Bates Gill and Linda Jakobson on why Australia must reshape links with China. Source: The Australian

Bates Gill and Linda Jakobson on why Australia must reshape links with China. Source: The Australian

Australia must reshape links with China

4 April 2017

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Professor of Asia-Pacific Strategic Studies

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The week’s events aside, Australia and China have never had such a promising relationship as today. Chinese tourists are the largest group of visitors from abroad and the biggest foreign spenders in Australia. Up to 90 direct flights arrive in Australia from China every week, with more to come. China is the largest buyer of Australian wine. Nearly one-fifth of Chinese students abroad choose Australia as the place to pursue their studies. Australian exports meet 54 per cent of Chinese demand for iron ore.

But Australia’s future prosperity will depend heavily on an economic relationship with China that is markedly different from today’s. The lucrative days of dependence on simple transactional relations — dropping off the goods at China’s doorstep — are behind us. Resource exports will remain important, but a new model of economic engagement is required. Australians need to respond to the demand in China for a wide range of services.

Australia also needs to entice much more investment from China. The change is under way, with Austrade reporting that export of services to China rose from $7.1 billion in 2013 to $10.7bn last year. Services exports to China exceed the value of our iron ore exports to Japan and South Korea combined.

But there is an even greater upside ahead. Research conducted by the Brookings Institution estimates that by 2030 the Chinese middle class will have grown by 850 million people. As China’s demand for services and consumer goods increases, the trade relationship will become more reliant on people-to–people contact and the Australian brand.

With the China-Australia free trade agreement in force, the two countries will have greater access to each other’s economies. That is good news, but far more needs to be done to improve Australian competitiveness in services.

The Australian tourism sector is unprepared and will struggle to make the most of it. Language ability, cultural awareness and greater understanding of Chinese expectations are needed. If perceptions grow within China that Australia cannot absorb the rising flow of tourists and provide a valuable experience, those travellers will look elsewhere. Some Chinese tourists complain about a lower standard of accommodation and infrastructure than in many other holiday destinations in the region.

Australia ranks far down the list of preferred destinations for Chinese visitors on package tours, behind countries such as Vietnam, Indonesia and Russia.

Australians should not presume that Chinese-Australians can fill all the roles that require China conversancy and Mandarin proficiency.

A lack of enthusiasm among most Australians to learn Mandarin holds the country back. In 2015, 4000 Australian students graduated from Year 12 with Chinese-language qualifications, roughly 0.1 per cent of the total number of primary and secondary school students, and a mere 400 of those were not of Chinese heritage. The number of non-Chinese background pupils studying Mandarin at Year 12 declined by 20 per cent between 2007 and 2015.

Chinese also represent by far the largest proportion of foreign students in Australia. For this to continue, educators will need to do more to ensure Chinese students return home with a high-quality degree, a positive experience and an affinity for Australia. At present many, if not most, of these students have little contact with Australian society. Government surveys reveal that Chinese students’ satisfaction with opportunities to interact with Australians is consistently almost 10 per cent lower than the rest of international students in Australia.

Read the full article by Bates Gill and Linda Jakobson on The Australian.

Updated:  23 March 2016/Responsible Officer:  Su-Ann Tan/Page Contact:  CAP Web Team