China’s continuity budget to make Australia richer and more anxious

China is going to buy a hell of a lot more Australian iron ore, lithium, coal and LNG in 2024. Beijing is also going to keep building its navy at a speed not seen since World War II.

That’s the top takeaway for Canberra from Premier Li Qiang’s “government work report”, the closest thing China has to budget night in Australia.

A decade ago, Tony Abbott said Australia’s approach to China was torn between “fear and greed”.

Ten years on, the formula holds — with the fear notched up considerably and the greed dialled down.

It remains the case that, as Prime Minister Anthony Albanese puts it, Australia’s trade with China is “worth more than our trade with our next three largest trading partners combined.”

But it’s also true that as well as being “our biggest trade partner … China is our biggest security anxiety,” as Defence Minister Richard Marles added.

The “about 5 per cent” growth target Beijing set on Tuesday should see China import another two hundred billion dollars, or thereabouts, of exports from Australia. That’s great news for the Treasury in Canberra.

Australia is helping build its Pacific rival’s navy through iron ore trade.

A fair wad of that will fuel the new, clean energy industries China is well on the way to dominating. Lithium is the biggest beneficiary (even as China’s EV sector adjusts to a huge glut of vehicles and to being increasingly in the crosshairs of Brussels and Washington).

But much more will go to China’s old-school industries: mountains of coal, flotillas of LNG and well over half of the iron ore that will this year make another 1 billion tonnes of Chinese steel.

Much of the iron ore Australia sends to China now ends up in public housing, rural irrigation projects, enormous wind farms and the Shanghai-built Teslas that Australians increasingly drive. But it’s an uncomfortable fact that a fair pile also makes its way into the Communist Party’s burgeoning People’s Liberal Army Navy fleet.

Even adjusted for inflation, the 7.2 per cent nominal increase in military spending to $360 billion (1.67 trillion yuan) revealed on Tuesday confirms that China is continuing the biggest peacetime military build-up in modern history. And it is doing it all with the Communist Party’s customary secrecy.

It doesn’t require heroic levels of empathy to appreciate why Xi and his comrades might feel insecure living in a region that includes so many American military bases. (Although they could well reflect on why those host countries are so keen to keep them there).

And it is true that Washington’s $1.3 trillion (US$886 billion) defence spending is more than three times China’s.

But none of that excuses the appalling job Beijing has done of explaining why all of its new kit is necessary for China’s “peaceful rise”.

It is a good thing that, after a four year absence, China’s government has allowed international journalists like me to come to Beijing for its biggest political event. It has never been more important that we listen attentively to what China is saying.

For now, however, much of what we are hearing — particularly China’s belligerent rhetoric on Taiwan and the South China Sea — remains deeply troubling.

And for another year, Xi’s government is doing little to calm those concerns.