Campus Review Vol 30. Issue 05 | May 2020 | Seite 18

INDUSTRY & RESEARCH
campusreview.com.au
China
crisis
China experts say trade relations
with Australia will stay ‘strong’ but
need to broaden.
By Wade Zaglas
O
bservers could be forgiven for
thinking Australia-China trade
relations could be in grave danger
following recent diplomatic tit-for-tats and
the ongoing push for an investigation into
the origins and spread of COVID-19.
But while diplomatic and political
relations will occasionally be tense, four
experts who convened recently at the
University of Sydney’s China Studies Centre
said they expected Australia’s trade ties with
China to remain “strong” after the COVID-19
pandemic had passed.
However, despite this optimistic outlook,
the panel of experts agreed that Australia’s
bilateral and investment relationship with
China needed to broaden.
Sara Cheng, head of international
business at Australian Business Consulting
& Solutions, told the panel that three
factors could affect the bilateral business
relationship.
“Firstly, how we play with the relationship
and how we balance our diplomatic and
economic needs,” she said.
“Secondly, China’s economic
performance will affect our trade with
China. China’s economy has been slowing
down a little, but if China feels a lot of
pressure from a diplomatic and political
perspective, it will eventually affect market
sentiment and China’s economy.
“And finally, the global market. How are
the trade war and the coronavirus affecting
the global market?
“If the global market is not doing well, it
will affect the manufacturing sector and
consumption in China, and hence affect
Australia’s mining resources and consumer
goods export to China as well.
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“In the short and medium term, we will not
find a trade partner as substantial as China.”
Dr Geoff Raby, a former Australian
ambassador to China, said that Australia’s
trade relationship with the superpower
needed to broaden.
“From a commercial sense, through all
the vicissitudes, our exports to China have
just grown and grown, but they are very
narrowly based. Take iron ore out of the
equation and they are even more narrowly
based,” Raby said.
“I don’t think travel restrictions will be
lifted anytime soon, and it could even lead
into next year. So that’s going to have a very
big impact, because after iron ore and coal,
education is our biggest export to China.”
Hans Hendrischke, professor of Chinese
business and management at the University
of Sydney, warned that “decoupling” from
China was not a feasible option for Australia
due to the two countries’ economies being
so intimately intertwined.
“China and Australia are economically
mutually dependent. China needs iron ore
and food from Australia for recovery and
rebuilding. Australia on the other hand
needs exports,” Hendrischke said.
He went on to say that the Australian
government was heading in the right
direction in its calls to revitalise Australia’s
manufacturing and industrial capabilities.
“The way the Australian government
is going is quite positive. The idea of
reassuring the Australian manufacturing
capacity is something that could create
more jobs,” he said.
“It will be in markets where we are
competitive – that is largely around
health, food, energy and infrastructure.
The reason we are competitive in those
markets is because we are dealing with
China; we have built up capacity to supply
the demand in China. Even if we move to
stronger manufacturing, we will still have to
work with China.
“We will have to reconsider Chinese
investment. How do we get Chinese
participation and cooperation in tailoring
products for the Chinese market?”
Daojiong Zha, professor of international
political economy at Peking University, also
agreed that Australia needed to invest more
in the Chinese market, and he expected
trade between the two countries to bounce
back in the third quarter of the year.
“It is sad Australians only talk about
Chinese investment into Australia, I never
hear people talking about Australian
investment in China. If nothing else, by
investing in China, it gives you a more
a direct feel about the changes in the
Chinese market. It does not have to always
be iron ore – you can find other niches,”
Zha said.
“What better way to know about a
country’s economy, to predict its future
change, than by being on the ground?
“When we have a recovery, Australia will
be a reliable supplier of high-quality ore and
other products like food. I think the actual
impact of the coronavirus will be very
minimal. I would expect Chinese imports of
Australian supplies will pick up rather rapidly
in the third quarter.”
Despite positive sentiments being shared
about Australia and China’s business
relationship in the future, the panel was
not so optimistic about the two countries’
political relationship, and all agreed
improvement was necessary.
“Our relationship with China has been
at the lowest ebb it’s ever been since
diplomatic relations were established in
1972. That is a big issue,” Raby said.
Zha said the political relationship
between the two countries had been
“historically … very asymmetrical” in terms
of attention.
“In Australia, you have a way higher level
of attention on getting your relationship
with China right. On our side, Australia
does not feature high on the priority list of
political relationships,” he said.
“Unfortunately, the media not just in
Australia but here in China, get into an echo
chamber effect of picking up on negativity
towards each other.”
Hendrischke believes students and
international education were an important
link for the two countries, saying the
problem the two countries faced was
“connectivity”.
“The students are crucial as an asset in
our connectivity,” he said.
“But we may not be able to overcome the
travel restrictions.” ■