China-Australia relations going strong after 45 years

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It is not difficult to find some of the cultural ties in Sydney that have developed between Australia and China during 45 years of official diplomatic relations.

The city’s circular quay is a popular destination for Chinese tourists who now outnumber and outspend visitors here from any other country. Chinese students are also more prominent and account for about 30 percent of all international students.

Less obvious are the economic benefits which only manifest with a closer look at the impact that trade has had on Australia.

The Circular Quay in Sydney./ Reuters Photo

“I think this 45 year relationship between Australia and China has underwritten the economic prosperity of Australia,” said University of New South Wales economics professor Tim Harcourt. “We haven’t had a recession for 27 years, and we have been able to get through the global financial crisis, the Asian financial crisis because of these very strong links with China.”

China has been Australia’s number one trading partner for almost a decade. Two-way trade last year was worth about 155 billion Australian dollars.

“Both of us are kind of mutually dependent on one another. We have resources and food and agriculture that they need access to, and they have a market of over a billion people that we need access to,” said Think Global Consulting CEO David Thomas.

Former Chinese president Hu Jintao with former Australian Prime Minister Gough Whitlam./ Reuters Photo‍

Experts say then Australian Prime Minister Gough Whitlam’s decision in 1972 to enter into a formal diplomatic relationship with China helped the country open its economy to Western nations.

“It had been isolated from the free world so Nixon’s visit to China in 1971 opened up China a little bit and then Australia was one of the first countries to establish a formal relationship with China so it is extremely important,” said University of Sydney Technology professor Chongyi Feng.

While the relationship has had many obvious benefits, it has also had its share of challenges. Many Australians have pointed to recent tensions arising from the Australian government’s plan to introduce laws to curb foreign interference in the country’s political system, which was aimed, in part, at China.

It followed reports linking labor senator Sam Dastyari to a wealthy Chinese businessman and Dastyari announced he will resign his senate seat early next year. However, economists believe the economic and cultural bonds that have developed over the years are strong enough to weather the political disagreements that come up from time to time.

“I think we find with all of our economic relationships with Asia, there are little skirmishes at the margin but the fundamental issues will be an unswerving force. In the broader relationship they are just seen as very small ripples,” said Harcourt.