Australia’s new land of opportunity

Last week Australia was treated to yet another finger-wagging exercise from China — they are coming thick and fast these days.

This time it was the former Chief Economist of the World Bank, who not so subtly told Canberra to get into line or risk missing out on the fruits of China’s inevitable rise.

Justin Yifu Lin, now an academic at a Beijing university and firmly parroting his Government’s line, said Australia’s resources sector could “pay the price” for its recent unfriendly actions.

He was referring to attempts to counter China’s diplomatic courting of South Pacific nations and rising concerns over the amount of land and real estate that Chinese investors now own in Australia.

References to the alliance with the United States not being in Australia’s  best interests in the projected New World Order, and even a suggestion that it should sign up for China’s much vaunted Belt and Road project were all put, more or less subtly, during the media interview at the Australian National University’s China Update forum.

These and other criticisms are clear indications of the pressure Beijing feels it can apply now that Australia’s economic prosperity is so dependent on the China trade.

China is by far Australia’s largest trading partner, with around 30 per cent of all exports heading there, more than double that of the next largest destination, Japan.

As I have written before, this has been a dangerous development and marks an inborn laziness in many of the country’s largest exporters, especially in the resources sector.

As long as China is taking so much of what Australia produces there has been no need to put effort into market diversification, even though so much dependence on a nation that is not an ally, whose political and social systems are alien, and who is beginning to flex its military muscle, carries clear warnings.

Canberra is belatedly seeing the threat of an over-reliance on China with the publication of an excellent report by the Former Secretary of the Department of Foreign Affairs, Peter Varghese, outlining a strategy for boosting trade links with India over the next two decades.

Varghese rightly found that over this period no single market would offer Australia more trading opportunities than India.

“India’s scale alone encourages ambition, but it is the complementarities between our two economies that will determine our success,” Varghese writes.

“The foundations for an enhanced economic partnership with India are strong, underpinned by people-to-people ties and shared values.”

The room for growth there is massive — India accounts for a miserable 4.3 per cent of Australia’s exports, and while the United Kingdom will try to leverage its historic links with the sub-continent after it leaves the European Union, Prime Minister Theresa May’s hectoring comments on Indian over-stayers in the UK still rankles in New Delhi. 

The opportunities for Australia are there for the taking, and there is no reason why it should not become a true and significant partner with the world’s largest democracy.