Northern Territory businesses looking to grow in a slowing economy are turning to one of the biggest economic and geopolitical expansions the world has seen in modern times.
China’s One Belt One Road is a bold, trillion-dollar plan to rework the global economic order on Beijing’s terms, building huge infrastructure projects along a path based on the ancient trade route that spanned Europe, Asia and Africa.
So far 68 countries have signed up to the signature project of Chinese President Xi Jinping, which marks China’s clear plans to expand its power in the region and beyond.
Despite Australia’s reluctance thus far to sign up, China has northern Australia firmly in its sights.
Beijing is keen for Australia’s Developing the North agenda to be linked with its One Belt One Road (OBOR) strategy, with Mr Xi specifically linking the two in an official news report.
As China’s biggest trading partner, Australia — particularly the north — is going to be impacted whether it likes it or not, said Hugh White, ANU professor of strategic studies.
“We in Australia are going to have to live with the fact that China is going to be a very powerful, very rich, very influential country in our region, and we’re going to have to learn how to deal with it,” he said.
“If you look at it from an economic point of view — and you look at the way it connects us with the Government’s own plans for northern Australian development — it would seem pretty logical to sign up.”
Businesses have been broadly supportive of the plan, with some of Australia’s biggest banks, law firms, and consulting companies already involved, and the Australia China Business Council (ACBC) has been taking delegations of NT businesses to China this year to build ties.
China’s rise ‘inevitable’
China’s motivations are not just economic, they are also clearly geopolitical and that has made the Australian Government cautious of signing up.
“There’s certainly an extension of soft power within the region, and that always happens in a trade relationship,” said Daryl Guppy, the President of the NT branch of the ACBC.
“[But] we can’t stop China’s expansion, that’s an inevitability and the rest of the region has recognised that.”
ACBC NT is organising a One Belt One Road conference next year to bring together Territory businesses and Chinese investors.
However Mr Guppy said he was frustrated with a lack of political will in Australia to engage with the project.
He said he was disappointed earlier this year when the Federal Government declined China’s offer to link northern Australian development with One Belt One Road.
“The reality is we don’t have our own internal domestic funding that will help [develop northern Australia],” he said.
“When we’re looking at developing the north, this is the sort of thing we’re interested in: being able to attract Chinese investment to help with the develop the north long-term infrastructure program.”
Professor White said Australia’s decision to turn down China’s offer showed a deep fear of the communist country’s shifting role on the world stage, as well as anxiety that “by signing up to the OBOR we’d help to amplify China’s challenge to America’s regional leadership”.
While he said Australia was right to be anxious about China’s rise, it should not stick its head in the sand, but rather “learn to live with it” and “adapt intelligently”.
“It’s a mistake for us not to sign up to [the plan],” he said.
“It’s easy for people in Canberra to somehow hope the US-lead order of the last few decades — which has been so easy and comfortable for our foreign policy-makers — can somehow be made to last forever.”
“It’d be nice if it could, but it’s not going happen.”
Reforging old ties
On the cusp of Asia, northern Australia and particularly the port city of Darwin has a long history of engagement with the region; during the gold rush of the late 1800s Darwin had more Chinese residents than Europeans.
But there is also a great deal of hesitance and suspicion around Chinese investment.
A long-term lease of Darwin’s port to Chinese-owned company Landbridge was highly controversial in Australian and Unites States defence circles due to the port’s close proximity to Australian and US bases in the Top End.
Australia’s former trade minister and the architect of the Australia-China Free Trade Agreement, Andrew Robb, said he believed xenophobia was behind much of the discomfort around Chinese investment.
“I was running the National Farmers Federation in the 1980s, when Japan started to invest heavily in Australia,” said Mr Robb, who now works as a private consultant for several companies, including Landbridge.
“All the same xenophobic hysteria that’s being worked up over China was worked up over Japan.”
Local business owner Annie Zhu has just registered an innovation and incubation hub for start-ups and plans to help Darwin businesses get into the China market.
She wants to see more support from the NT Government for local businesses to engage with the One Belt One Road program.
“I hope the NTG can offer some further support,” she said.
For its part, the NT Government has indicated strong support for the project, and acknowledged overseas investment would be vital to develop northern Australia.
It, like the federal Labor Opposition, wants Australia to formally align itself with the project, and has held talks with the Federal Government on the issue.
By Nadia Daly