China

Tensions between Australia and China simmering throughout the pandemic have reached something of a flashpoint, with Beijing’s ambassador warning of a potential consumer boycott of Australia. 

Cheng Jingye, China’s ambassador to Australia, told The Australian Financial Review that the Morrison government’s push for a global inquiry into COVID-19 would be met with resistance in Beijing.

He suggested Chinese consumers might respond by not pursuing tourism and higher education in Australia.

While some in national security and academic circles have sounded the alarm about Australia’s economic dependence on China, a serious boycott by consumers or the government would have pretty disastrous consequences for the Australian economy.

But just how likely is it to happen? 

A relationship too big to fail

China accounts for a quarter of Australian exports, trade that is worth $153 billion. The economic hit of even a partial, consumer-led boycott could be devastating. 

The higher education sector would be hit early and hard by a Chinese consumer boycott. Australian universities have been dependent on Chinese student money for some years now. According to a report compiled by University of Sydney associate professor Salvatore Babones, Chinese students’ course fees accounted for between 13% and 23% of several major universities’ total revenues.

The early days of the COVID-19 pandemic provide a bleak snapshot of what a crash might look like. Universities Australia chair Deborah Terry says the sector is set to lose 21,000 jobs over the next six months, with revenues cut by up to $4.6 billion, even with a government assistance package.

If Chinese students stop coming altogether, those numbers could become long-term trends.

Tourism could also be threatened by a consumer boycott. Australia welcomes 1.4 million Chinese tourists a year, who spend nearly $12 billion. And if Chinese people stopped buying Australian beef, as Cheng suggested, our agricultural sector would struggle as well — 25% of Australia’s agricultural exports, worth $11.8 billion, go to China. Last year, the country became the largest market for Australian beef, with demand rising 84%.

Could it even happen?

Economist Jane Golley, who is executive director of Australian National University’s Centre on China and the World, notes that while the ambassador suggested consumers might boycott Australian goods, this wasn’t a directive from Beijing.

It’s unclear whether such a boycott is in the interests of Chinese people or the government. In the higher education sector, for example, there is still evidence that Chinese students still want to come to Australia, something which is also in Beijing’s interests. 

“Sending their students abroad to get the highest quality global education is a part of their mission to be a highly-education, high skilled, modern, advanced country,” Golley tells Crikey. 

“Chinese people still want western education, and still want to come to sunny beautiful places.”

And despite China’s power, and the government’s displeasure with Australia’s criticism of its handling of the pandemic, our economies are still co-dependent. Even with the country’s moves towards green energy, China still needs Australian coal and iron ore. Australia continues to supply 40% of China’s liquefied natural gas.

And while the pandemic has furthered calls for Australia to “rethink” its relationship with China, the reality is that alternative markets just aren’t there yet — India’s growth rate is crawling, other Asian economies like Thailand and Malaysia are heading into recession. 

All up, a fundamental shift in Australia’s economic relationship with China is unrealistic and potentially dangerous, something both Beijing and Canberra know.

Instead, it is perceptions of growing anti-Chinese sentiment reflected in government and media reporting, rather than an order from the CCP, that Golley fears could deter visitors.

“If you picked up an Australian newspaper on any day of the week, would you choose to come here?”