Quick Note: The $80b Australia-China anchor

Quick Note: The $80b Australia-China anchor

PM Tony Abbott and Chinese

President Xi Jingpin concluded a historic Australia-China bilateral free trade agreement lessening the regulations upon Chinese investments in Australia in exchange for opening up China’s market to Aussie farmers tariff-free.

By unlocking several Chinese markets, the agreement promises to breathe fresh life into Australia’s agricultural sector.

The Australian government sees tariff-free access to China’s lucrative dairy markets as a positive financial step to redistribute Australia’s financial stability away from mining-led growth and relieve post-Mining Boom anxiety.

Noticeably, both elements of the deal allow China greater purchase of influence in Australia. Traditionally, Australian resources have answered China’s reliance on exported energy and minerals to fuel it’s rapid expansion into the Asian Century. Should Chinese tariff-free concessions cure Australia’s agricultural sector, the government’s shift towards an agriculture-led economy will rely on Chinese markets. A shift has occurred between China’s previous dependence on our exported energy and this FTA’s leaving the health of our economic prosperity dependent on China.

The lowering of regulations over Chinese investment in Australia is a still more direct purchase of influence over national finances. If criticism should be levelled at the FTA, it isn’t over the quality of the concessions made in the agreement, but rather that the FTA is absent of any Australian leverage even close to China’s purchase of influence over Australian economic prosperity.

The Australia-China FTA is the latest in a series of bilateral agreements China has signed with each of it’s neighbours. The $18b deal is heralded as China’s largest FTA signed in the Asia-Pacific region. The agreement reflects China’s intent to continue it’s self-made economic rise independently of it’s Asian neighbours. The region’s shift beyond Western-assisted economic stability towards independent economic growth has displaced existing Australian influence with an Asian-centric agenda.

The success of Australia’s regional influence is maintained through organisations like APEC which level the economic playing field amongst our Asian neighbours by encouraging the very multilateral cooperation and mutual growth that restored their economic stability. However, Australia’s influence through these multilateral channels is unravelling as our neighbours abandon cooperation for self-interest in territorial disputes over the South China Sea and it’s strategically important international trading sea lanes. The future of Australia’s weight in the Asian Century largely rests on how successfully it can broker multilateral economic relations inclusive of all the regional players.

By this standard, though perceivably a welcome short-term boost for the Aussie agricultural sector, concluding a bilateral agreement places China well out of this sphere of influence. The decade long negotiations fall short of the more remarkable achievement of coercing China into multilateral cooperation to dilute it’s regional influence and encourage Chinese participation rather than dominance. The $80b worth of the deal is as much an estimate of China’s direct and indirect purchase of interest in Australia. The deal does little to secure Australian prominence in the Asia Century and excels in securing a China-centric Asia-Pacific region.

Originally published at ello.co.