Australia and “Interdependence Trap” by China: Means of Reducing Trade Reliance on China

China, which has now become the largest trading partner to over 130 nations in the world, is able to exert influence for its own political and strategic interests by using its vast market power.

By Takashi Terada

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Abstract

China, which has now become the largest trading partner to over 130 nations in the world, is able to exert influence for its own political and strategic interests by using its vast market power. This means that trade dependence on China, as it deepens, is creating an environment for China to realize its national interests.

It will become difficult for countries that rely economically on China to criticize Beijing’s political and diplomatic policies, as China doesn’t hesitate to threaten its trading partners even if it means a decline in economic dependence. This can be called China’s interdependence trap.

In April 2020, Australia called on an independent inquiry about the origins of COVID-19 in Wuhan, China, inviting a strong backlash in China, which feared that it could bring about a worldwide wave of lawsuits seeking compensation. Australia has been tormented by a trade dispute with tariffs unfairly raised and key products shut out from the Chinese market. This amounts to an enormous scale of 27.15 billion AUD (about 2 trillion JPY), roughly 7% of Australia’s total exports (excluding services) in 2019-2020.

This article will discuss how China’s dependence on Australian resource products, including coal and LNG, could be a way for Australia to escape the “interdependence trap,” as China also depends over 60% on Australia for iron ore imports. Then, it proposes that Australia should use FTAs that have trade diversion effects to help reduce Australia’s over 40% excessive dependence on the Chinese market.

It is especially desirable to sign trade agreements with countries that share common values such as the rule of law and democratic system, a basic element for the trust-building in international relations. The article also discusses Australia’s strong involvement in promoting the Free and Open Indo-Pacific (FOIP) and the Japan-US-Australia-India framework (QUAD) as key to avoiding China’s interdependence trap.

Introduction

Australia has been struggling through a trade war with China, which has intentionally restricted imports of major Australian products. Relations between the two countries have rapidly soured. The clash started after Australian Prime Minister Scott Morrison said on April 23, 2020, following the spread of COVID-19 infections, “We will need an independent inquiry that looks at what has occurred” in Wuhan. His remark led to a strong backlash in China, which feared it could bring about a worldwide wave of lawsuits.

The Chinese government sent commodities traders a blacklist of items subject to import restrictions which included at least seven products from Australia—coal, barley, copper ore and concentrate, sugar, timber, wine, and lobster. This is equivalent to about 7%, or 27.15 billion AUD (about 2 trillion JPY) of Australia’s total goods exports excluding services in 2019-2020. As a result, China’s imports of Australian copper concentrate, which topped 110,000 tons in December 2019, dropped to zero a year later.

It has been two years and a half since the conflict intensified. Some view the sanctioned goods and services equate to nearly a quarter of Australia’s exports to China.*1 More importantly, the problem is spreading from trade to across the whole Australia-China relations, including the cessation of major governmental contacts. According to the Lowy Institute Poll issued in June 2021, for the first time in this survey, those who see China as “more of a security threat to Australia” exceeded the number of those who think China is “more of an economic partner to Australia.”*2

About 15 years ago, a senior official in charge of the Northeast Asian region at the Australian Department of Foreign Affairs and Trade frankly admitted that Australia’s relations with China were partially influenced by the functional distance, and as China’s importance in trade increased, Australia had softened its stance towards China over some political issues including China’s problematic human rights record. Yet, the abovementioned poll symbolizes this functional distance no longer exists in China-Australia relations.

Distance is not much of an issue in security because the threat is caused not militarily, but economically. Also, Beijing could hit the Australian economy hard in such a short period because of Australia’s heavy reliance on the Chinese market, with China accounting for over 40% of Australia’s export destination.

While Australia has been nurturing its partnership with Japan in the areas of politics and diplomacy, it has looked to the booming Chinese market to boost its own economy in the last decade. Since China does not share values such as democracy and rule of law with countries like Australia and differences in political and diplomatic positions are likely to become apparent, they are prone to be targets for China’s “interdependence trap.”

Australia’s intent to further strengthen ties with democratic nations such as Japan, the U.S., and India is mainly related to Beijing’s move in hiking tariffs for specific countries, inconsistent with the WHO rules. In November 2020, Prime Minister Morrison flew to Japan for his first official overseas visit that year, even though he had to go through two weeks of quarantine upon his return.

His aim was to meet the newly appointed Prime Minister Yoshihide Suga and confirm how committed Japan was on the FOIP, upon concern that the initiative may collapse with opposition from Beijing.*3 Morrison was the first foreign leader Prime Minister Suga met in person. For the Suga administration, Morrison’s visit amid China’s intensifying tariff hikes implied strengthening of Japan-Australia collaboration for promoting the FOIP, since the Foreign Ministers face-to-face QUAD Meeting was held in Tokyo a month earlier.

This article will explain the process of how Australia got caught in China’s “interdependence trap,” and as ways to escape this, the pros and cons of using Australia’s mineral resource products that China excessively depends on, signing FTAs with credible democracies, and strengthening of frameworks excluding China, such as the FOIP and the QUAD.

Ⅰ. China’s “Interdependence Trap” and Australia’s Over-Reliance on China

In April 2020, Xi Jinping mentioned that “We must enhance international supply chains’ dependence on China and develop powerful retaliation and deterrence capabilities against supply cutoffs by foreign parties.”*4 His remarks reflect that China, which has now become the largest trading partner to over 130 countries, is able to exert influence for its own political and strategic interests by using its vast market power.

This means the deepening of economic interdependence between China and Asia-Pacific countries is creating the environment for China to realize its national interests. It will become difficult for countries that rely economically on China to criticize Beijing’s political and diplomatic policies, as China does not hesitate to threaten its trading partners even if it means a decline in economic dependence. Many countries have fallen prey to this interdependence trap by China, including Japan, Singapore, South Korea, and the Philippines.

Yet, in the latest case of Australia, the level of China-dependence, the speed of the retaliatory measures, and the number of products targeted shows that Beijing is taking an unprecedented fierce approach. From the hardline stance, this can be categorized as Beijing’s foreign policy called the “wolf-warrior diplomacy.”

Figure 1 shows the sharp increase of Australia’s dependence on the Chinese market, which began after the 2008 financial crisis. China’s economic stimulus measures totaling 4 trillion RMB (about 60 trillion JPY then) were used to improve domestic infrastructure, which led to a massive increase in natural resources demand. In fiscal 2010, Australia’s mineral resources exports rose about 30% from the previous year to 170 billion AUD (14 trillion JPY), with China-bound shipments covering 25% of total exports.

Since then, Australia continued to rely more heavily on the Chinese market, effectively letting China change the country into a partner that supports its economic diplomacy. At the Brisbane G20 in November 2014, joined by President Xi Jinping, China and Australia agreed to upgrade the bilateral relations to a “Comprehensive Strategic Partnership,” and the FTA between the two countries entered into force in December 2015.

China made a rare commitment in the trade pact, including liberalization of investment in the Chinese health services market by wholly Australian capital. In March 2015, Australia decides to join the China-led Asian Infrastructure Investment Bank (AIIB). Since Japan and the U.S. decided not to join the AIIB, did not negotiate bilateral FTAs with China, nor granted it market economy status, Australia’s inclination towards China stood out.

When considering China’s intentions, it is significant that all those moves by Australia were taken not during the Australian Labor Party administration (2007-2013), which tended to emphasize the significance of the relations with China in Australia’s foreign policy, but under the conservative Abbott administration that also deepened defense and security ties with Japan’s Abe administration.

From China’s standpoint, it is beneficial to exert influence over Australia using interdependence because Australia is part of the U.S.’s hub-and-spokes system as its ally. Specifically, China’s political intention behind strengthening its partnership with Australia must have been to restrain Australia’s involvement in some strategic issues such as the South China Sea disputes.

However, Australia did not go as far as supporting China by giving up its common values, especially the rule of law. In July 2016, when an international tribunal in The Hague ruled that there was no legal basis for China’s claim to sovereignty over much of the South China Sea, Australia called on Beijing to respect the ruling, keeping pace with Japan and the U.S. From there, the relationship between Australia and China destabilized.

China’s frustration was reflected in an op-ed published by the Global Times, the de facto media organ of the Chinese Communist Party. “Australia has inked a free trade agreement with China, its biggest trading partner, which makes its move of disturbing the South China Sea waters surprising to many……Australia’s power means nothing compared to the security of China. Australia is not even a ‘paper tiger,’ it’s only a ‘paper cat’ at best.”*5

In 2017, concerns about Beijing’s political maneuvering increased in Australia.*6 For example, a senator who had expressed support for China’s South China Sea region was forced to resign for being bribed by a Chinese company. China’s influence on domestic politics became clear to the public eyes.

Although details have not been disclosed, in April 2018, three Australian warships navigating the South China Sea were reportedly challenged by the Chinese navy. This issue further fueled Chinese threat theory in the Australian society, as the Chinese Ambassador to Australia Cheng Jingye made a statement possibly implying China could wage a trade war against Australia.

When Prime Minister Morrison took office in August 2018, the Chinese Ministry of Foreign Affairs expressed its intent to develop bilateral relations with Australia’s new administration, while the Chinese Communist Party-backed Global Times stated in its editorial that better China-Australia relations is good, but China would not mind if it does not improve, revealing that Morrison is an undesirable politician for Beijing.

This is strongly related to further souring of bilateral relations with the Turnbull administration’s decision to exclude Chinese companies from the next generation 5G telecommunications network, by following suit to the U.S. As the Acting Minister for Home Affairs, Morrison played a key role in this decision. Morrison may well have been regarded in China with caution since then, even before he called for an independent investigation into the origins of COVID-19 after he became prime minister.

Table 1: Worsening China-Australia Relations Since April 2020

Events Between China and Australia
2020 AprPrime Minister Morrison requests independent inquiry on the origin of COVID-19
China partially suspends Australian meat imports, imposes over 80% additional tariff on barley
OctDelay in customs clearance of Australian coal in China
China discourages spinning mills from using Australian cotton
China strengthens quarantine for timber imported from Australia; expands embargo thereafter
NovChina delays customs clearance of Australian lobsters and other marine products
China imposes anti-dumping (AD) countermeasures on Australian wine
Chinese Ministry of Foreign Affairs spokesman posts an image of Australian soldier holding a knife at a child’s throat on Twitter
DecAustralia announces joint development of hypersonic weapons with the U.S.
The Australian Parliament passes a foreign relations bill. Government announces to scrutinize innovation research and development program signed in 2015 between Victoria State and Jiangsu Province (contract renewal in 2019)
Australia files a complaint to WTO for improper barley tariffs by China
With trade sanctions from China, Australia expresses policy to promote trade agreement negotiations to develop new markets such as Israel, Switzerland, and South American countries
2021 JanAustralian Foreign Minister Payne urges Beijing to grant WHO investigators entry without delay
AprForeign Minister Payne cancels memorandum and framework between Victoria State and NDRC based on foreign relations law
Defense Minister Dutton warns possibility of clash with China over Taiwan should not be underestimated. Home Affairs Secretary Pezzullo says, free nations “again hear the beating drums” of war, as military tensions rise in the Asia-Pacific region
MayAustralian Defense Ministry decides to review China’s ownership in Darwin Port from national interest perspective
China announces to halt all activities within the framework of Strategic Economic Dialogue with Australia
Australia requests WTO to establish panel on additional barley tariff by China
JunAustralia appeals to WTO the AD measure on its wine by China is unjust
Foreign Minister Payne scrutinizes over 6,000 agreements between domestic universities and foreign nations based on the foreign relations law.
Commonwealth Scientific and Industrial Research Organization (CSIRO) suspends marine joint research with China.
Fifteen members of the ruling conservative coalition submit request for measures to Prime Minister, saying there is no way to prevent Chinese company with 50% stake in Port of Newcastle from raising port entry fee for domestic coal exporters.
For the first time in Australia’s Lowy Institute Poll, those who think China is more of a “security threat” exceeded those who said it was more of an “economic partner”
China files WTO proceedings against Australia (railroad vehicles and wind power towers, etc.)
Compiled from various media reports

In response to China’s one-sided tariff increase, as illustrated in Table 1, which means exclusion from the Chinese market, an unreasonable act against trade rules, Australia sought to resolve this through the WTO dispute settlement procedure, as one of the few developed countries enjoying a trade surplus with China. It has so far sued China over barley and wine.

Australia also shows a distinctive shift to reduce Chinese investment. For example, the number of Chinese investment projects in Australia approved by the Foreign Investment Review Board (FIRB) is 600 fewer than the previous FY2019-2020 (ended June).*7

Based on a legislation passed in December 2020, the Australian Federal Government announced the cancellation of Victoria State’s memorandum of understanding on the Belt and Road Initiative (BRI) signed with the Chinese governmental National Development and Reform Commission (NDRC), a symbolic move on April 21, 2021. The following day, Chinese Foreign Ministry spokesperson Wang Wenbin said, “We express strong dissatisfaction and firm opposition to it,” stating it was an act that disrupts normal exchanges and cooperation.

On May 6, 2021, Beijing announced all activities based on the “Strategic Economic Dialogue” with Australia would be suspended indefinitely. This shows the previously dense economic relationship between Australia and China, including trade, investment, and dialogue, is being cut off one after another.

Ⅱ. To Escape the “Interdependence Trap”: Mineral Resources Export to China

It should be noted that China is also heavily dependent on Australia in importing resources, which means China’s possible use of an interdependence trap can be a double-edged sword. For instance, China imports over 80% of its total iron ore needs, with Australian products accounting for 65% of shipments from abroad.

Perhaps because of this, iron ore is a major import item that is not subject to China’s tariff increases on Australia. There are voices within Australia calling for countermeasures against China by placing tariffs on iron ore exports, and the Global Times has reported on concerns,*8 indicating that China is also closely watching how Australia will react next. We should pay attention to whether this will impact China to change its hardline stance.

The index price of iron ore soared in 2020, surpassing 150 USD a ton, the highest since 2013, and became a blow to Chinese steel companies and builders. In response to such tight demand, China strengthened restrictions on trading of copper and iron ore.

Yet, in May 2020, the price of iron ore, which was 80 USD in April 2020, marked record high by topping 200 USD in May 2021. Since then, prices have remained high. With China’s iron ore imports in strain, the NDRC launched an investigation to crackdown on speculative iron ore trading in the spot market on June 21, 2021.*9

China purchases over 60% of iron ore inventories from Australia, and as mentioned earlier, there is concern that Australian iron ore may be embargoed in the future depending on the development of China-Australia relations. Former Australian resource minister Matt Canavan proposed retaliatory tariffs on iron ore exports from Australia.

However, his successor, Keith Pitt, denied this idea. This is because it has a large impact on the Australian economy, with some calculating that the growth rate of Australia would be pushed down by 0.3% from import restrictions by China, but it will drop 2% if China stops importing iron ore entirely.*10

Currently, the domestic self-sufficiency rate of steel raw materials in China is estimated to be less than 20%. According to the Lowy Institute Poll, China’s Ministry of Industry and Information Technology set a target of 45% self-sufficiency in raw materials for steel production by Chinese companies by 2025 through the use of scrap iron, more efficient operation of domestic iron ore mines, and increased investment in overseas iron ore mines.

In addition, it is working to diversify its suppliers by expanding investment in Myanmar, Kazakhstan, Mongolia and Russia (before its invasion of Ukraine), and it is expected that the export volume from Australia’s iron ore industry to China will decrease in the medium to long term. However, resource analysts estimate that it will take longer for China to actually raise its self-sufficiency rate, and Australian companies will not be immediately affected.*11

As shown in Figure 2, Australia stands out as an iron ore exporter and China as an importer, and this could be a clue to resolving Australia’s trade dispute. Liquefied natural gas (LNG) also has that potential. Australia’s LNG exports reached a record 78 million tons annually in 2020, surpassing Qatar as the world’s top exporter.

The major destinations have been Japan and China, each importing about 2.6 million tons, but as with iron ore, China has not taken measures to shut out LNG exports from Australia in its retaliatory tariff increases. China’s LNG imports have been increasing year by year, reaching 65 million tons in 2020, according to the Australian government’s estimate, and it is expected to overtake Japan to become the world’s largest LNG importer in 2022. The important point is, LNG from Australia accounts for about 45% of China’s imports in 2020.

Although the share of LNG within China’s gas supply is about 25% (about 50% domestic gas), strong demand from the industrial and residential sectors, China’s goal of reducing CO2 emissions to virtually zero by 2060, and its energy shift from coal to gas are expected to continue to provide a strong boost to LNG imports. In other words, Australian LNG is an import material that China needs.

For example, although two small Chinese LNG importers have been verbally instructed to avoid new purchases from Australia for delivery over the next year, no similar guidance has been issued to the major state-owned importer that handle almost 90% of purchases, and this has not affected their plans to continue buying Australian LNG. So, the Chinese government’s restrictions are extremely limited.

However, whether iron ore or LNG, Australia’s potential retaliatory measures such as limiting or suspending resources exports to China, even if approved by the WTO, should be a last resort, because they could further harm relations with China and lead to the long-term loss of the world’s largest market. This action would require an extremely difficult decision by  high-level political actors such as prime ministers.

As for Australian coal, although China has embarked on an import ban, its effect is limited. Coal-fired power generation still accounts for 65% of China’s electricity supply. Unlike iron ore, China can be self-sufficient in coal, since the approximately 3.8 billion tons of domestic demand is met with 3.5 billion tons of domestic production and less than 300 million tons of import.

Perhaps for this reason, the Global Times reported on December 13, 2020, that Beijing approved 10 major domestic power companies to import foreign coal without restrictions, except from Australia. In effect, the Chinese government has confirmed its countermeasures against Australia by banning Australian coal import.

Morrison criticized this as an obvious violation of WTO rules and demanded an explanation from Beijing. In response to Australia’s 2018 decision to exclude Chinese companies from its next-generation 5G telecommunications network, China has informally restricted Australian coal (coking coal) imports since February 2019 on the pretext of stabilizing domestic coal prices. But since May 2020, it has informally restricted unloading of cargos carrying Australian coal, claiming it does not meet environmental standards.

Coal exports usually increase in December, just before China renews its annual import quotas for the new year, but coal exports to China in November and December 2020 from Australia’s two largest coal exporting ports were both zero.*12 Thus, Beijing’s response to Australia in coal was entirely different from iron ore. However, the ban on Australian coal imports has led to confusions in China, including higher coal prices and power supply shortages, leaving the country with the same situation as with iron ore.

The temperature in December 2020 was the coldest in China since 2013, with a 12% year-on-year demand increase for thermal coal that month. Spurred by the embargo on Australian coal, domestic coal prices soared and remained higher than foreign coal prices for over six months, leading the Chinese government to suspend the publication of the four coal-price indices in early December 2020.

The price of thermal coal was 85 AUD per ton in mid-July 2020 and topped 130 AUD in December 2020. In contrast, the 2020 average price in New South Wales was 51 AUD per ton,*13 clearly indicating surging coal prices in China.

In Australia, environmental concerns are creating headwinds for developing new coal-fired power plants, while demand remains strong in Asia and the industry is experiencing a surprise boom. Meanwhile, China, switching procurement from Australian to domestic coal, is spending more on coal from severe supply shortages.

Since the Chinese coal mining companies’ supply capacity could not keep up with the strong electricity demand, there have been reversed price valuations in some cases. To procure coal with higher energy content, Indonesian coal, although containing 20% less energy, was traded at a higher price than Australian coal, and Russian coal with about the same amount of energy was purchased at 50% premium over Australian coal.*14

Although demand increase in China does not directly benefit the Australian coal industry, it boosts the overall coal prices and creates a tailwind for Australia. So China’s retaliatory measures have not been successful but have had the opposite effect.*15

Ⅲ. Cooperation with Democratic Nations

To reduce its dependence on China in the short term, it is more effective for Australia to diversify exports by utilizing FTAs with mega-markets that have more trade diversion effects—namely an FTA with Indonesia that took effect in 2020, a bilateral comprehensive economic cooperation agreement with India which Morrison and Indian Prime Minister Modi agreed in June 2020 to re-engage in negotiations, and the expansion of the membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

This is also the case with the U.K.-Australia FTA (signed in December 2021) that was broadly agreed upon during Morrison’s visit to the U.K. to attend the G7 Cornwall Summit.

To urge a quick conclusion of the FTA, the Australian government sent a determined letter to the U.K., which was hesitant to liberalize agricultural products, stating that a breakdown of the UK-Australia FTA could impact UK’s TPP entry. Taking advantage of the U.K.’s situation, Australia is aware of its contribution to trade diversification.*16 At the G7 Summit, in addition to Japan-Australia, Australia-Germany, and other bilateral summits, a U.K.-U.S.-Australia summit was held, confirming trilateral cooperation in the Indo-Pacific.

In particular, the leaders of the U.K., U.S., and Australia agreed that the three countries need to deepen their strategic partnership, and some in Australia saw that the agenda at the meeting were, in essence, all China-related.*17 And on September 17, 2021, this framework has led to the forming of AUKUS, a new military alliance including the deployment of nuclear submarines to Australia by the U.S. and the U.K.

This was caused by the increasingly tense situation in the Indo-Pacific region, including China’s attempts to dominate the South China Sea in defiance of international laws, as well as the rapid souring of Sino-Australian relations. This framework, also dubbed the Anglo-Saxon alliance, is considered an effective means for Australia to deter China.

At the OECD in Paris on the final day of his international visit, Morrison said that the intensifying tension in the Indo-Pacific will become a threat to the prosperity of other nations, and overcoming the challenge of China and pushing back against anti-market forces will require a global effort “not seen for many decades,” and called to defend the world order that supports freedom.*18

At this Cornwall G7 meeting, without China attending, we can see that Australia has been actively pursuing a “counter-China” diplomacy, and in economic cooperation such as FTAs, shifting to full engagement with countries sharing universal values.

ymgerman Shutterstock.com

This movement is also being promoted with India, which forms the QUAD. At the Australia-India Ministerial Meeting in recent years, the two countries’ intent to make advancements in breaking away from excessive economic dependence on China has been confirmed, by establishing the Supply Chain Resilience Initiative (SCRI) with the three countries, including Japan.

In the past, Australia and India had different degrees of enthusiasm, with Australia emphasizing stronger relations with India, which became more aware of its major-power status, while India was not so keen with Australia, a non-major power. However, at the recent G7 meeting, Modi stated India is a “natural ally” in confronting the threat of authoritarianism,*19 and while sharing the awareness that China is a threat, cooperation between Australia and India, which had not been very active before, is being promoted.

The improvement in Australia-India relations led to the first QUAD Leaders’ Summit (online) in March 2021, by the proposal of the Biden administration. At this meeting, Morrison described the QUAD as “seriously a big deal,” and the most significant development for Australian security and sovereignty since ANZUS,*20 and attended the first face-to-face QUAD Summit held in Washington in September 2021 with high expectations.

That is, by joining all of the U.S.-led coalition of three, four, and five countries against China—AUKUS (trilateral), QUAD (quadrilateral), and Five Eyes (five countries)—Australia hopes it will gain unprecedented treatment as a strategic partner from the Biden administration, which values cooperation with its allies. This is because it is an indispensable backing to prevent yielding to China’s coercion.

Conclusion: In Relation to FOIP

The FOIP has been criticized for its sluggish institutionalization. From Australia’s perspective, China’s exclusion of Australian goods from its market by imposing extra tariffs inconsistent with WTO rules shows the embodiment in the trade area, especially the expansion and enhancement of the CPTTP, should be an urgent matter, as CPTPP achieves high-level liberalization and maintains key functions as a key economic rule-setter.

On September 16, 2021, China announced officially applying for CPTPP membership. This may open the way for Australia to get out of China’s interdependence trap. Countries wishing to join the framework need to enter pre-negotiations with CPTPP members on a bilateral basis. This will provide an opportunity for Australia to directly demand China to withdraw its unjust tariffs on Australian products. If China refuses the requests, Australia can legally express opposition to China’s participation.

The CPTPP can become a foundation for realizing the FOIP vision, as it incorporates various provisions that ask for freedom and openness, such as prohibiting requirements for transfer or access to the source code of computer software and securing transparency in state-owned enterprises. Such provisions are not included in the RCEP.

As Japan advocates the FOIP vision, which is not supported by China, as its diplomatic goal, expanding the CPTPP’s membership and enhancing its rules will become an effective diplomatic tool not only for Australia but also for Japan, which was hit by China’s rare earth metal export ban in 2010.

In fact, in the 12 months up to June 2021, exports to China declined by an estimated 5.4 billion AUD year-on-year, while exports to other countries increased by 4.4 billion AUD,*21 indicating Australia’s trade diversification efforts are effective, and the role of expanding the CPTPP, with China as a non-member, is important. Establishing a “common front” among democracies is one of the important implications of the FOIP and the QUAD.

To “not leave Australia alone on the field,” as mentioned by the U.S. Indo-Pacific Coordinator Kurt Campbell,*22 and to maximize the effect of the CPTPP’s influence on China, both Australia and Japan longs for the U.S. Biden administration to return to the deal.

[Notes]

*1 Wall Street Journal, April 25, 2021.

*2 Lowy Institute Poll 2021. Retrieved July 23, 2021 from https://poll.lowyinstitute.org/charts/china-economic-partner-or-security-threat.

*3 The Nikkei, November 26, 2020

*4 The Nikkei, November 15, 2020

*5 Global Times, July 30, 2016

*6 At least five Chinese nationals were found interfering in Australian internal affairs through massive political contributions and bribes to political circles. (Reuters, June 30, 2017)

*7 Australian Financial Review, June 24, 2021

*8 Global Times, December 10, 2020

*9 Bloomberg, June 21, 2021

*10 Australian Financial Review, December 16, 2020

*11 Australian Financial Review, May 22, 2021

*12 News.com.au, January 10, 2021

*13 Australia Financial Review, January 7, 2020

*14 Indonesian coal accounts for 40-50% of China’s coal imports, and Australia accounts for 30%. In November 2020, China signed a three-year coal import contract worth about 1.5 billion USD with Indonesia, seen as China’s first step in replacing Australian coal imports. (Bloomberg, November 25, 2020)

*15 NNA Australian Version, June 4, 2021

*16 The Guardian, June 9, 2021

*17 Skynews.com.au, June 13, 2021

*18 The Sydney Morning Herald, June 17, 2021

*19 Jiji Press, June 14, 2021

*20 7news.com.au, March 16, 2021

*21 The Nikkei, December 7, 2021

*22 The Sydney Morning Herald, March 16, 2021

Takashi Terada
Professor of International Relations, Department of Political Science, Doshisha University. Earned Ph.D. from Australian National University in 1999. Before taking up the current position in 2012, served as assistant professor at National University of Singapore and professor at Waseda University. Also served as a researcher at University of Warwick and Woodrow Wilson International Center for Scholars. Recipient of the 2005 J.G. Crawford Award. Author of books including “East Asia and Asia Pacific: Competing Regional Integration” (in Japanese, University of Tokyo Press, 2013).

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