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  • Zoe

Australia and China: The undoing of mutual prosperity.

In December 2015, Australia and China signed a historic trade agreement, The China–Australia Free Trade Agreement (ChAFTA). This agreement boasted immense economic growth for Australia and boosting our position in the Chinese market. Ultimately the deal cemented a new and improved trade relationship with China, which saw them become Australia's largest export market, taking nearly a third of our total exports.

David Uren from The Strategist reported in November 2020 that Australia is overwhelmingly dependant on China for several exports such as; nickel ore, iron ore, timber, wool, lobster, barley, cotton, processed foods and woodchips.

In 2020 when COVID-19 became an international pandemic, Australia supported an international inquiry into China's handling of the coronavirus. However, Australia's support of the investigation caused immediate tension between China and Australia, and over the last 18 months, the relationship has only increasingly deteriorated.

By late 2020, it was reported that the Chinese government threatened the Australian government with disciplinary action for their support in the international inquiry regarding the origins of the coronavirus, among 13 other grievances.

China publicly accused Australia of "poisoning bilateral relations", following the list of grievances in conjunction with a Chinese government official stating to a Canberra reporter, "China is angry. If you make China the enemy, China will be the enemy".

The tension between China and Australia tightened further in 2021, with statements from Chinese officials declaring that Beijing was singling out Australia and enforcing economic punishment. By March 2021, reports from the Department of Foreign Affairs and Trade (DFAT) revealed a 40 per cent decline in the value of Australian Trade with China.

Over the past 18 months, Australia's trade war with China has grown ever more prominent, but the roots of the trade war run deeper than calls for an inquiry into the origins of the coronavirus.

Professor of Strategic Studies in the School of International, Political and Strategic Studies at the Australian National University, Hugh White, made statements in his 2012 book, The China Choice, that ‘Australia’s future depends on America and China.’

In 2010, Professor White wrote in a quarterly essay – Power Shift: Australia's Future Between Washington and Beijing – that China is progressively unsatisfied with American hegemony in Asia and actively challenges it. As a result, white warned, China seeks to play a role in regional affairs and unchecked dissatisfaction from China will probably lead to conflict between the great powers.

So how does this relate to Australia and China's current trade war?

As predicted by Professor Hugh White, Australia had to choose between our strategic relationship with the US or our trade relationship with China. Despite the denial from successive governments, both liberal and labour, the time has come to make a choice, and we've made it. We've sacrificed our trade relationship (all trade except for Iron Ore has taken a significant downturn) following Australia's international support to the inquest into the origins of the coronavirus.

Australia's shift to take sides with the US over China is arguably a realist choice. Many individuals who work in international relations argue that IR is primarily about power in military terms. As Australia's ADF somewhat lack the capability, we are highly reliant on the US military for protection, especially against an attack from China. Choosing the US over China safeguards our country as it provides us with the military capability to defend our land, resources, and citizens from an international threat, Chinese or other.

For years China has coerced Australia with its trading power. Australian Strategic Policy Institute executive director stating to Nine News, "China has applied a strategy to Australia: shut up and take the money". Despite the liberal view on China and Australia's trade as one of great, shared prosperity, the rising power of the Chinese military is to be feared.

Natasha Kassam from the Lowy Institute identified in her article, Great Expectations: The unravelling of the Australia-China relationship, that China has long sought to divide and isolate US allies. Despite the ChAFTA, in China's eyes, Australia has always been defined by its relationship with the United States, thus highlighting why Australia's support for the inquest into the coronavirus origins caused such an intense rift in Australia-China's relationship.

Taking IR elements into consideration, such as Australia's strategic relationship with the US, the downward spiralling relationship with China, and the rapidly growing strategic competition between the US and China, leave international relations experts questioning whether the current international system will undergo a fundamental change in the future.

As China continues to assert itself internationally aggressively, former Australian Prime Minister, Tony Abbott, says Australia today would never contemplate signing another free trade deal with China. He further stated to the press that a new cold war between the countries is more than likely.

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