China Down Under

Coming home

A new column from the Lowy Institute’s Richard McGregor on China’s impact on Australia

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There are lots of things you notice when returning to live in Australia, as I did in early 2018, after decades away. The wealth, for example, which comes from a quarter century of uninterrupted growth; the good food and the coffee, plus the numbers of people enjoying a drink at lunchtime, largely taboo in Washington, where I was last based; and the transformation of the society and suburbs, through what is, per capita, the largest immigration programme of any developed country.

But there is something else about landing in Sydney: how China permeates everything. I have never arrived in another western city, indeed, another non-Chinese Asian city, in which the ride in from the airport is so dominated by Chinese language billboards.

The ads are naturally directed at Chinese (by which I mean, mainland Chinese), either to spend their money in Australia, say, on a new apartment, or an expensive bottle of wine; or to attract their business, to park their money at China Construction Bank.

The Chinese presence continues for long after you arrive at the airport. The surge of Chinese migrants, tourists and students has changed the face of the city and remade the economy. More to the point, it has also begun to dominate Australian politics and become a daily topic of con-troversy in the media.

As someone who has studied and written about China for many years, and who now works at a think tank, the Lowy Institute, in Sydney, I am often asked to comment on the rise of Australia’s great neighbour to the north. Often, I adopt a mildly reassuring tone, telling people that just about every country is in the same boat as Australia in struggling to grapple with China’s rise.

Singapore had its turn in the Chinese tumble-dryer last year in a dispute related to the South China Sea; Germany is worried about Chinese investments into its corporate crown jewels, like Daimler, which owns Mercedes-Benz; and the US is endlessly engaged in perennial great com-petition with Beijing.

But truth be told, Australia is exposed to China like no other country, with the possible exception of South Korea.

That can be a good and bad thing. Economically, Australia’s China story just keeps on and on. According to figures released in January, China now takes one third of Australia’s exports, compared with 14% a decade ago. America’s share, by contrast, is less than 4%.

The growth in services exports is even more pronounced. At Sydney University, overseas student fees rose 92% in three years, to A$752 million in 2017. At the University of NSW nearby, revenue jumped 26% between 2015 and 2016 to A$560 million, according to the Sydney Morning Herald. Most of this money is from Chinese students.

Some have suggested, then, that it is paradoxical that attempts by the Chinese party-state and its proxies in the overseas Chinese community to influence Australian politics have caused such an uproar, as has happened over the last year. After all, doesn’t complaining about Chinese influence run the risk of damaging the economy?

In my view, though, the debate in Australia about China is natural, even if occasionally overly boisterous. Any democracy which finds it is being joined at the hip with a single-party state is going to push back.

The central government has announced it will ban foreign influence in politics. Now, the business community is anxiously awaiting to see if Beijing will retaliate.

That’s why Australia is being watched closely around the world, as what is happening here is sure to be repeated elsewhere. In this new monthly column I will explore the increasing as well as increasingly complex ties between Beijing and Canberra.

Richard McGregor is a senior fellow at the Lowy Institute and the author of books on Chinese politics and foreign policy, ‘The Party’ and ‘Asia’s Reckoning’.


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