By Su Tiping

  At the tipping point of China-Australia relations towards a new Cold War after Australia's push for an inquiry into the origins of the COVID-19 pandemic, Australian Prime Minister Scott Morrison says the nation's trade relationship with China is at an all-time high. He admitted that China-Australia relationship was currently frayed, but said China was buying more than ever on the back of surging iron ore prices. He added that Australia's performance is what drives the trade.

  Australia is the world's largest coal exporter, the second largest iron ore exporter, the third largest aluminium and nickel ore exporter. In addition, it is also the third largest gold exporter in the west behind the United States and South Africa.

  China takes 82.2 percent of Australia's exports and is also a major supplier of funds to develop Australian mines. So far this year, Australian exports of iron ore and liquefied natural gas to China have increased by eight percent and nine percent respectively year on year, according to Wood Mackenzie. China's coal imports from Australia also far exceeded the levels before the pandemic. Australia's energy and natural resources exports to China have been booming.

  Australia's exports to China increased year-on-year in the first five months of 2020, mainly through iron ore sales. Despite the COVID-19, the complementary nature of Australian and Chinese economies has not disappeared, nor has China's interest in buying goods and services that Australia is good at producing.

  This may be the reason that Prime Minister Morrison claims the trade relationship with China has been never stronger, which is driven by Australia's performance.

  Then, how is Australia's performance? It takes the lead in resisting Huawei 5G, pushing for an inquiry into the origin of the COVID-19 pandemic, intervening in the dispute over the South China Sea with its frigate forcing its way, denying China's claim to disputed islands and landforms, directing its goal of strategic confrontation at China in the newly revised 2020 Defence Strategy Update and Force Structure Plan and others.

  All the actions and performances reflect the Australian government is too close to the United States. Even if some actions were initiated by Australia, they are to cooperate with the United States to contain China.

  With these performances and the increasing export of iron ore to China, Scott Morrison feels self-confident and may believe China is relying on Australia more than the other way round and has no alternative but to rely on it so that China can be crushed and bullied.

  If Australia continues to be economically dependent on China and strategically follows the United States against China, the Chinese people will feel disgusted and China might turn to other markets.

  On the one hand, due to the significant changes in the "iron ore settlement mode," China's relevant enterprises have successively reached an agreement with Australia and Brazil that "Chinese yuan can be used to settle iron ore," and have begun to implement it, which has promoted "active cooperation."

  On the other hand, China's economy is the first to recover from the pandemic. But Australia should not be too optimistic, because Brazil is also rich in iron ore resources. In order to increase cooperation with China, one of its most influential iron ore companies signed a cooperation agreement with China and generously handed over the pricing power of iron ore.

  Meanwhile, China has recently signed a 2.35 billion U.S. dollars iron ore mining contract with Denmark, which some experts say may block the supply line of raw materials from Australia. China's search for a new partner to supply iron ore from Denmark is undoubtedly a huge potential threat to Australia's iron ore export; for China itself, this cooperation is also conducive to getting rid of its dependence on Australia and other major mineral powers.

  China is the world's largest consumer of iron ore, and is heavily dependent on Australian iron ore, which is vital to the Chinese economy; but Australia is not irreplaceable. While China could trade African iron ore for Australian iron ore, it would take four to five years to mine African iron ore, but once this transition is completed, Australia's status as a supplier of iron ore to China will be lost forever.

  China has reduced imports of iron ore from Australia, and if Australia continues its anti-China agenda, other industries may also be affected, such as coal.

  Australia should not misunderstand China's goodwill to increase its purchase of iron ore, and it should not try to curb and suppress China on the one hand and obtain high economic benefits from China on the other.

  The essence of China-Australia relations should be win-win. Both sides should be committed to non-conflict, non-confrontation, mutual respect and win-win cooperation, and jointly promote China-Australia relations with the keynote of coordination, cooperation and stability.

(Note: Su Tiping is the director of Australian Studies Center at Xi'an International Studies University. The article reflects the author's opinion, and not necessarily the views of CGTN.)

From:https://news.cgtn.com/news/2020-07-28/Does-Australia-need-China-more-than-the-other-way-round--SuHv0QbG92/index.html#