China and Australia have a complicated relationship, characterized by economic interdependence and political tensions. While both countries have accused each other of human rights violations and national security threats, they cannot afford to sever their economic ties. In 2020, almost half of Australia’s exports went to China, emphasizing the importance of the Chinese market for the Australian economy. However, China has used economic coercion, such as imposing tariffs and restrictions, to express its disapproval of Australian policies. This has led to tensions and uncertainties in the relationship between the two countries. China’s trade restrictions have affected various Australian industries, including barley, beef, wine, coal, timber, and lobster. Despite these challenges, Australia remains critical of Beijing on several fronts, indicating that China’s economic coercion might not have achieved its intended goals. It is clear that the economic relationship between China and Australia is essential for both countries, but it is also fraught with complexities and risks.
Australia’s reliance on China for its natural resources, especially raw materials like iron ore and liquefied natural gas, gives it leverage in the relationship. China heavily relies on Australian resources to sustain its growing economy. China’s trade restrictions did not target these commodities, highlighting the dependence of its steel and manufacturing industries on Australian supplies. Some analysts argue that these trade restrictions have actually pushed Australia closer to the United States, as Beijing realized that its coercive measures were driving Canberra away. China’s decision to remove trade restrictions and normalize diplomatic contact may be an attempt to woo Australia back and gain its support for joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade agreement that China has been excluded from so far.
However, the tensions with the United States add another layer of complexity to the China-Australia relationship. As Washington tries to exclude China from accessing critical technologies and urges its allies to do the same, China does not want to alienate America’s allies. Australia, with its close political and military ties with the US, is expected to align with American policies. Yet, this alignment puts more strain on the relationship with China and risks returning both countries to square one. If Australia becomes too closely aligned with the US, it jeopardizes the economic relationship with China and may hinder collaboration on important global issues, such as fighting climate change.
Australia, therefore, finds itself in a delicate balancing act. It seeks to maintain economic ties with China while diversifying away from reliance on the Chinese market and restricting Chinese capital flows into the country. However, this approach may not be sustainable in the long run. The Australian government desires a relationship with China where trade continues as normal, but it also wants to reduce its dependence on China and align with the US. These conflicting goals create uncertainties and challenges for the future of China-Australia relations.
In conclusion, China and Australia’s relationship is a complex mix of economic interdependence and political tensions. While both countries heavily rely on each other for trade, they have accused each other of violating human rights and threatening national security. China’s use of economic coercion has caused disruptions in various Australian industries. However, Australia remains critical of China and has sought to diversify its economic relationships. The tensions with the United States further complicate the relationship, as China does not want to alienate American allies. Australia must navigate these complexities carefully, as it balances its economic ties with China and its political alignment with the US. It remains to be seen how the future will unfold for China and Australia, but the challenges and risks are undeniable.
