According to Australia's Department of Foreign Affairs and Trade (DFAT), China was the Australia's largest individual two-way goods and services trading partner in 2017-18, accounting for 24.4 per cent (A$194.6 billion) of total trade.*
Japan was the second largest, with 9.7 per cent (A$77.6 billion), followed by the United States, with 8.8 per cent (A$70.2 billion).
China was Australia’s largest export destination (valued at A$123.3 billion) and import source (valued at A$71.3 billion).
Despite trade tensions with the United States, China continues to maintain healthy growth as an export destination for Australia. China has sustained a strong 6.6 percent annual economic growth over the past year**, and in 2017-18 Australian exports grew 12.1 per cent over 2016-17.
Top Australian exports include iron ore and concentrates (A$61.4 billion in 2017-18), coal (A$60.4 billion), education related services (A$32.4billion), natural gas (A$30.9 billion) and personal travel (excl. education) A$21.6 billion.
These goods and services are precisely the same as what China demands.
There is no indication of a dramatic slow-down in China’s economy. Indeed, at the recent two sessions political conference in Beijing, the Chinese government vowed to stimulate growth to counter the effects of the trade war, and maintain growth in the 6.5 per cent range for 2019. Don’t be surprised if this growth rate is exceeded.
It is important that Australia maintains good relations with China and makes an effort to deepen them. These were the words of former Australian ambassador to China, Stephen Fitzgerald who recognised that, more so than the United States, Australia “is living in a Chinese world”.
By this, he meant that it is important to have a strong relationship with China, balancing out long-standing ties with the United States (and the West), and that can only be done with engagement at the top.
Fitzgerald argues that at prime minister level, Australia came some way towards this in the 1980s with Bob Hawke, who spent many days in the company of Chinese leaders, listening, learning and persuading. So much so, that the British and U.S. ambassadors in Beijing apparently complained that the Chinese leaders spent more time thinking about Australia, than about any other country.
He goes onto to say that this type of closeness has not existed, except briefly between Paul Keating and Vice Premier Zhu Rongji. But now, more than at any time in the country’s history, Australia needs a relationship with China “comparable with that which we have, or seek, with other major powers”.
Fitzgerald maintains that there is nothing anti-American in Australia being a close friend of Beijing, helping to interpret U.S. President Trump, working with China, together with other Asian countries, on constructive, conflict-avoiding strategies against disaster.
Two areas that Australia can immediately bring its expertise in helping China would be Asia-Pacific trade agreements and climate change – both areas in which China is willing to offer leadership.
Then there’s the big one: One Belt One Road. Australia can choose to support and participate in this. This would assist Australia to take advantage of the economic opportunities, but more, it could help get it into a deeper relationship with China as a strategic partner.
For a long time, Australia has avoided the issue of never having to choose between the U.S. and China. When Australia was invited to become a founding member of the Asian Infrastructure Investment Bank (AIIB) with an opportunity to be involved in making its rules, and the U.S. sought to prevent it, Australia vacillated, trying not to choose, then chose China eventually.
It was just economic, it said. But the lesson, which is surely political, is that there are issues on which Australia must choose China.
With trade with China (A$194.6 billion) accounting for more than the combined amount with Japan and the United States (A$147.8 billion) it would be illogical not to do so.
David Croasdale and Maggie Chan are from Newell PR, one of Wells Haslem Mayhew’s IPREX partners.
The Shell Issue 13
1. Co-CEO address, Benjamin Haslem
2. How Shooters, Fishers and Farmers tapped a well of resentment to reshape the political landscape, Alexandra Mayhew Hills
3. The rise of activist lobby groups in Australian politics, Larissa Jaffé
4. Social media and the art of political persuasion: No one changes anything, and everyone’s pi__ed, Benjamin Haslem
5. 2020 US Democrats: The New Guard, Isabelle Walker
6. Social media influencers and Federal politicians don blue hearts to fight youth suicide, Stav Pisk
7. New trends in banking? Answering brick bats with bouquets, Kathy Lindsay
8. Strong Australia-China relations important for maintaining trade flow torrent, David Croasdale & Maggie Chan
9. IPREX Highlights