Australia warned to tread carefully with China after South Korea fallout

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An expert on China policy warns there are lessons to be learned for Australia from China's treatment of South Korea.

Australia has been warned to tread carefully with China as South Korea tries to mend economic ties with its Asia Pacific neighbour.

South Korean President Moon Jae-In is in Beijing on a mission to normalise ties with his Chinese counterpart, Xi Jinping. 

Macquarie University's China policy expert Dr Bates Gill says there are lessons for Australia from China's treatment of South Korea.

"It's always been the case as Australia has become increasingly dependent economically - or through trade at least - increasingly trade dependent on China, that this was a threat out there that could be used against Australia at some point," Dr Gill told SBS News.

Australia could be reaching that point, having previously angered China over its measures to curb foreign influence, with the Turnbull government's announcement interpreted as being aimed at China.

Dr Gill said it was unlikely any retaliation would be as clear as a centrally generated edict.

"Sometimes I think local leaders, local businesses, local regulatory agencies believe they're doing the right thing taking up a patriotic action in response to what they know has been a national story of concern," he said.

Australia's tourism market could take a hit with Chinese visitors estimated to be worth $10 billion to the economy per year.

Dr Gill also named universities that rely on full-fee paying Chinese students as a potential target, but says any action would be at arms-length from Beijing. 

"It could be justifiably argued that the reason for the downturn in Chinese student numbers in Australia is because students began feeling unwelcome here owing to all this business about Chinese coersion and illicit activities," he said.

The Global Times newspaper published an editorial warning, saying: "The esteem with which Chinese regard certain Western countries will be downsized, as it becomes necessary for Beijing to retaliate.

"China needs to figure out tactics that can silently make Western institutions and individuals truly feel the pain."

Dr Gill claims the use of the word "silently" is significant.

"It suggests to me the possibility of some form of cyber activity, maybe something similar to what we believe the Russians have done in Europe and in the United States," he said.

Leading economist Tim Harcourt believes China has a lot more to lose by taking punitive action against Australia.

"China is very dependent on us in terms of energy and food," he said.

"Cutting South Korea off at the knees temporarily wouldn't do as much damage to China as doing the same thing to Australia.

"If they took measures against Australia in terms of trade they would be really hurting Chinese consumers and businesses more than Australian businesses."

Meanwhile South Korea's leader Mr Moon is in Beijing trying to patch-up ties with China.

"The top priority of my visit to China is on recovering mutual trust," he said.

Relations between Beijing and Seoul have encountered their own rough patch, following the US military's deployment of an anti-missile system in the South to counter the North's threats.

China sees the deployment as a threat to its own security.

But Mr Moon is attempting to quell Chinese fears the installation of the Terminal High Altitude Area Defence (THAAD) system could be used to spy on its territory.

"South Korea will be extremely careful from here on out that the THAAD system is not invasive of China's security," he said.

"South Korea has received promises from the United States multiple times regarding this."

China's retaliation against South Korean businesses through unofficial boycotts is estimated to have cost them $10 billion.

And the number of Chinese tourists visiting South Korea has almost halved. 

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