As hard as this might be for some Australians to accept, China isnt a threat to the economy, its a lifeline, perhaps even a hostage rescue.

This month, Australia finds itself at a fork in the road. Premier Li Qiangs visit really could be the best thing to happen to Australia, leading to more investments, more trade and more global growth in partnership with the developing world. Or, it could instead reveal an Australian elite taken hostage by the US, who decides to restrict Australia’s relationship with China against its own national interests.

As a result of a great deal of misleading media, many people in Australia now view China negatively. It is considered either increasingly hostile, increasingly influential or increasingly belligerent, but there isnt a single mainstream media outlet which provides an accurate description of what China is to Australia, an increasingly important trading partner.

There can be no getting away from it, China is increasingly influential Africa, Latin America, ASEAN, RCEP members as well as BRICS and BRI are all indicators of this. Interestingly, none of those countries see China as hostile or aggressive yet, through its influential media, think tanks and even political rhetoric, Australia does.

Australias choice this month is critical; work with China or dont. The status quo isnt working out well with Chinese investments falling. At the very least, China is the second largest economy in the world, by some measure, the largest; its also growing while others are receding or stagnating. This cant be ignored but more importantly, Chinas trade with the developing world is growing significantly too; Australia has resources, minerals, fuels and expertise that those countries need.

According to the World Bank, Global climate and environmental concerns, cant be addressed without China; global growth in developing nations cant be achieved without China; and Australias economic future, if it is to avoid becoming a third world nation, is totally dependent upon Chinas involvement and China clearly wants Australia to be part of this.

Yes, there were some headaches but putting lobsters aside, those headaches have been resolved we could argue and debate whether China was right, wrong, too aggressive or Australia was too impolite to its largest trading partner but we can put them aside as they are now all addressed and look at the reality of Australias relationship with China.

Some Australians think China is a threat as its poised to invade Taiwan, I disagree, China has made no plans, no announcements and no threats, but the US intelligence community believe it might happen. CIA Director William burns said, without offering any explanation, that he has intelligence that this may occur before 2027.

We can come back and debunk this in 2028 but, lets assume for a moment that his intelligence is correct and China does invade, blockade or in some way forcibly take over the island province. How does that affect Australia?

Taiwan is Australias 9th largest trading partner with 33.6bn in two-way trade. Even if the Peoples Republic of China is in charge there, that wont change, Taiwan will still purchase and consume Australias coal, gas, iron ore and beef, so it shouldnt be a problem for Australia. Paul Keating pointed out that Taiwan is not of vital interest to Australia. Australia even recognises Taiwan as part of China! The official policy of Australia is adherence to Chinas One China Policy and recognises China in the United Nations as the One China, with Taiwan as part of it.

Heres something else we dont know because mainstream media wont tell us but if we look, we can find it on the DFAT China page: in 2023, Australias trade with China GREW by 9.2%. Two-way trade with Australias largest trading partner is now $326bn; 10 times that of Taiwan and the US. No doubt Premier Li will be reminding his hosts that this is the case.

If we ignore mainstream media and look once more at DFATs pages, we find something else that mainstream media consumers wouldnt expect to see in an official Australian government page: Hong Kong, enjoys a high degree of autonomy, Hong Kong is Australias 15th largest trading partner and Hong Kong is a Chinese city.

Many commentators described AUKUS as Australias last most important decision and one which indicated that Australia has made its choice. Australia was allowed to pick either USA as its security partner, or China as its trading partner and it chose security.

I disagree, the decision comes now, Australia will hope to maintain a good relationship with China and China will be happy to grow that relationship but, as John Mearsheimer pointed out, the USA will not allow Australia to choose China for trade and US for security.

If were looking for real risks, here are two:

• the US, which sits at Number 5 on Australias list of trading partners is only 10% of Australias total exports and imports and cannot replace China as a major trading partner. As it stands right now, no other country in the world can;
• The US holds controlling shares in banks, retail, agriculture, minerals and resources as well as many other facets of Australian life. If thats not a worry, then nothing is.

China holds less than 2% of all foreign owned assets and is declining theres no doubt China wants more but with USA and UK holding 46% of all foreign owned assets, there needs to be some changes and thats what Premier Li will be seeking.

Realistically, Premier Lis visit is a great chance for a reset. The consequences of choosing US security over Chinas trade, is the potential loss of about 30% of all international trade. It may be true that Australia will gain an enhanced perception of safety from a perceived threat but, without China as their major trading partner, there will be very little left to secure; if theres very little left to secure, the US investors will need to look at returns on Australian investments and, if they do that, it could mean a death spiral for Australias economy.

As hard as this might be for some Australians to accept, China isnt a threat to the economy, its a lifeline, perhaps even a hostage rescue!