The Impact on Australian Political Economy from Chinese Investment into Australia’s Mining Industry

For much of the 1970s to the beginning of the twenty-first century Australia and China have enjoyed solid diplomatic and economic relations as China focused on its own internal economic reforms. More recently (particularly the past five years, 2006 to 2010) the dynamics of the relationship have taken on a far more complex political nature. China increasingly requires natural resources, of which Australia is a major supplier, for domestic consumption and to feed its massive export-oriented sectors, and as a direct result Australia’s own political economy has increasingly come to see China’s need for resources as essential to its own future national prosperity. Despite the political difficulties that have arisen in the relationship during the recent past, the sheer scale and growth of China’s investments, particularly in the resource sector, make it clear that pure mutual commercial interests are driving contemporary relations. In the first two years of the current Labor government (2007–09), over $40 billion worth of Chinese investment was approved (Hewett, 2009d). This was on the back of a resource investment boom under the John Howard coalition government (1996–2007), which enabled it to deliver ever-increasing budget surpluses throughout its time in office. Even so, while Chinese enterprises have significantly expanded their Australian resource investment, this must be kept in context as British, American, Japanese and South Korean enterprises today continue their historical dominance of Australian natural resource exploitation.