Friday, June 15, 2012

Benjamin Herscovitch: An insider's view of Australia's Asian embrace

Sam Roggeveen, editor of the Lowy Institute’s blog The Interpreter, recently suggested that coming to grips with the Asian Century may represent a ‘great national project’ for Australia. Embracing Asia ‘goes to the core of our national identity’ and cannot be done without political leadership, he added.

The Asian Century is not a pithy turn of phrase. It points to one of the most important geo-strategic shifts in world history. After approximately 500 years of European and American pre-eminence, power is rapidly moving back to Asian capitals and centres of commerce. As profound as the changes heralded by the dawn of the Asian Century might be, it does not require a great nation-building response from Australia. We are already deep in an Asian embrace.

The rise of Asia is nothing new for Australia in the economic arena. From the resources sector to higher education, the Australian economy is already tied to Asia’s growing economies. The top five destinations for Australian exports are China, Japan, Korea, India and Taiwan, and we are negotiating free trade agreements with China, Japan, Korea, India and Indonesia.

The Australian tourism industry is emblematic of the shift to Asia. While North Atlantic economies are depressed by ongoing financial meltdowns and paltry growth figures (around 2% in the United States and 0% in the Eurozone), Australia is increasingly drawing tourists from the rapidly expanding Asian middle classes. Last year, Australia welcomed 542,000 Chinese visitors, and Tourism Australia projects that Chinese tourists could inject as much as $7 billion-9 billion annually into the Australian economy by 2020. With more than 2 billion newly prosperous Indian and Chinese middle-class consumers expected by mid-century, the importance of Asian markets will only grow.

Appreciation of the significance of Asia’s rise is not restricted to corporate boardrooms or elite defence and foreign policy circles. The latest Lowy Institute poll shows that Australians are aware of Asia’s importance to our prosperity and security: 68% of respondents said it was very important for Australia to be seen in a positive light by countries in our region.

Australia’s view of Asia is also becoming increasingly optimistic. Positive feelings towards Japan are at an all-time high, and China is increasingly viewed in a positive light.

Australia’s integration into Asia need not be a national project. It is already underway and will continue apace.

Benjamin Herscovitch is a Policy Analyst at The Centre for IndependentStudies.

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