Turbull Summoned Go Darwin

Malcolm Turnbull has been summoned to Washington to meet with the President.

The subject of conversation will be how Australia will remain a loyal ally, especially as Trump took the asylum seekers from a previous deal, and help push back against China. You see while the US is very happy to have China as an ally on the doorstep of North Korea, it will be unrelenting in its push back against China from around the region.

Whereas previous President’s played diplomacy and felt the US owed Australia, this President very likely feels Malcolm Turnbull and Australia now owe him. In return for his sticking to that asylum seekers deal. Trump was quite right to call it a dumb deal. It was. An obscure structure so the Labor Party could appear both friendly and hard on asylum seekers at the same time.

All of it of course only goes to further the impression in Washington that Australia is, well, a little bit at sea, and could be managed back into the pack as a satellite state of the USA. Away from China with whom Australia sends two-thirds of its exports and has become quite attached in recent years. Interesting times to say the least.

My view is that Australia is part of Asia, and while there have been two Asia’s in the past, pro-China and pro-USA, the region will increasingly respect the super-power at its epicentre. Just as South America is having to do, with regard to the USA. Subsequently, Australia needs to be very wary of being seen to be reverting to a mere USA puppet.

Does Malcolm have the metal for Washington politics? Probably not. If his fast as he could back-downs on stated policy domestically, are anything to go by. It will be fascinating to see what the spin on his being summoned to Washington turns out to be.

Meanwhile, what does this mean for the Australian economy and property prices?

Well, for one thing, we are likely to see a further ramping up of the US military presence in Darwin. Which will mean an equally strong increase in Australian military and bureaucratic support services at the top end as well. It may not even be going too far to say, that Malcolm’s meeting with Trump could see an immediate rise in Darwin property values.

From a long term perspective, the shift of Australia into the sphere of Chinese diplomacy and influence is irreversible. It is already happening at breakneck speed. Forget about annual numbers. Chinese tourists, students, migration, and business visits are climbing by the month, if not the hour.

It could well end up being the case that we are living in a country owned by the Chinese, while being militarily defended by America. This is what happens to strategic, resource rich, small population nations, surrounded by resource hungry, much larger countries. That’s history.

It is, however, a fantastic opportunity for Australian property investors to forestall and maintain beachheads against the foreign acquisition forces, through savvy domestic knowledge investment.

The sky is the limit for Australian property values.

Clifford Bennett