24 February 2019
Australian PM Malcolm Turnbull has had some tough words on China, but he knows he can only go so far. Photo: Reuters
Australian PM Malcolm Turnbull has had some tough words on China, but he knows he can only go so far. Photo: Reuters

Australia frets over China’s ‘sharp power’ but can do little

For decades, Australia has remained a peaceful and tranquil country in the Southern Pacific.

However, in recent years, the sparsely populated nation has suddenly become a geopolitical hotspot, thanks to the rise of China and the strategic retrenchment of the US in the region.

Around 10 years ago, Canberra adjusted its approach to foreign policies and began to seek closer ties with Asian countries. Since then Australia has been working aggressively to strike a strategic balance between the US and China in order to have its bread buttered on both sides.

On one hand, Canberra still saw itself as a western democracy and the legitimate representative of the West in the region.

On the other, the country has also put a lot of effort into developing its education industry and taken in more new Asian immigrants in order to draw extra foreign investments, particularly from China.

Suffice it to say that over the past decade Australia has benefited a lot from being able to get a free ride on the train of “China’s rise”.

However, so much for that free ride, as relations between China and Australia have deteriorated since last year, thanks to a series of highly controversial incidents such as Beijing’s surveillance on its overseas students in Australia through its embassy, Canberra’s ban on the acquisition of local agricultural enterprises by Chinese investors, and its cutback on the number of temporary working visas issued to foreigners.

It is indeed hardly an overstatement to say that Australia and China are now in a state of mutual suspicion in virtually every aspect.

Ironically, despite their currently sour relations, Australia has been relying very heavily on Chinese investments for growth in recent years, to such an extent that China’s economic presence and influence can now easily be felt across the country.

Huge shopping malls and luxury residential apartments built by Chinese developers, tens of thousands of Chinese students on the streets, shops specializing in parallel exports to China, as well as super cars driven by flamboyant and cash-flush Chinese have become a common sight in every major Australian city these days.

The influx of Chinese immigrants and capital has sparked widespread fear among the Australians of a “Chinese buyout”.

And things just went from bad to worse. In summer last year, the alleged receipt of huge political donations from a Chinese tycoon by opposition senator Sam Dastyari created a firestorm of controversy and proved to be the last straw that prompted Prime Minister Malcolm Turnbull to take a hard line on Beijing.

Turnbull put forward a legislative initiative to ban all foreign political donations. Meanwhile, he also implicitly accused China of attempting to infiltrate Australia’s domestic politics by offering juicy political donations to the country’s leading politicians.

Turnbull’s accusation immediately drew fierce diplomatic protest from Beijing, and Sino-Australian relations suddenly hit rock bottom.

Yet, no matter how tough Turnbull’s rhetoric was, it hasn’t stopped Chinese capital from continuing to pour into Australia. Also, Canberra doesn’t want to risk angering China further and ruin the economic prospects by escalating any counter-measures against Beijing.

As a matter of fact, with the US in full strategic retreat under President Donald Trump, Australia is currently in a position of relative weakness, and can only take a defensive posture against China.

Besides, Canberra simply cannot afford to alienate Beijing as Australia’s impressive economic growth record for the past 26 consecutive years would not have been possible without China’s huge investments over the years.

However, to hedge against China’s growing influence in the region, Australia did embark on some major initiatives such as continuing to negotiate the Trans-Pacific Partnership treaty with New Zealand, Japan and other Southeast Asian countries even after the US withdrew from the pact.

Meanwhile, Canberra has also recently concluded a new military agreement with Tokyo in an apparent effort to counter China’s “sharp power”.

Nevertheless, the fact is, no matter how hard Australia hedges its bets by aligning itself with other Asia-Pacific powers, as long as it remains heavily dependent on China for economic growth, all the diplomatic stunts are unlikely to change the harsh reality that Beijing is holding all the cards as far as Sino-Australian relations are concerned.

This article appeared in the Hong Kong Economic Journal on Jan 25

Translation by Alan Lee with additional reporting

[Chinese version 中文版]

– Contact us at [email protected]


Associate professor and director of Global Studies Programme, Faculty of Social Science, at the Chinese University of Hong Kong; Lead Writer (Global) at the Hong Kong Economic Journal

EJI Weekly Newsletter

Please click here to unsubscribe