Relations with China are one of the most important aspects of Australia's foreign policy. As an emerging great power in our region with whom Australia is developing a major economic relationship, good relations with China will become an increasingly prominent feature of Australia's international interests.
As well as a military threat, many Australians see China as a security threat. In 2022, two-thirds of Australians (63%) say China is 'more of a security threat' to Australia, while 33% say China is 'more of an economic partner' to Australia.
China is Australia's largest two-way trading partner in goods and services, accounting for nearly one third (31 per cent) of our trade with the world.
The worth of financial assets would fall by one fifth on average, and by one quarter in Australia. An end to trade across a bamboo curtain would hit Australia, since we export more resources to China than anywhere else and we import more goods from China than anywhere else.
If the U.S. is forced to sell half of its direct investments in China, that would cost American investors $25 billion a year in capital gains and up to $500 billion in GDP losses, the report said. U.S. businesses risk losing global competitiveness if sweeping policies force separation from China, the report said.
The Australia-China relationship has traditionally been dominated by global geopolitical and strategic concerns, but since the 1980s the two countries have built up a range of common bilateral and regional interests, including strong economic ties.
Since that time, United States has been the most important security ally. The close security relationship with the United States was formalized in 1951 by the Australia, New Zealand, United States Security (ANZUS) Treaty which remains the cornerstone of Australian security arrangements.
With China said to be angry at Australia for calling for an international investigation into the origin of the Covid-19 pandemic, it implemented a de facto ban on imports of Australian coal, leaving scores of ships stranded and tens of thousands of tons of coal unsold.
And it goes both ways The 2022 Asia NZ Foundation survey found Kiwis view Australia as their closest friend, with 84% seeing Australia as friendly (although I do think much of this has to do with NZ holding the Bledisloe Cup for the past 20 years).
Pakistan and China have long praised the close ties the two countries have with each other. Pakistani President Pervez Musharraf referred to China as Pakistan's "time-tested and all-weather friend", while in return Chinese leader Hu Jintao has referred to Pakistan as "a good friend and partner".
Japan has been Australia's closest and most consistent partner in Asia since the 1980s. Each country views the bilateral trade, investment and diplomatic relationship as vital to its national interest and both countries also appreciate their important role in Asia and have a shared desire to see it prosper.
Since the founding of the People's Republic of China in 1949, 181 countries have established diplomatic relations with China on the basis of the one-China principle.
While China is economically critical for Australia, the reverse is less true. Some 70% of Australia's exports are resources for which there are alternative suppliers. Iron ore exports, which depending on price equate to up to 10% of Australian GDP, are important.
In 2014, Australia was granted NATO Enhanced Opportunities Partner status as a 'valuable, capable and reliable partner', alongside Finland, Georgia, Jordan, Sweden and Ukraine. Australia's relationship with NATO continues to evolve in response to today's complex security environment.
Shared membership of important global and regional multilateral forums including the G20, APEC and the EAS. Australia has a mature relationship with Russia that allows us to confront our differences directly when necessary but work constructively where our interests intersect.
Australia has a substantial relationship with Taiwan including trade and investment, education, tourism and people-to-people ties. In 1949, following a period of civil war and conflict with Japan in WWII, the Chinese Communist Party (CCP) established the People's Republic of China (PRC), with Beijing as its capital.
Not only does China supply a tremendous amount of our consumer and commercial goods, medical supplies, pharmaceuticals, and vital raw materials, but it also controls a huge share of the world's shipping fleet and commercial shipbuilding capabilities.
Today, the United States imports more from China than from any other country, and China is one of the largest export markets for U.S. goods and services. This trade has helped the United States in the form of lower prices for consumers and higher profits for corporations, but it has also come with costs.
Twenty-five per cent of Australia's manufactured imports come from China; 13% of its exports are thermal coal to China. A two-way investment relationship is also developing.
China is our eighth largest foreign investor, with 2.2 per cent of the total. However, the levels of Hong Kong (SAR of China) and Chinese investment in Australia have grown significantly over the past decade. The table below shows the top 20 foreign investors in Australia at the end of 2021.
Australia is China's sixth largest trading partner; it is China's fifth biggest supplier of imports and its tenth biggest customer for exports. Twenty-five per cent of Australia's manufactured imports come from China; 13% of its exports are thermal coal to China. A two-way investment relationship is also developing.
Overall, China accounts for around 40 per cent of Australia's resource exports. Other exports could also be affected materially by a negative shock to growth in China. Since the early 2010s, China has become the largest market for Australian service exports.