US, UK may not see the world as Australia does
The Chinese will be second behind the Indians in at least Melbourne and Sydney; a fact that Australia’s defense hawks should keep in mind when predicting war in three, 13 or 30 years’ time. No Australian leader should ever repeat the mistake Scott Morrison – the father of AUKUS – made when he needlessly alienated loyal Chinese Australians during his shouting matches with Beijing.
The US and Britain will also rely on migration for the majority of their population growth in the future, but they are decades behind Australia’s diversity. Barely 30 percent of American or British people were born overseas or currently have at least one migrant parent.
Britain is the weakest link in the AUCUS chain, economically and diplomatically. The reason is Brexit. The latest data from the World Bank confirms that both the European Union and Britain are the poorer for it. China’s economy surpassed that of the European Union in 2021 – the year of formal separation under Brexit – while India’s economy overtook Britain’s to become the world’s fifth largest after the US, China, Japan and Germany.
The gap between the US and China continues to narrow. The latest figures show the US accounts for 24.2 percent of the world economy, while China has 18.4 percent. This replicates the state of affairs in the mid-1990s when the US accounted for 24.6 percent of world GDP and its challenger at the time, Japan, had 17.9 percent. It was the closest the Japanese came before their long stagnation.
Will China overtake the US, or suffer a version of Japan’s fate as its population ages? If it’s the latter, the next number two behind the US would be India, which is now the world’s most populous nation, and with a much younger demographic than China.
Either way, the US has recovered the ground it lost during the global financial crisis and recession. But the twist here is that America’s resilience does not necessarily benefit Australia in our trade disputes with China.
Remember the sanctions Beijing imposed on us after the Morrison government called for an investigation into the origins of the coronavirus in 2020. The then prime minister used the G7 meeting in Cornwall in June 2021 to rally Western leaders for our economic defense. Morrison shared the list of 14 grievances that the Chinese embassy in Canberra said must be addressed before relations can return to normal. The G7 furiously agreed that we must continue to stand up to the bully in our neighbourhood.
As Morrison told journalists after the meeting, “There is not a country that will sit around that table that will (agree to) concession(s) on any of those 14 points.” The idea for AUKUS was also discussed on that trip, during Morrison’s trilateral meeting with US President Joe Biden, and then British Prime Minister Boris Johnson.
One would have hoped that the US side would connect the dots and demonstrate their solidarity with Australia by helping our exporters access new markets to replace those the Chinese have closed. Unfortunately, we were left to navigate the turbulent waters of coercion without the support of our ally.
The good news is that we did manage to reduce our economic dependence on China over the course of 2020-21 and 2021-22 without US aid. Exports to Japan rose 66 percent; to South Korea with 76 percent; India with 80 percent and Taiwan with 84 percent.
But exports to the US fell 2 percent. The irony is that our sales to China actually increased by 7 percent over this period as increased demand for our iron ore, gas and gold made up for the loss of markets for coal, wine and barley. The data just published by the Department of Foreign Affairs and Trade is subject to revision. But it’s a reminder of the power imbalance within AUCUS: When Australian and American interests collide, the Americans will always look out for number one.
The question for the present and future is, can Australia trust the US to see the world as we see it? If not, will we have the courage to stand up for our interests and even break with our history of military dependence by pushing back against an American call to arms?
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