Can economic interests trump ethnic hostility? Trading ties versus outgroup hostility in Australian perceptions of China as a security threat

Will China's rise be peaceful? One of the key reasons for an optimistic outlook is the extensive economic ties which exist between China and its neighbors. According to a venerable strand of thought among policymakers and scholars alike, trading ties ought to foster bonds of amity among nations and thus reduce the chances of war. Here, we test this proposition using spatial economic data and survey research on opinion toward China as a security threat in Australia. The structure of Australia's economy, its reliance on exports to China, and the concentration of these exports in a small number of sectors make it an ideal venue for such a test. Consistent with previous literature on public opinion and globalization, but in contrast to an individual interests based account of the trade-peace relationship, we find that outgroup hostility, not economic interdependence, is the key factor in shaping voters' fears of a Chinese security threat.