Significance of China-Australia FTA
- By Zhang Jingwei
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E-mail China.org.cn, November 26, 2014
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Chinese President Xi Jinping and Australian Prime Minister Tony Abbott after their signing of the free-trade agreement. |
The China-Australia Free Trade Agreement (FTA) reached after the G20 summit is more significant than the FTA between China and South Korea completed during the APEC summit: it has both strategic implications and benefits for ordinary citizens.
Chinese President Xi Jinping attended the G20 summit in Brisbane and paid a state visit to Australia. The relationship between China and Australia was upgraded to a comprehensive strategic partnership, the core of which is the FTA. During the global financial crisis, China's 4 trillion yuan stimulus package induced a huge demand for Australian resources that helped prevent Australia from suffering more substantially from the crisis. But after the crisis, the downward pressure in the Chinese economy has also exerted some negative influence on the Australian economy.
It is clear from these trends that China and Australia share the same economic destiny. When it comes to geopolitics in the Asia-Pacific region, the United States, Japan and Australia have established a close political and military alliance, known as the NATO of Asia, that is mainly aimed at containing China. During the G20 summit in Brisbane, the three countries even held a closed-door meeting about their approach to China.
But Australia is far more mild toward China than the U.S. and Japan are. The U.S. and Japan are trying to contain China geopolitically (the Pivot to Asia strategy), to isolate China economically (the Trans-Pacific Partnership, or TPP) and to turn away from the Asia Infrastructure Investment Bank and the Free Trade Agreement of the Asia Pacific, both of which were initiated by China. Given the facts that the agreement has been reached after nine years of negotiation and that that Australia is likely to join the AIIB, the country is serving as a buffer in the strategic game that China, the U.S. and Japan are playing with each other. Thus, the conclusion of FTA negotiations between China and Australia will help cool simmering geopolitical tensions in the western Asia-Pacific region and alleviate the West's concerns about China's growing power.
South Korea and Australia, two of the three U.S. political allies in the western Asia-Pacific region, have already concluded their FTA negotiations with China. Since they are important members of the U.S.-initiated TPP, their FTAs with China will help the latter overcome the economic and trade containment created by the TPP, enhance interconnectivity in the Asia Pacific region, and smooth the way for the more ambitious FTAAP.
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