China is the sixth-largest foreign direct investor in Australia ($44 billion in 2020), accounting for 4 per cent of total foreign direct investment (FDI). In recent years, Chinese investment has broadened from mainly mining to sectors such as infrastructure, services and agriculture.
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.
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.
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.
A high proportion of Chinese growth has been engineered by a large government-sponsored debt-fuelled infrastructure and property bender. This underpins demand for Australian products and services boosting incomes. The data on bilateral trade reveals the importance of the China relationship.
Relations between the two countries began to deteriorate in 2018 due to growing concerns of Chinese political influence in various sectors of Australian society including the Government, universities and media as well as China's stance on the South China Sea dispute.
Bilateral relations
The Australia-China bilateral relationship is based on strong economic and trade complementarities and longstanding community and cultural links. In 2014, the Australian Prime Minister and Chinese President agreed to describe the relationship as a "comprehensive strategic partnership".
China has remained for years Australia's largest trading partner, export market, source of imports, source of tourism revenues and source of international students.
Trade and investment
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.
Locally sourced meat, seafood and vegetables were complemented by imported ingredients such as Cantonese sausage, tofu, lychee nuts, black fungus and bamboo shoots. By the late 1800s, about a third of commercial cooks in Australia were Chinese.
About a fifth of Australian beef by volume go to China, which relied on Australia for about 7% of its imports in 2021.
Some of Australia's biggest abattoirs have been banned from China since 2020 and Beijing also has in place long-standing bans on Australian barley, wine, seafood and forestry products.
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.
The United States and United Kingdom are the biggest investors in Australia, followed by Belgium, Japan and Hong Kong (SAR of China).
China has established the world's largest social security system and education system, with more than 1.3 billion people covered by basic medical insurance and education at all levels having reached or exceeded the average level of middle and high income countries.
“Tasmania has quickly returned to the top of the economic leader board, courtesy of consistently high rankings for the eight economic indicators,” Mr James said. “Queensland is also a stand-out – its best overall ranking. And the ACT impressively leads the economic rankings on three of the eight economic indicators.
Key findings show foreign ownership of Australian agricultural land is 14.1%, compared with 10.9% the previous year. The majority continues to be in the form of leasehold interests.
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.