In this Chinese fable the chicken upsets the fox in his lair

The Powerful Right of Sovereignty, Business plus Values
a lesson for Burma

Illustration: Rocco Fazzari
By Peter Hartcher

(SMH) -Kevin Rudd studied China's most famous political prisoner, Wei Jingsheng, for his university thesis. Today Wei Jingsheng studies Kevin Rudd.

"The Chinese Government is putting the Australian Government through a trial with the arrest of Stern Hu," Wei said this week through an interpreter.

Wei has a bit of experience with the Chinese justice system - he spent 18 years in jail and now lives in exile in the US. Stern Hu, an iron ore negotiator for Rio Tinto, was arrested for allegedly stealing state secrets. So was Wei, an electrician at the Beijing Zoo at the time.

"I was locked up because I offended Deng Xiaoping [China's leader at the time]. But of course they fabricated a charge that I stole state secrets - this is the approach the Chinese Government likes to take with people to put them down."

And under the Chinese Communist Party the state can classify anything it likes as a "state secret", even the most innocuous information, at any time and on any whim.

"It's obvious now the Chinese Government is attempting to put down the Australian Government, not Stern Hu. And it's quite evident that it is putting down the Australian Government as a precedent for other governments around the world."

Wei, who is visiting Australia, embraces the metaphor in the old Chinese folk saying - kill the chicken to frighten the monkey. Australia is the chicken. Who is the monkey?

"The first monkey is Europe," targeted after Nicolas Sarkozy, president of France and chair of the European Union at the time, decided to meet the Dalai Lama last year. China reacted with the fury it always employs when heads of government recognise the exiled leader of the Tibetan campaign for autonomy from China.

"And the biggest monkey is the US."

But if China wants to make an example of someone, why choose Australia? Wei lists three reasons: "Australia has a prime minister who thinks he knows a lot about China, when actually he doesn't. Because Kevin Rudd has many relationships with China, the Chinese Government is hoping that because of these ties he will not make a strong reaction.

"Second, historically, Australia is one of the weakest countries in dealing with China. Third, Australia is just a small place."

Wei wants Australia to understand that it is engaged in a high-stakes struggle. "The chicken and the fox" - his animal metaphor for China because it is cunning and invasive - "have co-existed peacefully for years, but now the situation has changed. I think the chicken is in shock. It's still deciding whether it wants to put up a fight. If it doesn't fight it will be killed. But it may not realise it has a sharp beak and it can fight back."

Wei is wrong on these assertions. Rudd and his senior ministers set out very deliberately to change Australia's policy in dealing with China. The Rudd Government understands very well that it is the target of Chinese anger. And the Government is keenly aware that Australia has serious leverage in the relationship - it knows it has a sharp beak.

But Wei's misapprehension is quite understandable. Rudd has never articulated an overall Australian approach. The Foreign Minister, Stephen Smith, really only started to speak about the dispute openly this week.

What has changed?

John Howard had an early clash with China. It was inadvertent, not intentional. And it shook him.

As Howard took office in 1996, China was in an angry confrontation with Taiwan. The US deployed two aircraft carriers to the Taiwan Straits in a clear warning to China.

Within days Australia made a strong but lonely public statement of support for the US deployment. Four months later the Howard Government announced the ''reinvigoration'' of the Australian security alliance with the US.

"China feels that the new Government in Australia last year shifted to the US," said a leading Chinese strategic thinker, Dr Yan Xuetong, head of the Centre for China's Foreign Policy Studies, at the time.

"The Chinese interpretation was that Australia had decided to join a US policy of containing China.''

Beijing put Australia into deep diplomatic freeze for almost a year. Howard got the message. He changed China policy dramatically. This is how he phrased it in 1997: "Australia and China are very different societies, our histories have been very different, our political systems have been very different, but our relationship has always been at its very best. Each of us has fully understood the depth of those differences yet resolved to work together to capitalise on the areas of mutual benefit and common interest. It is always important in a relationship between two very different societies that you put aside those differences and you focus on those areas of common agreement."

It became a briskly "business first'' approach. Sometimes it verged on being "business only." Howard put human rights issues into a tank called a human rights dialogue, a lower-level dialogue of the deaf, from which they never emerged.

Rudd made a dramatic departure from this policy. On his first visit to China as prime minister, he addressed Chinese students in Beijing University in their own language. On Chinese soil, and very deliberately, he said the unspeakable. In April last year he said that while Australia recognised Chinese sovereignty over Tibet, "we also believe it is necessary to recognise there are significant human rights problems in Tibet".

He called for dialogue between China and the Dalai Lama to broker a long-term solution to the administration of Tibet. China protested. Rudd stood firm: ''I think this relationship is broad enough to tolerate disagreement, and on these questions I'll be putting my views forthrightly."

Instead of "business first" or "business only", Australia's policy shifted to being "business plus values". It became very clear that this was not a one-off when Smith defied China and granted a visa to the exiled Uighur activist Rebiya Kadeer.

Smith told Parliament quite forthrightly this week: "The Chinese authorities at a range of levels, including my counterpart, Foreign Minister Yang, made very strong representations to Australia about the proposed visit to Australia of Rebiya Kadeer and made representations to us that we should prevent her visit. I considered those representations and came to the conclusion that there was no basis for denying her entry to Australia."

China accuses her of being a "separatist terrorist". Smith said that "exhaustive" research showed she was not a terrorist but merely someone with whom China's government disagreed. China protested by cancelling a ministerial visit to Australia.

Smith added: "I vaguely remember the Leader of the Opposition saying to the Government some time ago that we should stand up to China. We did on the Rebiya Kadeer issue."

It was a clear message to China - we will not allow you to veto our sovereign right to set immigration policy. Smith also gave a spirited defence of the principle of freedom of speech. The chicken has decided to put up a fight.

Senior officials in the Australian Government believe that Beijing has four principal grievances against Australia at the moment. First was Rudd's speech on Tibet.

Second was the collapse of the bid by China's state-owned Chinalco to buy a bigger stake in Rio Tinto. It was a rebuff to China's ambitions, and it stung.

Stern Hu was duly arrested. Since then, Beijing has downgraded the charge against him from stealing state secrets to stealing trade secrets. That reduces the potential punishment from the death penalty to a seven-year jail term. But the vengeful anger smoulders still.

Third was Australia's defence white paper, which nominated China as potentially the biggest source of instability in the Asia-Pacific.

Fourth was the visa for Rebiya Kadeer. Taken together, it's enough for Chinese state-controlled media to denounce the "sinophobic government" of Kevin Rudd, as it did this week.

Yet despite the rage in Beijing, the economic relationship is thriving, utterly untouched by the diplomatic storm. This week's gas deal was stunning. China invited the Resources Minister, Martin Ferguson, for the ceremonial signing of the biggest business deal in Australian history, the $50 billion, 20-year deal to buy liquefied natural gas from the Gorgon field. Ferguson also met a senior Chinese minister, Zhang Ping, chairman of the National Development and Reform Commission.

At the same time, China's Commerce Minister, Chen Deming, has agreed to a new round of negotiations for a free trade agreement with Australia. In talks with the Trade Minister, Simon Crean, Chen even proposed a new formula for making progress in the stalled talks.

This is Australia's leverage. For China's successful rise it needs ever-growing quantities of food and fuel in a world that will be increasingly short of both. The chicken has a sharp beak and strong claws.

The Rudd policy of "business plus values" is drawing a lot of noise from Beijing but no real price. Not yet, at least. The next big test will be the Dalai Lama's proposed visit to Australia in November.

As for Wei Jingsheng, asked whether he planned to meet Rudd during his visit to Australia, he said: "I am close to Kevin Rudd, but given his position now I will not make trouble for him." The Dalai Lama will make trouble enough. Wei laughed: "The Dalai Lama and Rebiya Kadeer are good friends of mine. We take it in turns to visit to make trouble." The fox will not be amused. More tests lie ahead.

Peter Hartcher is the Herald's international editor.