Economic decoupling from China would be ‘act of national self-sabotage’, Labor and Liberal MPs agree

Australia would be shooting itself in the foot if it tried to untangle itself from economic reliance on China, politicians from both major parties have declared, while warning there is no end in sight to the turbulence in the relationship.

Labor MP Tim Watts cautioned on Tuesday that economic decoupling from China – an idea that is advanced by some of the most hawkish politicians in Canberra – would be “an unprecedented act of national self-sabotage”.

His Liberal colleague, the former diplomat Dave Sharma, agreed that wholesale decoupling was not a serious proposition, because China was deeply integrated into the global economy and because Australia had been a “massive beneficiary” of its growth and industrialisation.

Both MPs were to outline their views about how Australia should manage its increasingly challenging relationship with China at an event organised by the China Matters thinktank at parliament house on Tuesday morning.

But in a pair of papers published by China Matters in advance of the event, Sharma warned against any “descent into McCarthyism”, saying Australian public debate must be sophisticated enough to allow an exchange of views without people’s patriotism being called into question.

Sharma’s eight recommendations included diplomatic efforts aimed at building new coalitions to defend the liberal world order. This might take the form of institutionalising a new version of the G10 grouping and organising regular meetings of defence ministers of the Quad countries Australia, Japan, the US and India.

Watts, meanwhile, suggested that the foreign affairs department, the Treasury, defence and the intelligence agencies should provide regular background briefings on the China-Australia relationship – and Australia’s strategy – to parliamentarians, the media and state and territory governments.

Watts said Australia should build an independent foreign policy identity in southeast Asia and reverse cuts to overseas development assistance to the region.

Sharma called for the Australian government to encourage the United States to join the rebadged Trans-Pacific Partnership and support efforts to include Taiwan, too.

It comes after the former Australian trade minister Andrew Robb called for China and the US to be invited to join the TPP. Outlining the idea in an op-ed in the Australian Financial Review, Robb said: “Let’s focus our minds to positive solutions, invite cooperation, and stick to it.”