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Asia's Game of Thrones
Australia and Japan Strengthen Military Ties

Chinese investment in Australia has soared over the past few months, a reminder of Beijing’s economic power down under. Bloomberg:

Chinese investment in Australia has grown 60% to $15bn as investors continue to buy real estate and expand into areas such as healthcare.

The investment in 2015 reached its second highest level, behind the peak year of 2008, with Chinese taking advantage of the lower Australian dollar.

Yet despite fears that all the money might make Canberra more cautious around China, the possibility of upsetting Beijing apparently hasn’t dissuaded Canberra from working to strengthen its relationships with Tokyo. The Japan Times:

Following the introduction of the new security laws, the Defense Ministry and the Australian Army agreed Monday to promote joint training between their troops while stepping up bilateral cooperation on other issues, officials said.

The agreement was reached during talks between Defense Minister Gen Nakatani and Australian Army chief Lt. Gen. Angus Campbell in Tokyo.

At the outset of the meeting, Nakatani hailed the significance of a joint military drill conducted by the United States and Australia in northern Australia in July, which was joined by Ground Self-Defense Force personnel, while Campbell expressed willingness to expand future opportunities to train and drill together.

When Australian Prime Minister Malcolm Turnbull took office last year, he was considered relatively “pro-China.” But so far, he’s proven to be far more willing to take on Beijing than many expected. Some of that may be simply because China has given him little choice: reports of missile deployments in the South China Sea worried Australians and put Turnbull under domestic pressure to take the more confrontational stance he ultimately adopted.

And the more forward stance on security issues may not have the kind of negative knock-on effects more dovish observers feared. If you look closely at China’s recent global M&A binge, you notice that its firms are investing elsewhere because they don’t see many opportunities at home. Of course, given that China could come to see these investments as a form of capital flight and move to block them, Australia might not want to plan on the boom times continuing. But for now, it looks like Canberra is going to continue to calibrate its posture.

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  • Jacksonian_Libertarian

    “If you look closely at China’s recent global M&A binge, you notice that its firms are investing elsewhere because they don’t see many opportunities at home.”

    The same thing happened in Japan before they went into 27 years and counting of deflationary depression. They were buying buildings and golf courses like Pebble Beach, and paying way to much for them. With China it’s the government and government owned companies that are doing the buying, and when they go to war with the rest of the world over the South China Sea, they will have all these properties confiscated along with all the foreign treasuries they’ve accumulated with their currency manipulations.

    This Chinese belligerence presents such a huge opportunity for America to negotiate a very favorable to the US, economic and military alliance from India to America and from South Korea to Australia and every country in between. Such an alliance would easily dominate China, and send them scurrying back to mainland China.

    The Chinese Communist Party seems to be deluded by their own propaganda. They actually believe they are responsible for the so called “Chinese Economic Miracle”. When the truth is that it was the Foreign investors that built state of the art factories in China to take advantage of the cheap Chinese labor and potential 1 billion new consumers that is responsible for the “Chinese Economic Miracle”. While the Chinese Communist Party is unchanged from the corrupt incompetents that were responsible for the “Water Buffalo” level economy before the fall of the Iron Curtain.

    Well the Foreign Investors have left or a desperately seeking to leave now, as the loss of $1 Trillion in foreign currency in 2015 proves. This leaves China with half their economy owned by the Government Monopoly, and not one world recognized brand name like Sony, Toyota, Samsung, Kia, Microsoft, Intel, Apple, Google, Boeing, etc.

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