Chinese Premier Li Keqiang with Australian PM Turnbull (Photo : Getty Images)
Chinese Premier Li Keqiang's five-day visit to Australia is considered by many to be successful as China and Australia have agreed to reject U.S. protectionist policies and reaffirm both their commitment to global free trade, Reuters reported.
"The cooperation between China and Australia showcases to the region and the world our determination to defend trade liberalization and advocate the benefits of free trade," Australian Prime Minister Malcolm Turnbull told business leaders and politicians at a forum in Sydney.
The report, however, said that the growing trade ties are only part of Australia's move to maintain the delicate balance between its security relationship with the U.S. and its economic ties with China.
According to the report, Li was aware of the situation and took advantage of his visit to warn Australia to avoid "taking sides, as happened during the Cold War."
Although Turnbull had pointed out that "the idea that Australia has to choose between China and the United States is not correct," some analysts believed that Australia has to make a choice.
"The problem Australia faces is the growing tensions from China's desire for influence and that is going to mean Australia may have to choose between its two allies," Nick Bisley, professor of international relations at Melbourne's La Trobe University, said.
As both countries enjoy peace and economic growth for many years, China has been slowly getting the support of Australians although a survey conducted by the Lowly Institute showed that respondents were divided on whether China or the U.S. is more important to Australia.
After the U.S. withdrawal from the Trans-Pacific Partnership, a 12-member trade agreement that was essential to the U.S. "pivot to Asia," China started to assume the vacuum and moved to further strengthen China-Australia trade ties.
Li came to Australia to announce that China has lifted the restrictions on chilled beef exports, as a token to Australia's cooperation. Last year, China bought $114-billion worth of Australia goods and services.
"We've made it a priority to get access for agricultural products into China," an Australian government source told Reuters. "Getting access to China for agricultural products can take years but as they get hold of more and more produce and they appreciate the quality, that opens the door for access for additional products."
Australia' balancing act
Experts said that Australia has to keep the delicate balance between its trade and security interests.
The country has to develop Darwin, a strategic jump-off point and surveillance base for Australian-U.S. military to the disputed South China Sea, the report said.
While Australia has strengthened its security alliance with the U.S. as part of the Five Eyes intelligence network, it is seeking major investments for infrastructure and industry development in the underdeveloped northern region.
China has been urging Australia to join its One Belt One Road (OBOR) strategy, which industry experts believe would happen soon.
It is considered a big boost to its plan, if Australia would tap into OBOR projects, according to Infrastructure Partnerships Australia chief executive Brendan Lyon.
"We want to be part of that supply chain," Lyon said, referring to Australian companies pitching for construction, finance and engineering contracts on the Silk Road.
Other roadblocks
Another challenge to the strengthening of the Sino-Australian relations is how to treat Chinese investment.
In addition to this, Australia failed to ratify the extradition treaty with China as Turnbull failed to get Parliament's vote on the pact that had been signed 10 years ago.
Meanwhile, delegates at China-Australia business forum discussed the approach on Chinese investment and potential Chinese businesses in Australia. Although Australia sees the need for overseas funding, they looked at Chinese-led bids as security risks. This brought back the rejection of bids from Chinese state-owned investors in electricity network Ausgrid and cattle empire S. Kidman and Co.
