‘Twiggy’ Forrest and Co give the government a lesson in loyalty

Yesterday the government learnt the same lesson Malcolm Turnbull learnt in politics: sections of Australian business will back Beijing rather than Canberra in any dispute between China and Australia because of the economic benefits.

“If an Australian government quite reasonably stands its ground,” Turnbull wrote in A Bigger Picture, “and China quite unreasonably overreacts negatively (as it often does), Australian business will inevitably blame their own government.”

The government under Turnbull was perfectly happy to demonise Labor’s Sam Dastyari for his links with China while downplaying its equally extensive links with Chinese donors like Huang Xiangmo.

But it consistently turned a blind eye to its prominent friends in the business community who happily line up with Beijing rather than Australia. Liberal backbenchers like James Paterson and Andrew Hastie are left to call them out.

Kerry Stokes and Andrew Forrest are prime examples of business figures quick to take Beijing’s side.

Similar figures feature regularly in The Australian Financial Review, lecturing us about the need to pander to Beijing and perfectly exemplifying Turnbull’s observation.

In only the past few days, Mark Allison, of Elders, has criticised the criticism of China over its handling of the virus, Australian entrepreneurs in China and local investment bankers have criticised the government as “unhelpful, unproductive” and adding to “acrimony” between the countries, and the Australia-China Business Council called for a special envoy to China to repair relations because “Australia can ill afford to be collateral damage in the strategic rivalry between the United States and China”.

Yesterday the government discovered that its willingness to turn a blind eye to the pro-Beijing sympathies of business counts for nothing, when Forrest ambushed the Health Minister, Greg Hunt, by having the Chinese consul-general in Melbourne speak at a media event intended for Hunt and Forrest over testing equipment he had sourced from China.

The Chinese diplomat extolled the virtues of China’s handling of the pandemic and, under pressure, Hunt made a crucial blunder, walking back the government’s statement that COVID-19 had begun in a wet market in Wuhan.

The Beijing regime would have been delighted with this, and with Forrest for engineering it. He has served the Chinese leadership well, at the expense of the government and at the expense of a proper effort to determine the causes of the pandemic, which are crucial to preventing or more effectively dealing with future ones.

Forrest is hooked up to China like no other Australian business figure. Fortescue is the third-ranked Australian iron ore miner after RioTinto and BHP and fourth in the world when Brazil’s Vale is included.

Unlike BHP, which has significant other mining (and oil) assets, Fortescue is a pure play iron ore miner and more directly exposed to China than its peers.

For the six months to December 31, it earned a record interim profit of US$2.45 billion (A$3.66 billion at exchanges in February) and Forrest, as owner of 36% of the company, was paid more than $698 million in interim dividends. That was after he was paid $1.24 billion for the 2018-19 financial year.

So strong is Chinese demand that on Thursday in its third quarter report Fortescue said it was lifting its guidance for full year shipments slightly. At about US$80 a tonne average, it will mean about US$350 million extra for Fortescue in higher revenues.

“Fortescue is a core supplier of iron ore to China and we see strong ongoing demand for our products and anticipate a steady recovery in economic activity in that market,” its chief executive, Elizabeth Gaines, said in today’s quarterly report, summing up how much Forrest and his company depend on staying in China’s good books.

Such figures form the plutocratic arm of the China lobby, in the same way a number of former ambassadors form its diplomatic arm and a range of academics in higher education — with its enormous dependence on Chinese students — act as advocates for Beijing in that sector, all attempting to skew Australian policy in favour of China.

As Turnbull recognised with his laws aimed at shedding greater light on foreign influence, such attempts to wield influence have real implications for Australia’s sovereignty and national security.

Labor’s Anthony Byrne, deputy chair of the powerful parliamentary joint committee on intelligence and security, is concerned about the role of business in such efforts: “The difficulty with billionaire business people when they get up and try to advise on international relations is that they have a conflict of interest given their economic interests — one they never declare.

“And these business people are turning a blind eye to extraordinary human rights abuses. The Chinese government has imprisoned a million Muslims based on their faith alone. How can anyone overlook that, no matter how much money they make?”

After yesterday, the government has no reason to soft-pedal on business allies of Beijing any more.