The slump in relations between China and Australia sounds like a small detail in the great picture of world affairs. But this is a corner of the canvas that merits close attention. It provided an early indication of China’s extreme sensitivity to international calls for an inquiry into the origins of Covid-19.

The deterioration in the relationship between Beijing and Canberra has been startling. Back in 2014, President Xi Jinping gave a speech to the Australian parliament hailing a new trade deal and the “vast ocean of good will between Australia and China”. But over the past year, China has imposed tariffs and other measures on Australian wine, food and coal, and Chinese officials have accused the country of racism and war crimes.

The origins of the dispute may be just as significant as the way it unfolded. Late last year, Chinese diplomats released a dossier listing 14 grievances against Australia. The gripes included blocking foreign investment deals and funding “anti-China” research. But one particular grievance stood out.

Looking at the chronology of the dispute, it is apparent that the moment China truly escalated matters was when Canberra demanded an independent inquiry into the origins of Covid-19. Scott Morrison, the Australian prime minister, even called for international experts to be given “weapons inspector-style powers” in conducting their probe. China’s ambassador to Canberra responded by warning that this perceived insult might trigger a boycott of Australian produce by Chinese consumers. Within months, the Chinese government itself had taken the initiative by imposing tariffs.

Beijing did eventually agree to a World Health Organization investigation. But the inspectors were very limited in what they could see. China’s evident desperation to control the narrative backfired — fanning the suspicions of those who believe that the country has something to hide.

In reality, a guilty conscience is not the only plausible explanation for Beijing’s response. The broader difficulty is that China’s reaction to any criticism in the outside world seems to be a toxic mix of threats, shrill rhetoric and secrecy. This applies whether the topic is Xinjiang, Taiwan or Covid-19.

This style of “wolf warrior” diplomacy is frequently counter-productive. But it is also an inevitable product of a domestic system that demands sycophancy towards President Xi — and which enforces that demand with censorship and repression. It is unrealistic to expect a system that is closed and paranoid at home to be flexible and open in its engagement with the outside world. A lot of aggressive messaging from China’s diplomats may even be primarily intended for ordinary citizens or bosses back home. The goal is to show that the Xi government is standing up for China.

When it came to investigating Covid-19, the Chinese government was also indirectly shielded by Donald Trump. The fact that the former US president is widely regarded as a liar — and had a clear political motive for blaming China for the pandemic — made it easy to dismiss all suggestions of a lab-leak in Wuhan as just another far-right conspiracy theory.

Joe Biden’s more cautious approach is paradoxically more threatening to Beijing because it carries more credibility — both at home and overseas. The US president has openly admitted that his intelligence agencies are divided about the lab-leak theory. He may be genuinely fearful of the consequences if the theory is confirmed. Even if the Biden administration attempted to limit the fallout from such a finding, there would probably be lawsuits in the American courts — demanding vast reparations from China. The White House’s efforts to maintain a delicate balance between confrontation and co-operation with China would be blown out of the water.

The stakes for China are very high. Over the past year, China has succeeded in changing the narrative over Covid-19. After initially reeling under the impact of being the first to be hit, Beijing has managed to highlight China’s success in containing the disease, compared with the high death tolls in the west.

The news of the fresh US inquiry suddenly puts Beijing on the spot again. Faced with this immensely difficult situation, China will need all the friends it can find. But the Xi administration and its wolf-warrior diplomats have spent the past year alienating potential partners. The latest blow was the European Parliament’s decision to freeze the ratification of a major investment agreement between China and the EU — following Beijing’s imposition of sanctions on European officials and institutions, which was itself a response to EU sanctions imposed over Xinjiang.

Relations with India have also taken a steady turn for the worse over the past year. For New Delhi, the turning point was China’s aggression in the Himalayas last year — which resulted in the death of troops on both sides. Senior Indian analysts believe that the pressure that Beijing was feeling over Covid-19 in the summer of 2020 may have been a background factor in the decision to escalate tensions.

There is a clear risk that if China feels newly cornered over Covid-19, it will once again respond with aggression — or with the search for some kind of international diversion. The drive to understand how the pandemic began is inevitable and necessary. It is also dangerous.

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