Australia's relationship with China: trade, security, and the balance between them

Australia's relationship with China represents one of the most complex and consequential policy challenges of our time. With China as our largest trading partner - accounting for $219 billion in two-way trade in 2025 - while simultaneously presenting growing security concerns in the Indo-Pacific, Australians deserve a real voice in navigating this delicate balance.

The Economic Reality

The numbers tell a compelling story. China purchases approximately 40% of Australia's exports, including:

• $95 billion in iron ore annually
• $18 billion in coal exports (despite climate tensions)
• $15 billion in agricultural products, from beef to barley
• $8 billion in education services through international students

These figures represent more than statistics - they're jobs in the Pilbara, farming communities across regional Australia, and university towns from Perth to Brisbane. When China imposed trade sanctions on Australian wine, barley, and coal between 2020-2022, entire industries felt the impact. The recent gradual lifting of these sanctions has provided relief, but the experience highlighted our economic vulnerability.

Yet this economic interdependence exists alongside Australia's commitment to the $368 billion AUKUS submarine program and our alliance with the United States - decisions that have significant implications for our China relationship.

Security Considerations

Australia faces genuine security challenges in our region. China's military buildup in the South China Sea, territorial disputes with our neighbours, and cyber security concerns affect our national interests. The establishment of Chinese military bases in the Solomon Islands, just 2,000 kilometres from our coastline, represents a strategic shift that previous generations of Australians never had to consider.

Our defence spending has increased to 2.4% of GDP in 2026, with much of this investment directly responding to regional security concerns. The question isn't whether these concerns are legitimate - they clearly are - but rather how we balance security imperatives with economic realities and diplomatic opportunities.

The Democracy Deficit

Here's where Australia's traditional political system fails us. Major decisions about China policy - from trade agreements to military commitments - are made by small groups of politicians and advisors, often without meaningful public consultation.

Consider the AUKUS agreement: this generational commitment was negotiated and announced without a parliamentary vote, let alone public input. Similarly, decisions about Chinese investment in critical infrastructure, university partnerships, and technology sharing happen behind closed doors.

Meanwhile, polling consistently shows Australians hold nuanced views that don't fit neat political categories:

• 67% support maintaining strong economic ties with China
• 72% want greater scrutiny of Chinese investment in strategic sectors
• 58% believe Australia can maintain good relationships with both China and the United States
• 81% want more transparency in foreign policy decision-making

A Path Forward Through Participation

Direct democracy offers a fundamentally different approach to China policy. Instead of leaving these crucial decisions to political elites who may prioritise party politics or personal relationships, we can engage the collective wisdom of informed Australian citizens.

Imagine if major China policy decisions went through genuine democratic deliberation:

Trade Policy: Members could evaluate specific trade agreements based on detailed economic impact assessments, environmental considerations, and worker protections. Rather than blanket acceptance or rejection, we could craft nuanced positions that protect Australian interests while maintaining beneficial economic relationships.

Security Investments: Military commitments like AUKUS could be subject to member voting after comprehensive briefings from defence experts, economists, and diplomats. Australians could weigh the costs, benefits, and alternatives before committing hundreds of billions of taxpayer dollars.

Foreign Investment: Rather than ad-hoc decisions by ministers, we could develop clear, democratically-mandated criteria for evaluating Chinese investment in critical infrastructure, informed by expert analysis and public values.

Building Informed Consensus

Critics might argue that foreign policy is too complex for public participation. This patronising view underestimates Australian citizens while ignoring the superior outcomes that informed deliberation can produce.

Direct Democracy's model ensures members receive comprehensive, balanced information before voting. On China policy, this might include:

• Economic modelling of different trade scenarios
• Security briefings from intelligence agencies
• Input from affected industries and communities
• Comparative analysis of other nations' approaches
• Long-term strategic assessments

This process produces more robust, sustainable policies than backroom negotiations or partisan political positioning.

The Stakes Are Too High

Australia's China relationship will shape our prosperity and security for decades. These decisions are too important to be left to politicians who may prioritise electoral cycles over national interests, or who lack accountability to the people who live with the consequences.

Through direct democracy, we can craft a China policy that reflects Australian values and interests - one that maintains beneficial economic relationships while protecting our security and sovereignty. We can move beyond the false choice between economic dependence and strategic hostility.

Ready to have your voice heard on Australia's most important foreign policy challenge? [Take our policy quiz](https://directdemocracy.com.au/quiz) to see how your views align with current government positions, and join thousands of Australians building a more participatory democracy.