It's been 45 years since China and Australia established diplomatic relations.

Since then, things

have changed a lot.

Throughout all these years, both countries have maintained one the most fruitful, controversial

and interesting relationships in the entire planet.

A relationship based on stories about money, spies, accusations, infidelities and many,

but many conflicting interests.

Because, in all honesty, if we were talking about a relationship between two people instead

of two countries, we'd have a great script for a Latin American telenovela.

But obviously, this is VISUALPOLITIK, so... to the point.

Today, China is this country's main commercial partner.

Their purchases represent about a third of all Australian exports, 8 times more than

exports to the US.

See, in 2015 China and Australia signed a free trade agreement and today their trade

relations exceed 155 billion dollars per year.

And not only that, China is also becoming an increasingly important investor in Australia,

a country where 1 in 20 people is Chinese; among them many millionaires who decided to

find a safer place with more guarantees for their assets and lives.

(Such is the scale of trade that financial markets have long been of the view that the

Australian dollar is one of the best proxies for bets on China itself.

James Laurenceson, Deputy Director of the Australia-China Relations Institute, University

of Technology, Sydney.)

Of course, this all has consequences.

We already talked about it, here in VISUALPOLITIK.

Australia has broken all records and has not known a crisis for almost 30 years.

Sounds amazing, right?

Well, in all this success, the great Chinese takeoff had a lot to do.

Therefore, it's easy to understand why when the Lowy Institute, an important Think Tank

in the country, asked Australians last year which relationship was more important to them,

the one with the United States or the one with China, it was a tie.

Even when their relations with their North American friends are very close.

However, in spite of this romance, the fact is that 2017 was not a year of love for Australia

and China.

Check out what Bob Carr, former minister for foreign affairs of Australia, said on the

subject:

( “This year, Australia declared rhetorical war on China.

The words being used by Australian leaders are the harshest any time since diplomatic

relations commenced in 1972, with the exception of comments at the time of the Tiananmen crackdown.

The tone is harsher than that of any other US ally, including Japan.”

Bob Carr.)

As you can see, 2017 was a very difficult year for both countries' relations.

So much so that a survey by the Global Times, one of China's most popular newspapers,

determined that Australia was the most hostile country to China in 2017.

And the truth is that, with Trump in the White House, those are big words.

But what the hell happened?

What has led to so much dissension between Canberra and Beijing?

Well, let's see.

(THE STORM)

In fact, at first, 2017 seemed like it'd be a good year for Chinese in Australia:

economic relations wouldn't stop growing;

Trump, showing off his best diplomatic skills, hung up on the Australian Prime Minister Malcolm

Turnbull himself, further sinking his popularity in this area of the world;

and the Australian government even publicly supported China replacing the United States

as a main member of the failed TPP, the Pacific free trade agreement.

We could almost say that, in telenovela terms, love was about to succeed.

However, calm… didn't last long… and everything started to go wrong halfway through

the year.

Really wrong.

Yes... they'd had some clashes before, but nothing major.

In recent years, the Australian government has followed a strategy that basically consisted

in trying to balance their position between Beijing and Washington.

In economic matters... it was all Beijing, and in security and defense matters...

Washington, of course.

We already mentioned here, in VISUALPOLITIK, that Republicans consider Australia to US's

best ally.

As it should be:

Australia is the only country that intervened in every major US war, and for years their

military relations have been so tight that Australia has become the US's spearhead

in this area of the world.

The Australian Prime Minister himself has shown his great appreciation for the United

States:

(“The peace and stability of our region has been enabled by consistent US global leadership.

While that leadership would not have been possible without the hard power of fleets

and armies, its greatest potency has come from the values which it embodies.

Through all the twists and turns of history, the United States has stood for the values

on which its great republic was founded: freedom, democracy and the rule of law”.

Malcolm Turnbull)

But... back to the Chinese matter… see, these words were pronounced on June 2, 2017.

That was the first time that an Australian Prime Minister spoke so clearly in favor of

Washington in a speech, which was also full of warnings

to China.

And then, just 8 days later... the media storm broke out.

Several media reported on a single story:

The Australian Intelligence Agency was making very serious warnings about the Chinese government's

intentions to influence Australian politics through various means, including purchasing

politicians, journalists and scientists; or the surveillance and intimidation of citizens

belonging to the Chinese community in Australia.

The scandal was unleashed.

Suddenly news started to emerge on the collaboration Australian universities and scientists with

Chinese military contractors or former politicians, such as the former Trade Minister Andrew Robb,

who now work for companies controlled by the Chinese government in exchange for juicy salaries

that amount to hundreds of thousands of dollars.

And of course, the Australian security services' fear on Chinese espionage isn't new....

Various Australian governments have been blocking Chinese corporate operations for years, and

have also banned companies such as Huawei from participating in deploying a national

broadband network.

This is all precisely because of a fear of espionage or excessive Chinese influence.

However, despite everything, controversy and tension had never gone this far.

(“Media reports have suggested that the Chinese Communist Party has been working to

covertly interfere with our media, our universities and even the decisions of elected representatives

right here in this building, in the Parliament . Malcolm Turnbull)

On December 12, 2017, Sam Dastyari, Labor Party Senator and one of the most promising

political figures in the country, was forced to resign because of his ties to China.

Among other things, he was accused of receiving money in exchange for speeches that favored

the Chinese government's interests and even of having alerted a Chinese businessman linked

to the Communist Party that he could be being investigated by the country's intelligence

agencies and that his phone could be tapped.

Well, scientists collaborating with Chinese military contractors, university infiltration,

paying journalists, buying politicians... these accusations ran since the beginning

of June...

The Australian government denounced it publicly and began modifying its legislation on espionage,

treason, immigration and on financing political parties... and this, my friends, looks like

it's just the beginning.

The consequences of these cooling political relations can be seen, for example, in foreign

policy.

For example, we can clearly say that in 2017, Australia has been favoring the US like never

before.

But, don't think that this position has been unanimous among the political class,

not at all…

( “The government doesn't seem to understand the economic importance of the relationship

with China or the strategic issues involved [...] “We are putting all of our faith in

our relationship with China through the foreign policy lens of the US.”

Paul Keating, australian former prime minister)

And my friends, you know what?

Given the circumstances, I think that this entire debate on the position Australia should

take before China is quite understandable:

On the one hand, many critics affirm that there isn't enough evidence of the Chinese

interference that the government denounces.

Some even say that this is all a political operation fed by Washington.

On the other hand, “breaking” with China – or at least being this forceful with the

Beijing government – isn't exactly easy for Australia.

Why?

Check it out.

(CHINA DEFENDS ITSELF)

Throughout this entire political crisis, China has been very strong:

of course they have denied all accusations and have even said that this entire campaign

is based on racial prejudice and a clear anti-Chinese paranoia.

A paranoia they have claimed is turning into a clear hostility towards the Chinese community

itself:

(Chinese diplomats warn students in Australia to stay alert to safety risks after spate

of attacks” South China Morning Post.)

Yes, this type of messages may seem exaggerated, especially because the truth is that beyond

a few posters in some university or other, there seems to be no evidence of this acclaimed

danger...

but, given that on the one hand this claim shows us how things are; on the other it is

a kind of warning, because, clearly, it isn't good publicity.

Allow me to explain myself.

Chinese students account for 4 out of every 10 foreign students in Australian universities,

and spend 18 billion dollars in the country every year.

Yes, you heard that right.

It seems like Xi Jinping's government wants to make it very clear that it is willing,

if necessary, to play in economic terms as a pressure measure.

Something that, by the way, they used recently with South Korea and Taiwan.

And we aren't only talking about students, but also about tourists or investors.

For example, in recent years the luxury sector has experienced a huge economic boom in Australia.

Do you know why?

Listen up:

(“Students, tourists and Chinese residents in Australia are responsible for up to two-thirds

of all luxury retail sales in Sydney and Melbourne.”

South China Morning Post.)

Want another example?

China's direct investments in Australia have multiplied, not by 10 or by 20, but by 32

in just 9 years.

By 32!

So, as you can see, slowing down this entire process could translate into a lot, and that

is a lot of pain for the Australian economy.