After the GFC: Australia and the Chimerica challenge

• Geoffrey Garrett
• Australian Strategic Policy Institute

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18 September 2009

How China and the US behave as they come out of the financial crisis will have global ramifications, but in few places are the stakes higher than in Australia. This report provides an indepth Australian perspective on the global financial crisis (GFC) and its consequences.

The author, Professor Geoffrey Garrett, advises that Australia will have to come to grips with the prospect of substantial Chinese foreign investment and that it will come out of the GFC in much better shape than most advanced economies, but the China-US balancing act on which Australia’s security and prosperity depends will be both more important and harder to perform.

Australia will be challenged by China’s need for foreign raw materials and by the US’s rising expectations of its allies, but it can also foster better Sino-American interactions in international forums, particularly the G-20 group.