On August 16, the Australian Financial Review published an article entitled "Australia's economic destiny depends on China, not the United States", written by James Lawrence, associate dean of the Institute of Australia-China Relations at Sydney University of Science and Technology. The article is excerpted as follows:

Ask the average Australian whether Australia's most important economic partner is China or the United States, and you may see the other person looking at a loss-China, of course. According to the Roy poll, in 2013, 76% of Australians thought China was the number one economic partner, while only 16% chose the United States.

In fact, this year, 43% of Australians believe that overall, the relationship with China is Australia's most important relationship. The same proportion of people choose the United States, Australia's security ally.

Over the past 12 months, China has bought A $95 billion worth of Australian goods, eight times more than the US. It has become clear recently that China also has a huge appetite for Australian services-A $11 billion in the last 12 months.

Earlier this week, however, a new report from the American Research Center made the following point: no country plays a more important role in the Australian economy than the United States.

The study correctly highlights the benefits of investment between Australia and the United States. As the report points out, the stock of US investment in Australia is A $860 billion.RMB), 10 times more than China's investment in Australia.

However, this is a far cry from the conclusion of the Australian people.

Indeed, the stock of American investment in Australia is much larger than that in China. But this is a number that has accumulated over decades.

As Chi Lang Armstrong, an economist at the Australian National University, pointed out in 2014, a more reasonable way to measure the relative importance of the economy is to add investment flows to trade flows in a particular year, rather than the accumulated investment stock.

In 2016, Australian trade and investment flows to China were A $178 billion. Trade and investment flows with the United States are not only small, but also negative, or minus A $27 billion. Trade with China last year, as usual, was greater than that with the United States. But US investors pulled A $66 billion more out of Australia than they invested in Australia, while Australian investors reduced their dollar holdings by A $25 billion.

In addition to the overall size of trade and investment flows, another key difference is that there are often other alternatives to US investment.

Many big Australian companies do often go to New York to raise capital. But London, Brussels, Tokyo, Hong Kong and Singapore will all welcome Australia to do business with them.

In contrast, there is often no substitute for Chinese demand. Consider the following dilemma: if Chinese steelmakers no longer need Australian iron ore. No other country or organization can absorb 650 million tons of iron ore like China.

In 2014, then US Secretary of State Hillary Clinton warned Australia not to put all its eggs in the Chinese basket. Malcolm Turnbull, then communications minister, quipped: "I am sure we are happy to export large amounts of iron ore to the United States, but they have never shown any enthusiasm for buying." "

Recently, an independent economic model showed that Australia could lose as many as 500000 jobs if China's growth rate fell below 3 per cent from this year's target of 6.5 per cent.

China is also Australia's growth market, buying more Australian natural resources such as iron ore and LPG than ever before.

The middle class in North America and Europe is expected to remain stagnant between 2009 and 2030, while China's middle class will grow by 850 million. By 2030, China will account for 22% of global middle-class spending, three times that of the United States.

China has replaced Japan as the world's second largest source of new foreign direct investment.

China's growing economic clout is reshaping the strategic balance of power in the region. Australia's relationship with the US is a valuable asset for both countries in the face of these changes, but the pursuit of Australia's national interest means accepting the fact that Australia's most important economic relationship today is with China. (compiled / Qiu Fang)