Mine your own business! : Economic interdependence and Sino-Australian relations in the 2000s

Abstract

This thesis is a case study of the Sino-Australian economic interdependence relationship from 2000-2013. The period has been characterized by an explosion of mineral trade, with Australia in the role of exporter, and China in the role of importer. In particular one mineral has stood out as the most important in the trade relationship: iron ore. The drastically altered pattern of trade has tied the two countries closer, making them ever more dependent on each other. With Hirschman’s dependency theory as a point of departure, this study seeks to draw out the political consequences of this increasing interdependence. In light of their differences in culture, ideology, form of government, relations to the US, and at times economic interest, there has been persistent conflict throughout the 2000’s on many policy areas. This thesis asks whether the increased economic transactions have led to a balanced or asymmetric economic relationship, and how this new interdependence has affected each side’s political leverage over its counterpart. It is argued that the economic interdependence relationship between the two countries, despite what it might seem from the outside, is relatively balanced. Each party seems equally dependent on the other, and this also seems to have an effect on the political leverage of each party. Through reviewing four central policy areas of conflict, the thesis finds that the political leverage of the two countries seems fairly balanced, with Beijing not able to move Canberra to any large degree in any conflict area. The causal mechanism of economic pressure is suggested as a possible pathway from balanced interdependence to a ‘political stalemate’ in the Sino-Australian case.