The China and Australia puzzle. Photo: iStock
The China and Australia puzzle. Photo: iStock

Australia is between a “rock and a hard place” when it comes to forming China policies due to strong anti-Chinese sentiments at home and US pressure. Being a staunch ally in the Asia-Pacific region, Australia is expected to toe the US line – renouncing China’s maritime “aggression” and “failure to play by the rules,” and participating in freedom of navigation and overflight operations (FNOPs). At home, rising populism (some even call it xenophobia) is forcing the government to impose tough rules on Chinese investment.

However, in doing so, it may jeopardize the country’s national interests and turn the “China threat” into a self-fulfilling prophecy, a prospect no Australian government wants. China is the country’s biggest trade partner and a nuclear power.

Is China a threat to Australia?

Australians must ask themselves: Is the “China threat” real or manufactured? There is no evidence that China has ever intended or actually threatened the country with either economic or military means. Indeed, it could be argued that Australia was the aggressor when it sent troops to help Britain crush the Boxer Rebellion. Australian troops fought alongside their Anglo-American allies against the Chinese in the Korean War. Yet, neither war had anything to do with Australia.

With regard to the South China Sea, China is perhaps more concerned with freedom of navigation than any country on earth. Of the US$5 trillion worth of trade transiting through the waterway, over 80% of it is imported to and exported from the country, a fact China critics conveniently ignore. Moreover, it has never blocked any ships, including those carrying goods to and from Australia, from sailing through those waters.

China considers the territory within the “nine-dash line” its “inherent territory” claimed by previous governments. Moreover,  the US-backed Cairo (1944) and Potsdam (1946) Proclamations demanded that Japan and other imperial powers return them to China after the Second World War along with the Diaoyu (Senkaku) Islands in the East China Sea. The US reneged on its commitment after the Communists won the civil war against the pro-US Nationalists.

China considered the Permanent Court of Arbitration (PCA)  a “kangaroo court,” dismissing it as “invalid and contrary to international law,” because its ruling was a foregone conclusion. Four of the five judges were appointed by a Japanese jurist and said to be paid by Japan.

On trade and investment, Chinese investors were only interested in earning a profit and ensuring food security for the country’s increasingly wealthy population. The Chinese buying large quantities of goods from Australia and investing heavily in Australian property and industries are indeed instrumental in sustaining the country’s long-term economic growth.

History will judge whether the present Chinese government is “aggressive” in the South China Sea, but there is no credible evidence that it is or will be a threat to Australia

History will judge whether the present Chinese government is “aggressive” in the South China Sea, but there is no credible evidence that it is or will be a threat to Australia. Indeed, it could be argued that the “China threat” theory is based more on xenophobia: the Chinese “will take over the country” with their huge investment or cities like Sydney and Melbourne will be “swamped with Asians (Chinese).”

Consequences of treating China as a threat or enemy

Joining the US on FNOPs and enacting hostile policies towards Chinese investment and immigration amounts to Australia “biting the hand that feeds it.” China’s consumption of Australian resources pulled the country from the economic brink in 2008. Since then, China has been buying over 30% of its exports, sending millions of tourists and international students to its shores and investing heavily in the country’s industries.


Australia implemented the “White Australia Policy,” officially referred to as the “Immigration Restriction Act” in 1901 to bar non-Europeans from entering the country. Though the White Australia Policy officially ended in 1973, rising populism due to declining economic prospects and terrorism has again pushed xenophobia to the forefront of Australian politics. The election of Pauline Hanson and three other members of her One Nation  Party to the Senate made her the”‘king maker,” forcing the minority Liberal government to take a sharp turn to the “right” on investment and immigration legislation.

The xenophobic voice has become loud and clear, impacting Australia’s immigration, investment and foreign policies. Chinese investment is particularly targeted, blocking the sale of an energy company and a huge piece of agricultural land to Chinese investors, and restricting foreign home buyers (read Chinese). On immigration, refugees entering the country are highly controlled – restricted to an island on the west coast. Citizenship is granted only if the applicant has demonstrated that they have “Australian values” and a willingness to integrate or become “one of us.”

The power and irony of loyalty and ‘kin and kith’

The “kin and kith” sentiment remains strong because Australia has always considered itself a Western country accidentally located in Asia. True to its Western roots and deep loyalty to the US (from saving it from Japan in the Second World War), Australia has made a military contribution to every war – Korea, Vietnam, Iraq and Syria – that the West (read US) either initiated or became involved in after the Second World War for no reason other than to “stand shoulder-to-shoulder” with “kin and kith.” Not only did these wars have nothing to do with Australia, the decision to fight was based on”fake news” (with the exception of the Korean War) or they were fought for the wrong reasons. Vietnam, for example, was falsely accused of firing on and sinking a US warship in the Gulf of Tonkin. “Regime change” was the justification for the Middle East conflicts.

The irony of loyalty and kinship

It could be argued that adopting the US “regime change” stance in Syria and other Muslim countries might be responsible for importing terrorism to Australia. Killing innocent Australians, however, brings out xenophobic sentiments that were not far below the surface. All Muslim Australians were tarred with the same brush and branded as terrorists, which led to more hate crimes being committed against the Islamic community and generally fueled tensions.

Joining the US and Japan in FNOPs against “Chinese aggression” in the South China Sea could be devastating for Australia. Spending billions of dollars to acquire eight submarines and a small number of fighter jets and surface combat ships over the next 20 years would not be sufficient to defeat China in a war.  China has many more ships, submarines and warplanes, and has missiles armed with nuclear warheads. In 20 years, the Chinese military will be even stronger than it is today.

Australia should engage rather than confront China

Australia is in a “damned if you do and damned if you don’t” situation. Barring or restricting Chinese investment and immigration would harm its economic prospects. Joining the US and Japan in FNOPs would endanger the nation’s security. But ceasing to be a staunch US ally and refusing to pander to xenophobic domestic sentiments would come at a heavy political price.

But taking the debate to its logical conclusion, Australia should engage rather than confront China. That stance has benefited both in the past and there is no reason to believe that it would not do the same in the future. Even the US and Japan are eying a “strong and constructive” relationship with China. Both countries, after all, sent high-level delegations to the Belt and Road Forum in China in May to engage with Beijing officials, so there are reasons to be optimistic.

Ken Moak taught economic theory, public policy and globalization at university level for 33 years. He co-authored a book titled China's Economic Rise and Its Global Impact in 2015. His second book, Developed Nations and the Economic Impact of Globalization, was published by Palgrave McMillan Springer.

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