Australia’s escalating tensions with Beijing have shown up its reliance on Chinese trade and propelled a push to increase links with Asia’s other giant economy, India.
New enrollments of international students from India expanded 32 percent last year from a year earlier and it is the fastest-growing major market for Australian services.
India has overtaken China as the largest source of net migration to Australia, and its diaspora is the third-largest Down Under, just behind China and the UK.
India’s swelling population — set to overtake China’s in 2027 — suggests ongoing opportunities for Australia to diversify a trade portfolio that currently makes it the developed world’s most China-dependent economy.
The need to switch things up has accelerated as ties sank to their lowest ebb in 30 years after Canberra’s calls for an international inquiry into COVID-19’s origins was taken by Beijing as a political attack, with China imposing barriers on barley, beef and wine from Australia.
This has Canberra looking to its democratic, cricket-loving ally to fill the void.
Australian Prime Minister Scott Morrison held a virtual summit with his Indian Prime Minister Narendra Modi in June, and the two signed a defense agreement and upgraded ties to a comprehensive strategic partnership.
The trade ministers of Australia, Japan and India have also agreed to work toward achieving supply chain resilience in the Indo-Pacific.
“We can sell India education, healthcare, and there’s potential in science and technology,” said Ian Hall, a professor of international relations at Griffith University in Queensland. “It’s much more the consumer market of India’s growing middle class than goods.”
Yet trade with India has its own challenges. Its government is wedded to economic nationalism, as showcased last year when it pulled out of the Regional Comprehensive Economic Partnership designed to free up trade.
Delhi wants to send lots of people to Australia on work visas and does not want to reduce tariffs, former Australian minister for trade and competitiveness Craig Emerson said.
“India is highly concerned about its trade deficit,” said Lai-Ha Chan (陳麗霞), a political science lecturer at the University of Technology in Sydney, adding that after signing free-trade agreements with South Korea and Japan, India’s trade deficit with those nations ballooned.
Australia’s most valuable export — iron ore — has not been caught in China’s crosshairs yet, perhaps due to a lack of alternative suppliers.
Yet Beijing appears to be giving itself greater flexibility, with Emerson saying that China is buying ore carriers that improve the economics of long-distance shipping from Brazil and purchasing mines in Guinea.
“It’s entirely possible China, once it gets all three mineral provinces in a row — Guinea, Brazil and Australia — will play one off against the other to get a better price,” Emerson said.
RESTRUCTURING: Taichung and Taoyuan profited most from local firms moving back high-end manufacturing amid the US-China decoupling of trade ties, the ministry said The government’s “Invest in Taiwan” initiative might this year see NT$627.1 billion (US$21.7 billion) of investment pledges realized, with several firms raising stakes and two dropouts due to customer losses, Minister of Economic Affairs (MOEA) Wang Mei-hua (王美花) said yesterday. Wang made the statement at the monthly meeting of the Third Wednesday Club, a local trade group featuring the top 100 firms of each business sector. Since early last year, the government has launched three programs intended to help local companies grapple with US-China trade rows and the COVID-19 pandemic, mainly through moving production lines back to Taiwan. Thus far, the ministry
JOBS AT RISK? Most Cathay Dragon routes are to be operated by Cathay Pacific or a subsidiary, but it was unclear how Taiwanese workers would be affected Cathay Pacific Airways Ltd (國泰航空) yesterday said it is planning new flight services for Taiwan as it announced a corporate restructuring that included the shutdown of its regional subsidiary, Cathay Dragon (國泰港龍), and could lead to job cuts in Taiwan. Cathay Pacific said the shutdown means that the one round-trip service between Taichung and Hong Kong per day and seven round-trip services between Kaohsiung and Hong Kong operated by Cathay Dragon prior to the COVID-19 pandemic would be terminated. “The parent company is planning a new schedule between Taiwan and Hong Kong,” Cathay Pacific assistant manager for corporate communications Moses Hou (侯恩錫)
OVERHEATED MARKET?: The gauge would be designed to provide more reliable information than private-sector data, and help improve policymaking, the council said The National Development Council (NDC) is considering creating a business climate index on Taiwan’s property market, allowing policymakers to better monitor market movements and intervene if necessary, NDC Minister Kung Ming-hsin (龔明鑫) said yesterday. Kung made the remarks at a meeting of the legislature’s Economic Committee where lawmakers from across party lines voiced concerns about housing price hikes driven by capital repatriation. Kung said that the council is assessing the possibility of creating an index designed to provide more accountable and transparent information than data provided by private-sector market analysts, and could help improve policymaking. The council would compile a report on
STOCK MARKETS TAIEX closes slightly higher The TAIEX closed slightly higher yesterday as market sentiment remained cautious over the Nov. 3 US presidential election. Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was again the anchor stabilizing the broader market, preventing the main board from falling into negative territory at the end of the session, dealers said. The TAIEX closed up 14.88 points, or 0.12 percent, at 12,877.25, on turnover of NT$167.982 billion (US$5.81 billion). TSMC, the most heavily weighted stock on the local market, rose 0.44 percent after fluctuating between NT$451 and NT$456. The semiconductor subindex and the bellwether electronics sector