China is eyeing Sydney’s new airport as a potential project that could be linked to its trillion dollar “One Belt, One Road” infrastructure plan, according to a government-linked think tank.
The interest in Sydney infrastructure follows Canberra’s decision to keep its $5 billion Northern Australia development plan separate from OBOR, despite a push from Beijing earlier this year to officially link the two initiatives.
“China is not just interested in infrastructure projects in Northern Australia being linked with Belt and Road,” said Han Feng, from the National Institute of International Strategy at the state-run Chinese Academy of Social Sciences.
“Sydney’s infrastructure plan requires a large amount of capital and they need to seek international cooperation on these projects. Subways, airports and roads; these infrastructure projects are China’s strength.”
Reviving the old Silk Road. A map showing China’s One Belt, One Road strategy.
Earlier this month, the Turnbull government announced it would invest $5.3 billion over 10 years to build an airport at Badgerys Creek in western Sydney. The Sydney Airport Group opted not to take up its option to build the new airport, leaving it to the government to take over the project. Work is due to start next year and it is expected to be operating by 2026.
“Australia’s projects meet well with China’s strengths,” said Mr Han. “It would be ideal if there was co-operation between the two governments. It all depends on Australia’s mindset.”
So far, Australia has taken a conservative approach to its engagement with China’s OBOR plan. Unlike New Zealand, it opted not to sign a memorandum of understanding with China, which would have formalised its involvement. Trade Minister Steve Ciobo travelled to Beijing for China’s OBOR summit in mid-May but Australia is more a cautious observer than an active participant at this stage.
“Australian companies have been quite active but Australian politicians have a lot of concerns,” said Mr Han.
“Not having an MOU between China and Australia will slow down China’s investment in Australia.”
Beijing is looking to upgrade infrastructure along the old Sild Road through Central Asia to Europe as well as creating new maritime trading routes. It’s not just Australia that is concerned about the geostrategic motives behind China’s grand infrastructure plan. Other countries are taking a more sceptical view of OBOR, as China looks to bolster its influence and position in the region.
China is eager to secure Australia’s involvement amid some push back from state-owned companies, which are being asked to invest in countries with unstable political and economic outlooks. Involving countries like Australia and New Zealand would allow Beijing to lower the overall risk profile of OBOR.
“Australia always claims it is part of Asia, but it wants to keep its distance from China,” said Liu Qing, from the China Institute of International Studies, a think tank that sits under the Foreign Ministry.
“The government wants to cooperate with China but they have too many concerns.”
“If the new Sydney airport is open to foreign investment, Chinese companies would be happy to get involved,” said Mr Liu.
“The new airport in Beijing, which is opening in 2019, will be the biggest in the world.”
David Olsson, a consultant to law firm King & Wood Mallesons who sits on the advisory board of the Australia-China Belt and Road Initiative, said the new Sydney airport was: “a major infrastructure development and many countries are looking to see how they can take part”.
“China has built hundreds of world class airports,” he said. “Why wouldn’t we talk to them about their expertise? If it means labelling it a Belt and Road project that gets the imprimatur of China’s support, giving it access to expertise and capital at potentially good rates, then so be it. It would make no business sense if we don’t consider this option.”
Mr Olsson said the northern Australia development plan had become “too politicised”.
“We need to develop a robust process for identifying our priority infrastructure projects and signal clearly which ones are open to foreign investment or participation,” he said.