VIDEO

A new cold war?
China, America and the geopolitics of COVID-19

Were you unable to make it to our joint webinar with the Asia Society A new cold war? China, America and the geopolitics of COVID-19 featuring Asia Society's Richard Maude, USSC's Ashley Townshend, International Institute for Strategic Studies' Lynn Kuok and Macquarie University's Lavina Lee?

You can now watch the full webinar on our YouTube channel!

NEWS WRAP

Testing times

• Latest Trump interview
  On Sunday, President Trump sat down with Fox News' Chris Wallace and discussed everything from the COVID-19 mortality rate to the recent poll comparing which candidate Americans believe is more mentally fit. Wallace said he, too, had passed the test. WATCH THE INTERVIEW HERE
   

• Australians mistakenly think China is the biggest investor
  This week, US Ambassador AB Culvahouse remarked that the US is still "Australia's most important economic partner." However, recent USSC polling found that 71 per cent of Australians incorrectly believe China is the top investor into the country. READ MORE HERE
   

• Trump testing line of attack
  As discussed in the USSC webinar with  Axios reporter Jonathan Swan, Trump has been testing different tactics to form the campaign's Biden narrative. In an interview with Fox News, President Trump followed the line that Biden is "mentally shot." With the August conventions fast approaching, the real test will be if this message can cut through the coronavirus coverage. READ MORE HERE
   
• TikTok troubles
  Tensions are rising as China has claimed Prime Minister Morrison is a "US puppet" if Canberra decides to ban social media platform TikTok. However, USSC Non-resident Senior Fellow John Lee points out the risks with the platform because, "it can be used as a front for the Chinese Communist Party at any time." READ MORE HERE 

Foreign investment in Australia, 2019

ANALYSIS

Australia's economic ties with the US shouldn't be forgotten

USSC CEO Professor Simon Jackman

A narrative about our economic reliance on China is a mainstay of the Australian national conversation. This not just an elite perspective. Public opinion research by the US Studies Centre reveals that an overwhelming 71 per cent of Australians incorrectly nominate China as Australia's largest source of foreign investment.

Too often Australia's national strategic discussion is shoehorned into a simple dichotomy: "balancing" our prosperity (read "trade with China") and security (read "the US-Australia alliance"). Reality is not so simple. This simplification of Australia's circumstances is alluring in its simplicity, yet dangerous in its lack of rigour, depth and foresight.

The two-way investment relationship between China and Australia has grown to be worth a cumulative A$163 billion. But this is a mere 9 per cent of the size of Australia's two-way investment relationship with the United States - now valued at a mammoth A$1.82 trillion, which is about 90 per cent of the value of the entire Australian share market and roughly equivalent to a year's worth of Australian GDP. More than one in four dollars invested in Australia from abroad can be sourced to the United States. And similarly, more than one in four dollars of Australian investment seeking yield abroad goes to the United States.

Despite this extent of American investment throughout the Australian economy, in the same USSC survey of 1054 Australians, only 17 per cent correctly identify the United States as Australia's largest investment partner. Like much about Australia's relationship with the United States, the depth and longevity of the investment relationship seems to be taken for granted, under-appreciated in its value and contribution to Australia's prosperity.

So as Australia faces down its first recession in almost three decades, what do these facts portend about global and national economic recovery?

First, amid the most pressing strategic circumstances since at least the Cold War, Australia's economic relationship with the United States seems more resilient than that with China. This seems surprising. On the one hand, Trump's election and the way "American First" has found voice in US trade policy has been a source of global disruption and uncertainty. Multilateral institutions the United States helped create, like the WTO, have been pushed to near breaking point by the Trump administration. Cuts to US corporate tax rates have seen much less capital flowing out of the United States in the past, as American corporations take advantage of the opportunity to repatriate profits built up offshore. Australian exporters have wondered whether they would be casualties in any preferential trade arrangements struck between the United States and China.

But for all this turbulence of the last three years, the two-way investment relationship between Australia and the United States has risen by A$280 billion, a remarkable result during a period in which the world has largely shied away from foreign direct investment, with the two-way investment relationship between Australia and China having decreased by A$4.6 billion.

As a first-term of President Trump draws to a crisis-ridden close, it's clear even the starkest expression of America first has ample room for Australia.

This article is an excerpt from an article originally published in the Canberra Times.

COVID-19: BY THE NUMBERS

Deaths per million: US 394 | AUS 4.3

On Sunday, President Trump claimed the United States has one of the lowest mortality rates for COVID-19. It currently ranks as the eighth worst country for mortality rates and is more than 91 times greater than the Australian mortality rate. It still leads the world for total number of deaths, nearly double the second highest country.

To track the latest trends and numbers, visit our COVID-19 tracker HERE.

VIRTUAL EVENT

Enduring economic partners: 15 years of the Australia-United States Free Trade Agreement

When the free trade agreement between the United States and Australia (AUSFTA) went into force on 1 January, 2005, the two allies were engaged in the wars in Afghanistan and Iraq, economic globalisation was yet to reach its high watermark, and China’s economy was less than a sixth of the size that it is today. AUSFTA deepened the US-Australia economic relationship, with two-way trade increasing by nearly 80 per cent and investment flows nearly tripling since 2005. 

But much has changed since 2005, with globalisation in retreat and China the second-largest economy in the world.

Spaces are still available for our webinar event featuring many of the officials who created the landmark agreement, including:

• The Hon John Howard OM AC – Prime Minister of Australia 1996 - 2007
• The Hon Arthur Sinodinos AO - current Australian Ambassador to the United States
• The Hon Joe Hockey – former Australian Ambassador to the United States; former Federal Treasurer 
• Robert Zoellick – Senior Counselor at Brunswick Group; former US Trade Representative; former US Deputy Secretary of State; former President of the World Bank 
• Wendy Cutler – Vice President and Managing Director of the Asia Society Policy Institute; former US Deputy Trade Representative 
• Michael Thawley AO – Vice Chairman, Capital Group International; former Australian Ambassador to the United States; former Secretary of the Department of the Prime Minister and Cabinet and senior public servant 

Make sure to register to submit a question for the panel.

WHEN:
Friday 24 July 2020, 9am AEST

COST: 
Free, but registration is essential

THE WEEK IN TWEETS

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