Lexi Webster
Australia and China have had a complex economic relationship in recent years, with China being Australia's largest trading partner. In 2023, China bought $219 billion worth of exports from Australia, accounting for 32.5% of its total exports worldwide. However, tensions have arisen between the two countries, with Australia expressing concerns about Chinese influence in the Solomon Islands and national security issues regarding the 99-year lease of the Darwin Port to a Chinese firm. Australia has also rejected offers from China to collaborate against Trump tariffs. While there is no clear evidence of Australia borrowing money directly from China, the Murdoch empire, a prominent Australian media organization, has accepted a $100 million loan from the state-owned Bank of China, raising questions about potential Chinese influence.
| Characteristics | Values |
|---|---|
| Does Australia borrow money from China? | There is no explicit mention of Australia borrowing money from China. However, the Murdoch empire, which owns News Corp, has accepted a $100 million loan from the state-owned Bank of China. |
| Australia-China Relations | Strained due to China's military assertiveness, restrictions on Australian goods, and the lease of Darwin Port, a critical infrastructure, to a Chinese firm. |
| Australia's Exports to China | In 2023, China bought $219 billion, or 32.5%, of Australia's total exports worldwide. |
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What You'll Learn
The Australian government's borrowing plans for 2024/25
The Australian government has announced plans to borrow more than initially indicated in the 2024/25 financial year. The Australian Office of Financial Management (AOFM) intends to sell around A$100 billion ($63 billion) of Treasury bonds by the end of June 2025, with Treasury Indexed Bond issuance expected to be around A$3 billion. This is an increase from the previous estimate of A$95 billion in borrowing for the same period. The AOFM's plans for 2025/26 include the sale of about A$150 billion ($94.6 billion) in Treasury bonds.
The Australian government expects a deficit of A$27.6 billion ($17.4 billion) for the fiscal year ending in June 2025, slightly higher than the projected deficit of A$26.9 billion in December. This increased borrowing is attributed to the announcement of several cost-of-living relief measures in the federal budget before the national election scheduled for May.
In terms of development assistance, Australia has committed to delivering a record $2 billion in development aid to the Pacific in 2024–25, solidifying its position as the region's most significant development partner. Additionally, Australia's $1.3 billion ODA budget for Southeast Asia will be guided by eight new country and regional Southeast Asia Development Partnership Plans. Over $57 million will be allocated to support climate action in the region, including investments in climate-focused small and medium enterprises and policy reform under the Australia-Indonesia Climate and Infrastructure Partnership (KINETIK).
The Australian government also plans to invest in advancing gender equality, with over $1.7 billion invested in 2022-23. In 2024, the government will release an International Gender Equality Strategy to strengthen its commitment to empowering women and girls globally. Furthermore, Australia is committed to addressing climate change through innovative financing mechanisms. The Australian Development Investments initiative will leverage ODA to drive climate and gender equality outcomes by attracting additional private and philanthropic funding.
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China's lending to developing countries
China is the world's largest official creditor, and its lending to developing countries has been a significant source of funding for infrastructure projects in these nations. However, China's lending practices have also been criticized for pushing some of the world's poorest countries to the brink of financial collapse.
The countries most indebted to China include Pakistan, Kenya, Zambia, Laos, and Mongolia. These nations are now facing the challenge of servicing their debts, with interest payments consuming a significant amount of their tax revenue, impacting essential areas such as schools, electricity, food, and fuel.
The consequences of China's lending and debt collection practices have been observed in several countries. For example, in 2022, Sri Lanka defaulted on its external debt, including $4.2 billion owed to China, its largest lender. This default made it more difficult for Sri Lanka to borrow in the future and undermined confidence in its currency and economy.
While some argue that China's lending is driven by commercial logic, there are concerns about the lack of transparency in the terms and conditions of its overseas lending. Critics also allege that China's lending to the developing world is a deliberate strategy to lay a debt trap for borrowing governments, which could ultimately undermine poverty reduction efforts and fuel instability.
It is worth noting that China's lending practices have also been a source of controversy in Australia, with the Murdoch empire borrowing US$100 million from the state-owned Bank of China in 2022. This loan was particularly notable given the Murdoch media operations' criticism of the Xi Jinping regime and China's collaboration with Vladimir Putin.
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The Murdoch empire's US$100 million loan from China
In April 2022, the Murdoch family took a US$100 million loan from the state-owned Bank of China's New York branch. This loan was part of a larger US$1.25 billion loan package from multiple banks, including Chase, CitiBank, and J.P. The loan was taken out by Rupert Murdoch's News Corp conglomerate, which owns Fox News, Sky News Australia, The Australian, and The New York Post.
The decision to accept the loan from the Chinese government-run bank raised questions about the Murdoch empire's criticism of the Chinese Communist Party and Xi Jinping's regime. Some commentators suggested that Beijing might be seeking to influence the Murdochs by becoming a key family financier. The loan also prompted discussions about the ethical dilemma faced by the Murdochs, especially considering the global ESG boycott of Russia, where over 400 companies pulled out or temporarily closed their Russian operations.
The Murdoch family has gerrymandered control over two public companies—News Corp and Fox Corp. Since the COVID-19 pandemic, their outlets have become vocal critics of the Chinese regime, even referring to the Chinese leadership as "autocratic dictators." However, this did not stop the Murdochs from accepting the loan, and there is no indication that News Corp's anti-China stance will change as a result of the loan.
The loan from the Bank of China is notable due to the bank's size and influence. With an estimated US$3.7 trillion in assets, it is the largest and oldest bank on the Chinese mainland. The Bank of China is the second-biggest player in the 13-bank News Corp syndicate, after Bank of America.
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Australia's rejection of China's offer to team up against Trump tariffs
Australia has rejected China's offer to team up against U.S. President Donald Trump's tariffs. Trump imposed a 10% tariff on Australian goods, but for China—Australia's biggest trading partner—he raised tariffs to 125%. In response, China's ambassador to Australia, Xiao Qian, urged Canberra to collaborate with Beijing to defend the multilateral global trading system, arguing that joint resistance is "the only way" to stop the "hegemonic and bullying behaviour of the US".
However, Australia's Deputy Prime Minister Richard Marles stated that Australia would not be "holding hands with China" and would instead focus on pursuing its national interests and diversifying its trade around the world. Marles specifically mentioned strengthening trade ties with the European Union, Indonesia, India, Britain, and the Middle East.
Australia's decision to reject China's offer comes as Trump escalates his trade war with Beijing. The U.S. President has taken a tough stance against China, imposing tariffs worldwide and writing in a post on Truth Social that the increase in tariffs on Beijing is a direct response to the country's "lack of respect" for the global economy.
While Australia has chosen not to partner with China on this issue, it is important to note that the country has borrowed money from China in the past. For example, the Murdoch empire, which operates media outlets that have been critical of the Xi Jinping regime, accepted a US$100 million loan from the state-owned Bank of China in 2022. Additionally, Australia's central bank has warned that the ongoing uncertainty over tariffs and trade restrictions between the U.S. and other major economies could impact business investment and household spending decisions in the country.
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Australia-China relations
In addition, there have been reports of China's attempts to establish a naval base in the Solomon Islands, as well as the lease of Darwin Port in Australia to a Chinese firm, raising national security concerns. Australia has also rejected offers from China to work together against Trump tariffs, with the then-Australian Deputy Prime Minister Richard Marles stating, "We're not about to make common cause with China."
Despite these tensions, China remains a significant trade partner for Australia. In 2023, China bought $219 billion, or 32.5%, of Australia's total exports worldwide, while the United States only made up 6% of Australia's export sales.
In terms of borrowing money from China, there has been one notable instance where the Murdoch empire, despite slamming the Xi Jinping regime through its media operations, accepted a $100 million loan from the state-owned Bank of China in 2022. This has raised questions about Beijing's influence and the Murdochs' decision to accept the loan despite the global ESG boycott of Russia.
Overall, while Australia-China relations have been fraught with tension and challenges, the economic interdependence between the two countries is significant, and both nations continue to engage with each other on various fronts.
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Frequently asked questions
Australia has not directly borrowed money from China, but there are instances of Australian entities borrowing from Chinese financial institutions. For example, the Murdoch empire, led by Rupert and Lachlan Murdoch, borrowed US$100 million from the state-owned Bank of China in 2022. This loan was accepted despite the Murdoch's media operations' criticism of the Xi Jinping regime.
The US$100 million loan from the Bank of China was part of a larger US$1.25 billion loan package for the Murdoch empire, which includes News Corp. The loan was intended for general corporate purposes, possibly related to acquisitions or takeovers.
The loan raised questions about the potential influence Beijing may seek to exert on the Murdochs by becoming a key family financier. It also highlighted the complex dynamics between China and entities that operate in countries with strained relations, such as Australia.
In 2025, China reached out to Australia to form an alliance against President Donald Trump's tariffs, but Australia refused. Australian Deputy Prime Minister Richard Marles stated, "We're not about to make common cause with China."
The relationship between Australia and China has been strained in recent years due to various issues. These include China's military assertiveness, trade restrictions on Australian goods, and national security concerns, such as the lease of the Darwin Port to a Chinese firm. Australia has also strengthened its military posture and sought alliances with countries like the United States and the United Kingdom.
