Australia and the World: Economic, Strategic and Diplomatic Relationship with China

Running head: AUSTRALIA AND THE WORLD 1
Australia And the World
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AUSTRALIA AND THE WORLD 2
Australia and the World
China and Australia are the two countries that have come from far since the introduction
of bilateral relationships among countries. China is the biggest trading partner to Australia
because of the high need of minerals that is liquefied that Australia has. Several major mining
companies in Australia rely heavily on China. Regarding this, the mutual relationship between
the two countries is so significant in that the growth of the economy of Australia is largely
contributed by this kind of relationship. China as a country provide an adequate market to raw
materials and products in Australia to becoming expansive, thus it is of national interest that the
relationship remains intact for the sake of the country's economy. The paper will thus explore
three key areas regarding the bilateral association; they include economic relationship, strategic
relationship and diplomatic relationship with a strict focus on the bilateral relationship
implications.
Australia’s Current Economic Relationship with China
The growth of China as a country since the 1970s has constituted urbanization, growth in
manufacturing and infrastructure investment (Au-Yeung, Keys & Fischer, 2012). As a result, it
created demand for the ‘building materials’ that would be used in electricity and transportation
together with raw materials that would be used in the manufacturing industries (Australia’s
economic relationships with China – Parliament of Australia, n.d.). Australia as a country was
well positioned and placed to meet a significant number of China’s demands thus it became a
ready market for Chinese manufactured goods (Garnaut, 2011). Presently, China is the largest
trading partner when it comes to imports and exports in Australia. It comes forth as the sixth
largest trading partner of China and its fifth biggest supplier of the imports and it comes at the
tenth position in supplying China with exports (Australia’s economic relationships with China –

AUSTRALIA AND THE WORLD 3
Parliament of Australia, n.d.). Australia’s manufactured imports coming from China accounts for
twenty-five per cent; thirteen per cent of the exports are directed to China as coal.
From the above statistics, it is evident that for a long time there has been a development
of an association that is two way defined between the two nations. As China takes a step ahead
of moving into the next step of development, there will be shifting of the demand from raw
materials to exclusively transformed services, expertise and manufactures (Yan, 2019, pp13).
Still, Australia would still have possible benefits in providing all these even though there are no
clear resources that are directed by the sector of the resources. According to Dollar (2017), ‘the
economy of Australia is only at 6% the magnitude of the United States economy yet by far larger
than the direct investment in the united states, is China's stock of FDI in Australia.’ This is
consistent to a prediction that was given way back that Australia’s export of the resources to
China would continue growing and increase. Additionally, other commodities like wheat, wool
and other related minerals would do well as China rises economically. In broader words, the
relationship between the two countries has seen each country mutually benefitting from each
other in terms of trading activities (Culas & Timsina, 2019).
Australia’s Current Strategic Relationship with China
According to Defense and Strategic Relations (n.d.), the nation of Australia has on a high
probability the nearest defense affiliation with China in comparison to any of the US-led five
members of the countries that have a sharing network defined by intelligence. There has been
and there is always bilateral exchange between the Defense Forces of Australia and the
Liberation Army of the Chinese people. However, as China influence on geopolitics in Asia has
constantly led to the strengthening of the Chinese militia, which is viewed as a major strategic
challenge to Australia. The strategic relationship between the two countries remains defined by