Economics

Lockdowns in centres of commercial activity and no clear national strategy for living with COVID-19 is the latest challenge confronting the People's Republic of China’s (PRC) economy. The potential for geopolitics to spill over to disrupt the PRC's trade and investment has also increased after Beijing refused to condemn the Russian invasion of Ukraine. And none of the structural headwinds facing the PRC economy – US-PRC strategic competition, unfavourable demographics, rising debt, amongst others – have disappeared.

If successfully realised, the Belt and Road Initiative will be the most ambitious and expansive developmental project the world has ever seen. It is not, however, unprecedented. In the aftermath of the Second World War the United States developed what was then an equally unprecedented and ambitious initiative designed to simultaneously facilitate the (re)development of some of the world’s key economies and reinforce its own position as the leader of the western world. Both the American Marshall Plan and China’s BRI are important expressions of geoeconomic influence and power.

Perspectives is UTS:ACRI's monthly commentary series, featuring a piece on a topical subject in the Australia-China relationship from an invited expert contributor. 

By Tim Harcourt

In 2020 Australia’s political relations with China plumbed new depths. Trade and other economic ties were also hit with disruption. Contributing to this deterioration, and complicating an accurate assessment of the consequences, has been a raft of misunderstandings. This article demystifies the bilateral trade tensions by exposing the deeper drivers of political friction, providing a critical assessment of the vulnerability of the Australian economy, and placing the current state of Australia’s relations with China in a comparative regional perspective.

By James Laurenceson

Note: This article appeared in East Asia Forum on December 21 2021.

This paper suggests Australia’s economic exposure to China creates three distinct risks: a Chinese growth shock that comes with a ‘hard landing’, a structural shift towards less import and natural resources–intensive Chinese growth, and the Chinese Government disrupting trade ties for coercive purposes. With external demand for Australia’s goods and services largely exogenous, the scope to mitigate these risks by reducing exposure to China, without resorting to costly market intervention, is limited. At the same time, the probability and scale of each risk should not be overstated.

Note: This interview appeared in the Global Times on December 1 2021. This transcript includes a Simplified Chinese translation by Jun Wang, NAATI Level 3 translator (NAATI ID: 80136).

本采访于2021年5月20日发表于环球时报。本文由 Jun Lucius Wang（NAATI三级翻译员; NAATI ID: 80136）翻译。

Editor's Note:

By James Laurenceson

Note: This article appeared in Pearls and Irritations, a public affairs blog, on December 1 2021.

Almost as soon as Beijing launched a campaign of trade punishment against Australia in May 2020, the instinct of many in Canberra was to reach for support from the US, our 'great and powerful friend'. 

Executive Summary

Note: This factsheet is a live document which will be updated as and when notable developments in trade and investment occur. It was last updated on November 8 2021.