Sameed Basha

Opinion | Australia owes its economic boom to China, and it should think twice about moving on

After recent tensions, Australia’s new relationship with China can be described as blind political adventurism mixed with juvenile opportunism – and it will regret this

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Australia’s Prime Minister Anthony Albanese and China’s President Xi Jinping shake hands before a bilateral meeting on the sidelines of the G20 Leaders’ Summit in Bali, Indonesia, on November 15. Photo: EPA-EFE

Sameed Basha

Published: 3:30am, 20 Dec 2022Updated: 4:08am, 20 Dec 2022

Australia and China are set to mark 50 years since establishing diplomatic relations in 1972. What should have been a celebration of a blossoming exchange of economic, cultural and academic endeavours between the two countries will, instead, be marked by a sombre mood.

The late 1970s and much throughout the 1980s were transformative years for both countries, as Australia began deregulating its industries and opening up to the world around the same time Deng Xiaoping embarked on revolutionising China through its open-door economic policy.

As a result, Beijing needed resources to build the country from the ground up. Australia, conveniently located, had an abundant supply of raw materials for construction, industrialisation and the transformation of China from an agrarian society to a global manufacturing hub.

The win-win trading formula touted by Beijing allowed Canberra to experience exponential growth as a by-product of its success, shielding the country from the 1997 Asian financial crisis and 2008 global financial crisis. China is Australia’s largest export partner, with iron ore and coal exports accounting for 57 per cent of total exports before the Covid-19 pandemic.

From 1995-2015, Australia’s economy grew three times faster than Japan, twice as fast as Europe, and one-third more quickly than the United States. Before Covid-19, Australia was the No 1 destination for Chinese tourists, with 1.43 million visiting the country in 2019, residing for extended periods and spending more than other nationalities.

As a result, by 2017, passenger airlines that flew between the two countries had increased to 15 airlines from four in 2009. There were also 200,000 Chinese students studying in Australia, accounting for one-third of Australia’s education exports.

Relations peaked in 2014 when President Xi Jinping addressed the Australian parliament. A defining feature between the countries until 2017 was having no outstanding historical, political or economic grievances, which was a rarity in international relations.