Rethinking its identity will help Australia gain correct understanding of China’s rise

Australia needs to rethink the role Chinese investment plays in its economy, an Australian official has said.

“Chinese investors are boosting their stakes in Australian property and infrastructure, stoking concerns about the world No.2 economy’s influence Down Under,” but the country “needs such capital for its economic development,” David Irvine, the chairman of the Australian Foreign Investment Review Board, was quoted as saying in a Bloomberg report on Thursday.

Australia has been the world’s second-largest recipient of Chinese investment since 2007, a report by KPMG and the University of Sydney showed last year. Fears of increased Chinese influence have led Australia to tighten restrictions on Chinese entities buying electricity infrastructure and other assets.

Irvine’s remark showed some members of the business circle in Australia have begun to feel a chill about Chinese investment. Australia is a country where foreign investment is crucial to prosperity.

A small population inhabits a vast land, so the country has always relied on overseas capital to fill the gap between domestic savings and the need for investment.

China is a major source of foreign direct investment into Australia, with a reported 73.3 percent increase in the first three quarters of 2017.

China has become enormously important to Australia’s investment-dependent economy. As Australia transitions away from a natural resource-oriented economy, it is well-placed to benefit from the boom of China’s investment in areas like infrastructure, real estate and tourism.

Investment from China delivers significant benefits to the Australian economy. However, while expanding cooperation in trade and investment with China, Australia is tending to deepen political and security cooperation with the US. It seems it’s not easy for Australia to break the shackles of its old ideas, under which it sees itself as a member of the Western camp going against developing countries like China.

Australia is one of the largest beneficiaries of the Chinese economic miracle, but it feels uneasy about China’s rise. Although Asia has provided significant export markets for Australian commodities, which tie the country closely to the Asian industrial chain, Australia has yet to build up its status and cultural identity with Asian countries.

The Australian government seems to be poorly aware of how important it is in economic terms to strengthen relationships with Asian countries like China.

But if Australia can identify itself as a nation that is involved in Asia’s industrial chain, instead of a member of the Western camp located near the Asian economic circle, Australia will finally gain a correct understanding of China’s rise.