Australia will 'miss' China
Ken Moak
Sydney International Airport in Sydney, Australia, August 23, 2020. /Getty

Sydney International Airport in Sydney, Australia, August 23, 2020. /Getty

Editor's note: Ken Moak taught economic theory, public policy and globalization at the university level for 33 years. The article reflects the author's opinion, and not necessarily the views of CGTN.

The China-Australia relationship is arguably at its lowest point since the two countries established diplomatic ties under the former Labour Party Prime Minister Gough Whitlam in 1972. 

The relationship, that began with modest trade in commodities, expanded culminating in the two countries signing a free trade agreement in 2015. Two-way trade between the two countries reached 252 billion Australian dollars ($177.7 billion). China was also Australia's largest source of international students and tourists estimated at over 100,000 and 1.4 million in the same year respectively.

In light of these numbers, China's economic impact on "down under" cannot be understated. Indeed, China's huge 2008 stimulus package of around $580 billion was responsible for preventing the Australian economy from falling into a recession, buying significant quantities of commodities to build China's infrastructure and housing projects. Though not all Australians appreciated it, Chinese investment played a major role in the country's booming housing and resources sectors.

However, the current Prime Minister Scott Morrison openly sided with and parroted U.S. demands to contain China in the Asia Pacific: insisting on an "independent" investigation into the origin of COVID-19, sending warships to join U.S. "freedom of navigation" in South China Sea, criticizing China's National Security Law for Hong Kong, and barring Huawei from the country's 5G rollout.

The anti-Chinese tirade did not end at the geopolitical sphere but extended to racist rants. Australian politicians, media and think-tanks branding Chinese-Australian political donations as influence peddling, claiming that Chinese students were spying for the Communist Party of China and calling COVID-19 the "China flu" incited racial hatred against anyone who looked Chinese.

Unsurprisingly, the growing anti-Chinese sentiment spilled over onto the economic realm, culminating in pushing the economy into a recession for the first time in over 30 years. But the Australian government blamed its economic woes on Chinese "economic bullying."

According to the Chinese side, however, banning coal and other products from Australia had nothing to do with geopolitical conflicts, it was in line with China's pledge to reduce greenhouse gas emission and green energy policy. Chinese consumers bought less Australian products such as powder milk was their choice to boycott the goods and had nothing to do with the government. The barring of Australian meat, wine and other edibles was for safety reasons. And it was largely overt discrimination against the Chinese that discouraged many students and tourists to shun the once "lucky continent."

That said, whether China is using economic coercion or restricting business activities on scientific and environmental grounds depends on whom one talks to. Either way, the Australian government's increasingly hostile policies on China are hurting Australia more than China.

It can even be argued that the Morrison government's hostile policies on China unnecessarily placed the country "between a rock and hard place," as allying with the U.S. risks Australia's national interests but maintaining a healthy economic relationship with China would upset America.

Of course, Morrison has the right to forge a military alliance with the U.S., but there is no reason for making China an enemy. No one, including the Australian anti-Chinese crowd, seriously believes that the Asian power will be invading it anytime soon. Moreover, there is no reason for China to spy on Australia or steal its technology. China does not consider it an enemy.

Chinatown in Melbourne, Australia, March 25, 2020. /Getty

Chinatown in Melbourne, Australia, March 25, 2020. /Getty

Besides, Australia has neither the military might to threaten the former nor the technology that China wants to steal. In both cases, China is militarily stronger and technologically advanced. 

Against this background, there is no reason for Australia's "blind devotion" to America other than "kin and kith" (being the "offspring of a common mother," the UK) and the "American cousin" did help it in repelling a Japanese invasion in World War II. Australia did send troops to fight alongside Americans in the Korean, Vietnamese, Iraqi wars, albeit the conflicts had nothing to do with Australia. The wars gained it nothing except costing many Australian lives and taxpayers' money.

Morrison has right or even obligation not to sell Australian "values" (whatever they are) to the Chinese. But he should not complain about China's refusal to buy his country's products and discourage Chinese students to study in and tourists to visit Australia.

China might not "miss" Australia because it could buy the resources that Australia sold it from other countries. Indeed, other resource-rich economies, including America, did benefit from the sinking China-Australia trade relationship. Ironically, according to the U.S. Department of Commerce, China was buying more U.S. beef, gas and other resources than Australia being America's "deputy sheriff" in the Asia Pacific.

But the same cannot be said about Australia, the Chinese market might not be easily replaced because it was buying a third of its exports. Too, selling to smaller markets could "nickel and dime" the Australian economy because market fragmentation leads to "dis-economies" of scale, hurting rather than benefiting the country's exporters.

Moreover, the absence of Chinese students and tourists has and will put a dent in Australia's education system and economy. The country's universities are dependent on international students to subsidize local students, maintain programs and research activities. The Australian hospitality and related sectors are already taking a big hit with fewer Chinese tourists. 

Australia will "miss" China, particularly when the Asian giant is the only major economy registering positive growth in the world right now. Other nations in Asia, Europe and Americas, on the other hand, cannot even help themselves because of the surging numbers of COVID-19 cases, exacerbating economic and health crises.

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