Report: Australia's Bilateral Relationship with China

This report provides a detailed analysis of Australia's bilateral relationship with China, focusing on three key areas: economic, strategic, and diplomatic ties. The economic section highlights China's role as Australia's largest trading partner, emphasizing the importance of mineral exports and the mutual benefits derived from trade. The strategic relationship explores the complexities of defense cooperation and the impact of China's growing influence in the Asia-Pacific region. The diplomatic section examines the evolution of the relationship, including periods of tension and efforts to restore positive engagement. The report emphasizes the importance of maintaining and strengthening the relationship for the mutual economic and strategic interests of both countries, providing a balanced perspective on the challenges and opportunities that define this crucial international partnership. The analysis draws on statistical data, government statements, and scholarly sources to provide a comprehensive overview of the subject.

Running head: AUSTRALIA AND THE WORLD 1
Australia And the World
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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 –

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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

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cooperation and misgivings. The rising of China as a nation has had a notable impact on
Australian strategic thinking. The officials from the United States were observed stating that
Australia would be required to participate in causing any conflict between China and the United
States. China’s occasional belligerent sovereignty assertions over disputed boundaries in east
china sea and the south china see have most of the time been followed by the ADF acceptance of
a enhanced concept of the national security of Australia to perform trade. This means that
Australian national security extended beyond homeland defense having in mind that any
disruption of the critical sea-lanes and to the ability of Australia perform trading activities would
have a detrimental outcome to the country (Defence and Strategic Relations, n.d.).
Australia’s Current Diplomatic Relationship with China
In 2018, as the year was ending, the diplomatic relationship between China and Australia
were not that good. As of the end of 2018, only 68 countries had signed the ‘one belt one road
initiative’ -an initiative that intends to connect the whole of the world to make it easy for
transportation system and to make the whole world as one in some way (Looking back on a
rollercoaster year of relations between Australia and China, 2018). It is surprising that Australia
remained unwilling to sign the deal and participate in the divisive BRI. As it was observed, Ms
Jakobson of China matters was recorded stating that there had been a lot of misunderstandings of
the belt and the initiative for the road in Australia (Looking back on a rollercoaster year of
relations between Australia and China, 2018). However, as the year started in the year 2019, the
relationship between the two countries was in the easing process. Ms Payne visited China to
meet with the Chinese foreign minister Wang Yi, a meeting that was described as full of
positives, jokes and everywhere smiles. In the first half of the year 2018, it was obvious that the
relationship between the two countries was heading to a free fall. Fortunately, the changes in the

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government of Australia hastened the process of restoring the bilateral relationship for its sake
and slightly the sake of its people.
It is recommendable that the two countries maintain the relationship and even make it
stronger. It is also recommendable that the two countries cooperate in making an informed
decision for the good of the countries and their people.
In conclusion, it is apparent that the two countries' state of the bilateral relationship is
good. The bilateral relationship between the two nations is promising to become strong once
again after it almost falls apart. Therefore, it is necessary that there is continued dependence
between the two countries just like it has been previously to ensure the two states mutually
benefit from each other as they foster in developing their economies.

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References
Australia’s economic relationships with China – Parliament of Australia [Video file]. (n.d.).
Retrieved from
https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/
Parliamentary_Library/pubs/BriefingBook44p/China
Au-Yeung, W., Keys, A., & Fischer, P. (2012). Australia-China: not just 40 years. Economic
Round-up, (4), 7.
Culas, R. J., & Timsina, K. P. (2019). China-Australia Free Trade Agreement: Implications for
Australian agriproducts trade and farm economies (No. 2186-2019-1408).
Defence and Strategic Relations [Video file]. (n.d.). Retrieved from
http://aus.thechinastory.org/archive/defence-and-strategic-relations/
Dollar, D. (2017). United States-China two-way direct investment: Opportunities and
challenges. Journal of Asian Economics, 50, 14-26.
Garnaut, R. (2011). Australian opportunities through the Chinese structural
transformation. Australian Economic Review, 44(4), 437-445.
Looking back on a rollercoaster year of relations between Australia and China [Video file].
(2018, December 28). Retrieved from
https://www.abc.net.au/news/2018-12-27/chinese-australian-relations-have-had-a-
rollercoaster-year/10638590

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Yan, H. (2019). The China-Australia Free Trade Agreement and the Choice of Intellectual
Property Interest Balance in the Two Countries. In Free Trade Agreements (pp. 119-
137). Springer, Singapore.