Moreover, with a relatively small population (about 25 million), Australia cannot meet its capital needs domestically, and has long-relied on foreign capital flows to support its advanced G20 economy. China is still a comparatively small investor in Australia, but is among the fastest-growing. And it holds out enormous potential as a future investor in areas such as agriculture, real estate, and possibly infrastructure.
Australia will nevertheless be keen to strengthen its ties with others in the region, in part to balance against China’s rising influence and in part to hedge against an uncertain American presence in the region. Relations with Japan have the best potential—Japan is already one of Australia’s most important trade and investment partners, and the two sides have been taken steady, if tentative, steps to bolster their security relationship, including through defence-industrial cooperation.
In another example of deepening Australia-Japan ties, in November 2018 the Japan Bank of International Cooperation (JBIC), the Australian Export Finance Insurance Corporation (EFIC), and the US Overseas Private Investment Corporation (OPIC), signed a joint agreement to cooperate in financing infrastructure and other development projects in the South Pacific and Southeast Asia.
So, while seeking a continued constructive relationship with China, Canberra will look to strengthen other partnerships with like-minded countries in the region such as Japan and India—but will not do so in ways that might put ties with China at risk.
Copyright : SAEED KHAN / AFP