How China Controls The Australian Economy

Coal exports to China have also resumed but there are other hidden ways that enable China to control the Australian economy. And this brings me back to CBT Holidays and the Australian Open. China is the biggest market not just for CBT Holidays but for all of Australia’s tourism sector. A lack of customers forced CBT holidays to cease operations at one point in 2021. Before the pandemic, Australia was welcoming over 1.2 million Chinese visitors to the country. However, the strong COVID protocols resulted in China reciprocating and banning flights to and from the country.
The trade war between the two countries and China’s struggle with lockdowns have meant that Tourists are yet to return. Australia has tried to make up for the losses by encouraging other nationalities to visit the country. The trend was seen at this year’s Australian Open. Serbian superstar Novak Djokovic lifted the trophy in front of a packed Rod Laver Arena. However, the Chinese contingent was missing from the audience. Australia needs Chinese tourists because they are some of the biggest spenders in the country. On average Chinese citizens spend 5 times more than other visitors and splashed over 8 billion dollars in 2019.
Without that massive contribution, tourism is barely surviving. Tourism operators across Australia made huge profits from China but they’ll be starting from zero this year. There is hope that things will ultimately be back to normal, however, that depends on the Chinese Government.
China can implement mechanisms to keep tourists away from Australia based on political considerations. While the world’s second-biggest economy is allowing its people to travel, group tours to Australia are still largely missing.
China buys as much of Australia’s exports, as Japan, South Korea, the US, and India combined. It is for that reason that when China reported its second-worst GDP growth since the 70s, Australia was worried. Treasurer Jim Chalmers declared it “one of the major economic challenges facing Australia at the start of 2023”.
China, despite a cultural, diplomatic, and military divide, still controls the Australian economy. How exactly does this happen? And how is Australia responding to this economic chokehold? Let’s find out in Today’s video!
China and Australia established diplomatic relations in 1972. At the time China’s share of Australia’s trade was below 1 percent. However, both countries were undergoing a transformation and as the 80s rolled out both Australia and China started deregulating their industries and opening up to the world. In 1985, prime minister Bob Hawke and treasurer Paul Keating saw the opportunity to bring economic reform through China.
This was a partnership of convenience as China needed resources to build the country from the ground up and Australia had an abundance of raw materials. During the next 3 decades, a predominantly agrarian China became a global manufacturing hub and Australia found an economic partner that ensured the country’s exponential growth. The partnership was labeled as a win-win trading formula that shielded Australia from major financial crises in 1997 and 2008.
China at one point in 2012, was bringing in half of Australia’s exports. However, the unrelenting economic cooperation had a by-product. Australia too heavily relied on China. A country that it was culturally, politically, and even militarily at odds with.
On the surface, Australia and China remain deeply divided. After Australia demanded an inquiry into the origins of the COVID-19 pandemic, China resorted to a policy of economic coercion. Many Australian exports were curbed in favor of other markets. Most famously, cargo vessels carrying Australian coal to China’s shores remained stranded at Sea for nine months.
However, beyond all the posturing, China remains Australia’s biggest trading partner. The two-way trade between the countries pushes closer to $240 billion annually, more than three times the two-way trade with the U.S.
About one-third of Australian exports are destined for China and even though that’s a big drop, the volume is still significant in a world on the cusp of a recession.