because they’ve acted in their national interests. Norway suffered Chinese economic coercion over the Nobel prize that affected its smoked salmon exports. South Korea suffered boycotts of consumer goods when it installed a US missile defence system for its own security against North Korea. Japan faced down Chinese government threats on critical mineral exports. And we’ve seen testing of Australian thermal coal exports for radiation (!) as one of the ‘technical difficulties’ coinciding with Chinese government displeasure.

Even the US National Basketball Association and the world’s airlines have been subjected to coercion, in the NBA’s case because an official had the nerve to support pro-democracy protesters in Hong Kong. The airlines incurred disfavour over their naming of Taiwan on flight boards.

It’s not tone or management of the relationship that’s causing Chinese coercion. It’s a clash of interests and values. Until Australia and other countries stop being democracies, stop thinking that freedom of speech and human rights are important, and stop taking decisions in the interests of our own sovereignty and security, we will bump into Chinese government interests and actions.

As Chinese government aggression increases, the business risk for all companies trading with China is growing. The pandemic is an example, but it has really just highlighted a problem that was growing before it.

Counterintuitively, it’s a great time for Chinese authorities to wield the economic coercion weapon. Every government and company is anxious about its economic viability post-Covid-19, and every part of the global economy is depressed because of it. So, each sale and market becomes more important, and threats become more powerful.

And Chinese consumer demand is depressed because, despite the hype, China is not back to business as normal. So, threats to reduce trade in multiple commodities are free gifts for the Chinese government. Chinese demand for Australian beef and barley is likely to fall anyway because of deadened consumer demand. Why not pretend the pain inflicted on our industries is a result of the clash between our governments?

Let’s keep calm and stay clear and simple on what our interests are and why decisions are being taken and directions pursued. Dealing with each issue on technical grounds while realising it’s part of a bigger picture is smart, and that’s what the government seems to be doing. We also need to remind ourselves that cutting trade with Australia inflicts pain on the Chinese economy, and that’s not a simple calculation for the regime.

The bigger remedy, though, is for all businesses—and that includes our universities—to factor increasing risk into doing business with China. This adjustment to corporate planning and strategy will do as much to diversify our economy as a set of government policies. Over time, it will reduce the leverage that the Chinese government has over our economy and our parliament, and that’s no bad thing.

New Zealand Prime Minister Jacinda Ardern’s meeting with Australia’s national cabinet was a great step towards working out how travel between our two countries might resume. Done carefully, this will be a boon to our economies and to the New Zealand and Australian people by expanding our horizons as we live with Covid-19.

Let’s think bigger, though, and start planning now to expand the trans-Tasman bubble to include the small island states of the South Pacific. A South Pacific bubble can open up possibilities for all our peoples in the post-Covid-19 world.

It turns out Pacific leaders were right in setting priorities in the 2018 Boe Declaration that expanded the concept of security to provide a greater emphasis on human, environmental and resource security.

At the time, Australia argued with its Pacific neighbours and resisted this broader framework. Looking at the issue now, in May 2020, the central role of human and environmental security is manifest. Traditional security cannot be provided without it. With Covid-19, it’s also obvious that economies and livelihoods depend on human and environmental security.

Now that Australia and New Zealand are moving out of the acute crisis phase of the pandemic, we’re both thinking about how to restart our national lives and economies in a way that, as Prime Minister Scott Morrison puts it, is ‘Covid-safe’.

That means understanding that we probably won’t be able to eradicate Covid-19. But with continued social distancing and other measures, we should be able to suppress hot spots and manage the disease in a way that doesn’t overload our health systems.

Monitoring, testing and contact tracing are the keys to being Covid-safe because, together with observing safety protocols across our societies and in businesses, schools and other institutions, they are how we’ll minimise the impact of the virus.

This approach will let us open up many things, including people movement between New Zealand and Australia. But we’ll still be unable to reopen broader international travel without risking severe coronavirus outbreaks in our two nations.

This is where the South Pacific comes in. Given where we are in managing Covid-19 in our own countries, between us, Australia and New Zealand have the capacity to expand our Covid-safe protective bubble to the smaller Pacific states. We have a ‘Covid management dividend’ available in the now excess capacity in our healthcare systems, and the South Pacific is where we should invest it.

Papua New Guinea, Fiji, the two French territories of French Polynesia and New Caledonia, and the smaller Pacific island nations have a combined population of about 11.5 million. Until treatment and management of the virus improve considerably, a population that size presents a potential problem that’s probably too big even for Australia and New Zealand’s combined capacity to deal with in a way that would let us treat the entire Pacific Islands Forum membership as an extension of the trans-Tasman bubble. That means we’ll need a separate partnership with PNG, Fiji and the two French territories.

Tuvalu, Nauru and Palau, for example, have populations the size of regional towns in New Zealand and Australia. The total population of these smaller Pacific island states is about 1.6 million. Their remoteness and the fact that their populations are scattered across isolated small islands makes suppression and management of Covid-19 in their territories feasible in ways that are simply not possible in much of the rest of the world.

Extending our health surveillance systems to each of these small Pacific island states so that they too can be Covid-safe is possible because the numbers of people involved are reasonably modest and the island states have already taken measures like closing borders to contain the virus in their own territories.

There are very few reported Covid-19 cases in the South Pacific, with only Fiji, PNG and the two French territories reporting any infections. Just as in Australia and almost every other country, however, there are probably unreported cases and asymptomatic infections.

We can expect Pacific states’ health systems and health workforces to be deeply challenged by Covid-19, even with the international donor assistance we have already seen. Left unchanged, their support systems will probably be insufficient to prevent avoidable deaths, and the resulting economic damage across the South Pacific will be high.

Australia and New Zealand can change that by investing some of our Covid management dividend in and with our Pacific partners. That’s not just health system capacity (although Samoa’s recent measles outbreak shows the power of shared capacity). Our approach must include sharing our Covid-safe roadmaps and business protocols with our Pacific partners and working with them so that we can all make our societies and economies Covid-safe. It will also involve harmonising border control and travel ban protocols.

This isn’t a risk-free proposition either for our Pacific partners or for Australia and New Zealand, given that, without a vaccine, we can only suppress and manage the virus, not eradicate it. So, we will all be testing and sampling, and monitoring and managing hot spots, to prevent broader outbreaks. And it will take resources and continued work with partners like France, the US, China, the EU, Japan, Taiwan and the World Health Organization, all of which make important contributions to health system capacity across the Pacific.

We know the risks of second and third waves of infection are significant and our approaches must be cautious as a result.

The advantages to our peoples and economies are obvious and larger, however. Freedom of movement is something we took for granted before the pandemic, and it’s now something we value much more highly. We also now understand the degree to which it underpins many livelihoods across the region.

Re-establishing the movement of people between Australia, New Zealand and the smaller Pacific island states will reduce the cabin fever we’re all experiencing by opening up tourism and people-based trade. It will also open up international sport and art exchanges and potentially also labour mobility. This strategy would also lay out a path to restarting the cruise business, an industry that brings vital tourism revenue to many of our neighbours.

Australia, New Zealand and the broader Pacific family can be a model for the international community in re-establishing people-to-people connections in the post-pandemic world.

There is nowhere else on the globe that has such an advantageous set of circumstances as Oceania for reopening our borders and economies in the Covid-safe way our health environment requires. So, let’s use our geography and the strength of our governmental, business and personal links to help get the Pacific family together again.

In an open letter to Prime Minister Scott Morrison on 19 April, more than 200 economists rejected commentators’ calls for a rapid return to work and labelled the notion of a ‘trade-off’ between public health and the economy a ‘false distinction’. They said that while the measures adopted to contain the spread of Covid-19 had caused economic damage, those negative effects were far outweighed by the lives saved.

Their charge that this is a false distinction is correct, but it needs further examination. To someone from a poor country, people on moral high horses can appear to be so far from the ground that they can no longer see reality. There are different policy pathways to saving lives while allowing them to be lived in dignity.

In India, a 12-year-old girl, Jamlo Madkam, was working the fields far from home when, with characteristic lack of advance preparation to manage and ameliorate the harsh consequences, Prime Minister Narendra Modi imposed a stringent lockdown at just four hours’ notice. For three days Jamlo walked through thick forests to reach her village 100 kilometres away, but muscle fatigue, hunger and dehydration claimed her just 11 kilometres short of her home. Might a more flexible official response have saved that child?

As of 4 May, India’s Covid-19 death toll was 1,566 and confirmed cases were at 46,437 (though those figures may be understated.) UN estimates show that more than 800,000 Indian infants died in 2019, a mortality rate of 3%. Nearly 1 million children under the age of 5 years died, an even higher mortality rate of 3.7%. Those figures are 10 times higher than the infant and child mortality rates in Australasia. Most of these Indian children died from preventable causes—nutritional deficiencies, lack of sanitation and lack of access to healthcare.

Oxfam has warned that the Covid-19 pandemic could push an extra half billion people into poverty, and the UN estimated in mid-April that the global economic downturn could cause hundreds of thousands of additional child deaths in 2020.

Jayant Menon, a visiting fellow at the ISEAS–Yusof Ishak Institute in Singapore, has raised the need to flatten the ‘misery curve’ in poor countries. The inflection point for the virus curve is when the health system is overwhelmed. Menon says that the analogous point on the misery curve is when the harm caused by the curtailment measures starts impinging on health or survival.

Both curves must be kept below their tipping points—but in poor countries, misery has outpaced data. Because both curves are highly sensitive to rapid changes in a highly dynamic environment, policy measures must be adjusted as circumstances evolve.

The signatories on the letter to Australia’s prime minister are concerned experts engaging in a vital public debate about saving lives even at some cost to the economy.

Some political heavyweights in the UK are also talking the language of trade-offs. Scotland’s First Minister Nicola Sturgeon has called for a ‘better balance’ between tackling the disease and protecting the economy. Former Chancellor George Osborne agrees, urging an open discussion about the hard trade-offs that may be needed in a nation that will be living with the virus for the foreseeable future.

Multiple reports have documented the immediate and likely long-term economic harm caused by lockdowns. The World Trade Organization warns of dramatic decelerations and contractions in GDP and trade, with a resulting ballooning of job losses and fall in incomes. The IMF estimates that the global economy will shed around $9 trillion in 2020. World output will contract by 3%, hitting both advanced and emerging economies and sparking steep rises in unemployment, debt and bankruptcies.

For this pain to be justified, lockdowns must be effective in saving lives in big numbers. Conversely, if health gains are negligible but economic, social and even healthcare costs are high, the economists are right, but for the opposite reason to what they meant.

The onus is on the proponents of lockdowns to prove the case for the extensive cessation of economic activities, suspension of individual freedoms and mass house arrest of entire populations.

As Sweden’s chief epidemiologist Anders Tegnell has observed, shutting down and locking down have no ‘historical scientific basis’; the sole basis for such tough love is epidemiological modelling.

Tegnell told the BBC on 24 April that Sweden was better placed than most European countries to face a second wave of the outbreak. The strategic goal was to slow the progression of the disease so the country’s healthcare system didn’t become overwhelmed. Between 15% and 20% of the population is estimated to have become immune, which is enough to slow and control the spread of the disease further. Regarding Sweden’s high death toll relative to its Nordic neighbours, he noted that ‘as many as 50% of deaths had come in care homes for the elderly, which have banned visitors’, so it’s ‘hard to know how a lockdown would have stopped that’.

John Lee, a retired professor of pathology and consultant pathologist with the UK National Health Service, is sceptical about the effectiveness of lockdowns in limiting the spread of the virus and says ‘there isn’t any direct evidence that what we are doing is actually affecting the peak’.

John Ioannidis, a professor at Stanford University’s School of Medicine, holds multiple appointments in statistics, biomedical data, health research and policy and is ranked among the world’s 100 most-cited scientists on Google Scholar. He calls the existing data on coronavirus infections ‘utterly unreliable’ and dismisses much of the early Covid-19 epidemiological modelling, which forecast a death toll of 500,000 in the UK, over 2 million in the US and 40 million globally, as ‘speculation and science fiction’ feeding a ‘mob mentality’.

Viruses may be highly infectious or highly lethal, but rarely are they both. In large-scale community tests, a Stanford study of 3,200 people in California showed the number of infections to be 50 to 85 times higher than the number of confirmed cases, and a study by Gangelt in Germany showed an infection fatality rate of 0.37% rather than the modelled 0.9%.

These studies indicate that Covid-19 spread earlier and much further than was initially imagined, which suggests that it is correspondingly less deadly.

There’s a growing body of evidence that lockdowns are ineffective. Carl Heneghan, professor of evidence-based medicine at Oxford, argues that UK infections peaked a week before the lockdown was imposed on 23 March.

Lyman Stone concludes that measures that work include closing schools, restricting travel, prohibiting gatherings of more than 50 or 100 people, quarantining people who test positive, and wearing face-masks in public—but not lockdowns. He compared daily deaths in selected European locked down countries from all causes for the same February–April period in 2019 and this year. In all cases, death spikes had plateaued before lockdowns would have had time to show results.

Examining data from all the US states, Wilfred Reilly concludes that lockdowns do not result in lower coronavirus mortality than social-distancing measures done well. T.J. Rodgers’ study of the US found fewer deaths where shutdowns were delayed, but not to a statistically significant degree.

Scott W. Atlas, a former chief of neuroradiology at Stanford Medical Center, looked at death rates in New York, the epicentre of US infections and deaths. He found death rates of 0% for those under 18 and 0.01% for those 18 to 45 years old without underlying conditions. Of the 6,570 killed by the virus to that date, 99.2% had underlying conditions. So even older people without pre-existing conditions may not need to self-isolate.

Localised shutdowns, targeted quarantine and sheltering in place can complement more generalised border closures and social distancing—a conclusion reinforced by a new study from the National Bureau of Economic Research in the US: ‘we find that optimal policies differentially targeting risk/age groups significantly outperform optimal uniform policies and most of the gains can be realized by having stricter lockdown policies on the oldest group’.

When the renowned British economist John Maynard Keynes was asked what he did when the facts changed, he replied: ‘I change my mind. What do you do?’ I’m not sure whether Prime Minister Scott Morrison and Treasurer Josh Frydenberg have been swotting up on The general theory of employment, interest and money, but they have certainly shown an admirable willingness to dump the ruling economic orthodoxy when it no longer makes sense.

The scale of the shock to the economy, not to mention to the national psyche, of the coronavirus crisis has been immense, and so has the response from government. Ideas that would have been literally unthinkable only a few weeks ago are now the conventional wisdom. Even Keynes might have been astounded at the scale and speed of the rethinking that has occurred within government ranks and the commentariat. We’re all Keynesians now, it seems.

Academics often refer to these sorts of moments as paradigm shifts or critical junctures. A more fashionable way of describing them of late has been as ‘black swans’. Financial crises are a classic example, although their increased frequency may mean they’re not quite as surprising as they once were. The real surprise, perhaps, is that we repeatedly fail to learn the lessons they offer and use them to prepare for the next one.

The Covid-19 pandemic is an illustration of that possibility. To be fair, earlier pandemics such as SARS and Ebola left the affluent Western world largely untouched, so a degree of complacency is understandable, if clearly regrettable. We really should have known better; many people were warning that it was only a question of time before globalisation facilitated a truly global health crisis.

While the crisis may have been predictable, its impact is still shocking, and not just because of the rapidly growing global death toll. Even a geographically isolated country with a world-class health system is plainly not immune. Although the death rate in Australia has been gratifyingly low, the damage to the economy and the ‘Australian way of life’ has been profound and its impact will be long-lasting.

Indeed, it’s hard to imagine a more dramatic, direct and immediate threat to the basic economic, physical and even psychological security of Australians. Apparently rational and reasonable assumptions about economic welfare and even life expectancy have been upended. People are entitled to ask why we were so unprepared for what has arguably been the greatest threat to national security since World War II.

Part of the answer can be found in the way we think about security and the sorts of people who shape strategic policy in places such as Australia and the US. The overwhelming focus of the defence establishment remains on preparing to defend Australia from potentially hostile states or terrorists, not from the much more plausible and immediate danger posed by infectious diseases. This is not a uniquely Australian problem, of course. All over the world, governments are spending money they can’t spare on threats they are unlikely to face.

The US spends US$180 billion on counterterrorism and US$2 billion on pandemic and emerging infectious–disease programs per year, a ratio that is indefensible and that requires a ‘redefinition of national security’, according to the former US ambassador to the United Nations, Samantha Power. Closer to home, Indonesia’s limited resources would clearly be better spent on shoring up its rickety and inadequate health system than it would on upgrading its military hardware.

Much the same criticisms could be made about Australia’s defence priorities, of course. Given that Australia is about to spend more than A$80 billion on 12 new submarines, which even security specialists fear will be out of date before they’re even delivered, the long-suffering Australian taxpayer might reasonably ask, is this a sensible use of scarce resources when there are more immediate and compelling threats to our security?

That would be a good question even if there weren’t an enormous and growing black hole in the nation’s finances from Covid-19-related stimulus measures. But when there is such a black hole, one might expect that defence spending and priorities would be subject to much more rigorous scrutiny than they currently are. At the very least, advocates of increased spending to counter conventional threats ought to be expected to provide much more plausible and detailed explanations about why the usual defence priorities should prevail in rapidly changing times.

China may, indeed, seek to intimidate its neighbours, but middle powers such as Australia have little capacity to independently influence the outcome of regional, much less global, security challenges. We shouldn’t try to. Part of the justification of being in an alliance with the United States is, after all, the possibility that it will be cheaper than going it alone.

And yet, even in the US, prominent scholars are calling for a fundamental rethink of American ‘grand strategy’. Lesser geopolitical lights like Australia have even more compelling reasons to focus on mundane domestic issues rather than possible international challenges that they have little independent capacity to influence.

The pandemic is a dramatic reminder of just how exposed we remain to all kinds of security threats in a global environment. The challenge for policymakers is to ensure that we’re defending ourselves against the most important, likely and immediate.

Africa is no stranger to epidemics and public health crises. Ebola is estimated to have killed more than 11,000 people in West Africa in 2014–16, and more recently claimed over 2,000 lives in the eastern Democratic Republic of the Congo. Because of their fragile health systems, African countries were able to control this deadly disease only with the support of other governments, the World Health Organization and non-governmental organisations such as Médecins Sans Frontières.

Africa has learned the hard way that international cooperation is key to saving lives and extinguishing epidemics. But the mixed global response to the Covid-19 pandemic suggests that the world is in danger of forgetting this lesson.

Perhaps understandably, governments have focused on their domestic situation and their citizens’ needs. Many countries reacted to the outbreak by closing their borders and attempting to solve their own health crises first before helping others. But such an approach will have unintended consequences. And too many governments have paid scant attention to how their preventive measures may negatively affect poor and vulnerable countries in particular.

For example, 60 governments have imposed export restrictions on medical equipment such as ventilators and personal protective equipment—more than half since the beginning of March. Some countries are limiting exports of essential drugs for treating Covid-19 symptoms. And a growing number are banning exports of food products, including rice, wheat and eggs, in order to guarantee their own countries’ food security.

True, the World Trade Organization allows its members to impose trade restrictions such as export bans in certain limited cases. But the proliferation of such measures could negatively affect the food security of countries that depend on international trade for the bulk of their needs—including many of Africa’s least-developed economies.

Covid-19 is not just hitting trade, of course. The accelerating pandemic is exacting a shocking human and economic toll, first and foremost in terms of lost lives, but also as a result of bankruptcies, job losses and mental-health problems.

Faced with this, governments must not be frightened into short-term protectionist fixes. And that applies to African countries, too.

Crucially, policymakers must not lose sight of the opportunities presented by the African Continental Free Trade Area, which could become operational early next year. African governments have rightly invested a lot of hope in the deal. By removing tariffs and other trade barriers, the agreement can foster significant growth in trade, investment and employment throughout the continent. Such growth is urgently needed, because intra-African exports accounted for less than 17% of the continent’s total exports in 2017 (the comparable figure for Europe was 68% and for Asia, 59%.

That means African economies’ interconnectedness with the rest of the world is vital to their survival during the pandemic, and to their eventual recovery and growth. Africa therefore should be at the forefront of those calling on G20 members and other governments to abide by the letter and spirit of their WTO commitments and eschew protectionism.

Unnecessary export restrictions on food, medical equipment and essential drugs can have far-reaching consequences for the multilateral trading system and the global economy. Such measures will not only impede progress in managing the current crisis, but also compromise African countries’ longer-term efforts to tackle poverty and improve living standards.

Now more than ever, WTO members should give full effect to the WTO Doha Declaration on the TRIPS Agreement and Public Health. This declaration recognises the fragility of African countries’ health systems and promotes their access to essential medicines to deal with public health crises, including HIV/AIDS, tuberculosis, malaria and other epidemics such as Covid-19.

At the same time, African countries, for their part, should remove tariffs and simplify customs clearance procedures for imports of essential drugs and equipment. And when confronting health crises, they must make full use of information and communication technologies wherever possible, facilitate the exchange of African health experts, and involve the private sector in the same manner as during the Ebola epidemic. By working collaboratively with African economic communities and political bodies, governments will ameliorate the impact of Covid-19 and future health crises.

In a matter of a few weeks, Covid-19 has flattened the world, making everyone vulnerable and fearful, but also reminding us how interdependent we all are. Instead of wasting this crisis, the international community must now seize the opportunity to strengthen global cooperation and facilitate trade. That means rejecting protectionism, which would only prolong the pandemic and deepen the already severe global recession.