News from the Institute for International Trade

Standing up to Chinese economic coercion: Is Australia a model of economic resilience?

WORKING PAPER 13
Contrary to some prior research findings, the economic costs to Australia of China’s economic coercion are high. Unfortunately, while the bilateral mood music is improving resetting relations may not be possible, nor likely, as both countries pursue economic diversification from the other. Yet there is much to be gained from a calibrated shift in trade and investment relations, notwithstanding the hostile geopolitical environment. Australia needs to establish a 10-15 years strategy for where it wants the relationship to be, and like every other country in the region, negotiate its differences with China.

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