Australia and China Strengthen Ties Amid Global Geopolitical Headwinds

Strategic Insights -

Australian Prime Minister Anthony Albanese embarked on a six-day, three-city tour of China, meeting with President Xi Jinping to strengthen bilateral ties between the two nations. The visit comes as the world grapples with the impact of Donald Trump's trade war, and China's $20 billion trade sanctions on Australian farm exports in 2020. Xi Jinping emphasized the importance of cooperation, stating that "the China-Australia relationship has risen from the setback and turned around, bringing tangible benefits to the Chinese and Australian peoples."

Key Takeaways:

  • The China-Australia relationship has improved in recent times, with Xi Jinping stating that "the Chinese side is ready to work with the Australian side to push the bilateral relationship further and make greater progress."
  • Australia's two-way trade with China was worth nearly $312B last year alone, or about 25% of all Australia's trade.
  • The Australian government has committed to a review of the China-Australia free trade agreement, signed in 2015, and has initiated talks to extend the agreement to include links in fields like artificial intelligence, the digital economy, clean energy, and healthcare technology.
  • President Xi Jinping warned that China would conduct naval exercises whenever and wherever it desired, in response to questions about Chinese warships conducting live-fire drills in the Tasman Sea.
  • The Australian government has not yet raised the issue of removing the Port of Darwin from Chinese ownership with China's leaders.
  • The visit comes as President Trump's tariffs have a shape-shifting impact on world trade, with various nations seeking to forge new trade pacts, including Australia and the European Union.
  • Australia's trade with the US is less than 5% of its total trade, with China being its major trading partner and the destination for more than one in four of its export dollars.

Statistics:

  • $20 billion value of trade sanctions imposed by China on Australian farm exports in 2020
  • $312B two-way trade between Australia and China in 2022
  • 25% of Australia's total trade accounted for by China
  • 50% tariff announced by the US on all Brazilian imports, potentially creating a gap to be filled by Australian beef
  • $312B in annual trade between Australia and China over the past year

Sources:

  • Jason Gregory, "Growing agribusiness links on agenda as China flags pushing ties"
  • Australian Broadcasting Corporation (ABC) News
  • Prime Minister Anthony Albanese's office
  • Chinese Premier Li Qiang's office
  • Business Council of Australia chief executive Bran Black