Is Australia warming up to Belt and Road?

By Luo Zhen Source:Global Times Published: 2018/7/31 19:58:40

Illustration: Liu Rui/GT

Australia has been jostling with the idea of joining China's Belt and Road initiative (BRI). Fortunately, political perception and Australian society are gradually hoping that their country can cooperate with Beijing. 

For a long time, the Australian government has been waffling between China and the US. On the one hand, Australia has been seeking to develop ties with China, especially in trade. On the other, it views the BRI as a tool of China to erode its influence, and consolidates its alliance with the US to achieve so-called "security."

Last October, the Courier-Mail, a newspaper in Queensland, quoted BHP director Malcolm Broomhead as saying "The government seems to change its mind (on Belt and Road) from day to day depending on whether it's thinking about trade opportunities or strategic issues."

China-Australian ties hit bumps in 2017, but recently a rapprochement seems to be taking shape, with bilateral cooperation on the BRI gaining steam.

On June 28, Steven Ciobo, Australia's Minister for Trade, Tourism and Investment, said in a speech that the BRI serves as a key issue on the agenda of the Australian government. "We support involvement in BRI projects on a case-by-case basis on commercial merit and where there is a clear trade or investment opportunity for Australian businesses," he noted.

The Australia-China Relations Institute released a report on July 19, "Connecting the Asia-Pacific: Australian participation in China's regional infrastructure activities," suggesting that Australia can't ignore the Belt and Road initiative but should formulate consistent strategies to participate more in Asia-Pacific infrastructure projects.

Actually, China and Australia have a solid foundation to deepen cooperation. China is the largest trading partner, largest export market and largest import source of Australia. From January to September 2017, Australian exports to China accounted for 33.3 percent of its total export. During the same period, its imports from China made up for 21 percent of its aggregate import volume.

Their fast-growing trading ties have immensely benefitted Australia's banking, insurance and securities sectors as well as its law firms, professional service providers and education service exporters.

Moreover, both sides oppose trade protectionism. China's development has benefitted from its participation in globalization and the country is committed to safeguarding and strengthening the existing free trade system by revving up "re-globalization."

Meanwhile, Australia is also an important force in opposing trade protectionism. Australian Foreign Minister Julie Bishop criticized the US for taking a unilateralist and protectionist approach in a speech on April 11. She added that Australia, committed to economic opening-up and trade liberalization, is prompting the US to handle trade issues within the World Trade Organization framework.

China and Australia joining hands in boosting connectivity will bring huge development opportunities. Given its reform and opening-up endeavor over the past 40 years, China has embedded itself in the international order, becoming the world's second largest economy, the biggest trading partner of more than 120 countries, and a significant force in defending the liberal trading order.

Since China brought up the BRI five years ago, the initiative has gradually wielded far-reaching influence upon Asia and the world at large. In no way should Australia overlook its influence nor miss the development opportunities precipitated by increasing connectivity.

Three concerns loom large over the future development of bilateral ties between the two countries. Australia is still skeptical about ratcheting up its relationship with China, a rising Asian powerhouse. Furthermore, an active initiator of the Indo-Pacific strategy, Canberra has an overt intention to contain Beijing's influence given its alliance with Washington. It's also been interfering in the South China Sea issue, being at odds with the Chinese government in terms of solutions.

However, their incongruity serves neither of their interests. Now that their relationship becomes stronger, they'd better seize the chance to improve ties and build more favorable platforms to deepen economic and trading cooperation.

The author is a research fellow with the Pangoal Institution.

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