Back in 2017, early into Donald Trump’s first term as US President, China’s Communist Party leader Xi Jinping turned up to the Davos world economic forum and told the assembled corporate heavyweights and global leaders that China embraced globalisation and was continuing to ‘open up’ to foreign businesses and capital. 

Seven years on, he was at the G20 leaders meeting in Rio with the same old script.

As Australia navigates a dangerous world and fracturing globalised economy, though, one thing we should not do inadvertently or actively is join a camp that leads to greater dependency on whoever is in power in Beijing. 

Debates about Australian dependency on the US with the return of Trump are important, but they should not drown out the obvious dangers from handing Xi Jinping more power to punish and damage Australia’s economic and national security and future prosperity.

Xi lied at Davos in 2017.  Under his rule, China has pursued a ruthless path towards what Xi calls ‘dual circulation’, a geo-economic strategy that seeks to make China less dependent on other economies while making others more dependent on China.

In the years since, Xi has presided over China’s slow strangulation of foreign businesses in China. He’s provided large subsidies to grow Chinese industrial capacity to control global supply chains from renewables to semiconductors and electric vehicles.  In many ways this has been a success: Chinese EV and solar panel producers now have so much excess production capacity that they can flood other nations’ markets and undercut any opposition.  This has already destroyed much of the rest of the world’s solar panel and other renewable energy industries.  It is now threatening the future of European car companies and is part of an emerging industrial crisis in Germany affecting foundational companies like VW.

While China is still behind the curve in producing advanced semiconductors, massive government funding to local firms is helping them make less advanced chips at scale.  And China also dominates supply chains for EVs, batteries, renewables and semiconductor production.  It has virtual monopoly control of global gallium and germanium, for example, minerals used in semiconductors, renewables and military applications.  And Xi Jinping has built new laws and regulations that give his government the power to restrict supply to any companies or countries he wants to punish.

Chinese producers are being encouraged by Beijing to bail out China’s stuttering domestic economy by exporting. China’s leaders also want them to build dominant global market shares, kill foreign competition and offload excess capacity by flooding markets from the EU to Africa, South East Asia and places like Australia – any place that is open to this economic strategy provides an opportunity.

At the same time, foreign companies in China are watching their market shares fall as Beijing promotes economic nationalism, pushing Chinese consumers to show their patriotism by buying Huawei phones and Great Wall and BYD cars, instead of foreigners’ products like Apple devices and Mercedes and Volkwagens. 

The status that wealthy Chinese consumers used to get from buying high end Western companies’ products is being replaced by the rise in ‘patriotic’ status consumers get from buying their Chinese competitors’ products instead.  Huawei’s  release of a trifold smartphone is a good example: Huawei’s Chinese ‘superfans’ are angry they can’t get their hands on one because of limited supply. Meanwhile, Apple’s China sales numbers keep falling, as does BMWs, Mercedes and VWs  – VW’s profit has slumped by 60%.

So, China’s economy is not opening up to free trade under Xi.  But that hasn’t stopped him repackaging and regurgitating his 2017 Davos speech for the benefit of the G20 audience gathered in Rio last week.

Faced with a return of Donald Trump to the White House and likely very large tariffs on Chinese exports to the huge US market, Xi was again wrapping himself in the mantle of free trade and open markets, telling us all he’s on our side against Mr Trump’s protectionist stance.  And he’s lying through his teeth again, as we all know and as we knew back in 2017.

What Xi Jinping wants is to be able to pursue his highly protectionist economic strategy while everyone else opens their borders and markets for him to flood with Chinese products and lets China’s state and non-state companies buy productive assets and secure inputs China needs.  In his view, that seems more likely if the countries he wants to dominate politically and economically are beacons of free trade – particularly if we’re happy to turn a blind eye to his breathtaking hypocrisy and duplicity in pursuit of a quick buck.

This sounds an insane proposition for Xi to try to sell at the G20, but the more insane thing is that he seems to have a willing audience, at least, in form of Mr Albanese, backed by Australia’s free trade Treasury ideologues, cheered on by understandably self-interested groups like Australian lobster fishermen. 

Mr Albanese was effusive even in the carefully crafted remarks released of his chat with Xi, saying: “Let me express, as well, my appreciation for your tremendous hospitality when I visited Beijing last year, and where we have recommenced our leaders meetings….Trade is flowing more freely to the benefit of both countries and to people and businesses on both sides. We continue to explore opportunities for practical co-operation in areas of shared interest, including on our energy transition and climate change”. Who knows how gushing he was in private.

From this, Xi will see this ‘handsome boy’ who happens to be our prime minister as a willing if naive partner in advancing Chinese goals and objectives, particularly in dealing with the headwinds China is expecting from a second Trump presidency.

Since the G20, China’s ambassador to Australia, Xiao Qian, has taken up Xi’s rhetoric here in Canberra, urging Mr Albanese to “continue the good relation on momentum between our two countries and see what we can do together to promote global trade instead of compromising our respective national interest and our common interest”.

The ambassador is probably doing two things: following Xi’s line and sensing a real opportunity with a prime minister who’s in trouble domestically and searching for a political agenda. There’d be no better outcome for Beijing than Mr Albanese taking this bait now, before the US presidential transition.

But now is the worst time for Mr Albanese to announce that Australia is doubling down on ‘free trade’ and wants to grow trade with China. With the rise of industrial policy approaches from Brussels to Tokyo, New Delhi, Washington DC – and Beijing – the rest of the world has moved emphatically from free to managed trade. And China will take ruthless advantage of us if we’re silly enough to accept Treasury’s stagnant trade policy prescriptions, resulting in Australia becoming a pawn in Beijing’s economic arm wrestles with Washington. 

Seeing Mr Albanese seize now as the moment to embrace free trade on the global stage is a bit like watching someone choosing to embrace and promote Communism back in the early 1990s, just after the Berlin Wall fell and the Soviet Union disintegrated.

So, a tiny bit of historical memory shows us that Xi Jinping is not the saviour of free trade or the globalised economy.  But he is a relentless Communist autocrat with a plan to make China less dependent on others – and the rest of us dependent on what he decides, allows and wants.  Decoupling our economy from that future vision is not just wise: it’s essential for our freedom, security and success.

A version of this article was first published by Sky News.