NANKAI UNIVERSITY, TIANJIN
AMBASSADOR SPEECH
Australia and China: Our Common Interests and Shared Future
(Tuesday 23 March)
Introduction
Let me begin by thanking President Rao and Nankai University for inviting me here today to speak about Australia and China’s bilateral relationship.
It is an honour to give a speech at such a prestigious university noted for its high level of academic achievement and long list of famous alumni – not least of course former Premier Zhou Enlai. I also note Premier Wen Jiabao’s close attachment to Nánkāi, as a graduate of the middle school affiliated to this university.
I am very pleased that Nankai is home to one of the 26 Australian Studies Centres across China, and also welcome Nánkāi’s successful cooperation in recent years with Australia’s Flinders University.
The title of my speech today is “Australia and China: Our Common Interests and Shared Future” a title chosen to reflect Australia and China’s many shared interests and the fact that these interests, be they economic, strategic or cultural, are only going to increase in the years ahead.
As Australia’s Foreign Minister Stephen Smith said in a keynote speech on Australia-China relations recently, there is not one issue of importance to Australia at the international level – be it regional architecture, global economic coordination, or climate change – where China is not a key player.
And in the other direction, Australia’s importance to China – as a long-term supplier of commodities and services necessary for China’s economic development, and as a constructive and cooperative partner in forums such as APEC and G20 – will surely continue to increase in the future.
A key point I want to leave you with today is, given the increasing integration of our two economies and societies, it is natural that Australia welcomes China's return to its historical status as a major economic power. Australians are comfortable with this reality, understanding that as China grows, so we grow.
Of course, our ever closer engagement with China also leads to occasional complexities and difficulties in the bilateral relationship. I will touch on some of these complexities later, but first let me outline our countries’ many common interests, and areas where Australia and China are working together to promote these interests.
Overview of Australia-China relations
The process of diplomatic engagement between our two countries began over thirty five years ago and in that period of time engagement has increased dramatically.
Our relationship with China is now one of Australia’s most important, and certainly one of our most high profile.
China is currently Australia's largest two-way trading partner, with total trade increasing in 2008-09 by about 30 percent to $83 billion. Two way trade this year will probably exceed $100 billion, or double the value of bilateral trade when I began my posting as Ambassador three years ago and no less than 50 times the amount of trade that existed between our two countries when I commenced my first posting to China in 1986.
In 2009, China overtook Japan for the first time to become our largest export market while our exports to major trading partners such as Japan, the US and Korea declined in 2009 following the global financial crisis, our exports to China increased by 31 percent. China now takes over one fifth of all Australia’s merchandise exports.
Bilateral services trade is also growing strongly, with our services exports to China growing a further 18 percent last financial year, making China Australia’s second largest market.
Growth is particularly rapid in the area of education. There were over 150,000 enrolments by Chinese students at Australian educational institutions in 2009, making us one of the most desirable destinations for Chinese students wanting to study overseas. To give you an idea of how quickly this market is growing, consider that just 10 years ago there were only 9000 Chinese students studying in Australia. The strong growth in Chinese student numbers in Australia is something we welcome very much, as it plays a major role in building friendship and strengthening understanding between our two countries.
Overlaying our rapidly expanding commercial and people-to-people links, there is a steady stream of senior-level visits in both directions including the visit to Australia late last year by Vice Premier Li Keqiang. Vice Premier Li’s visit resulted in a significant Joint Statement that made clear the wide range of bilateral, regional and global issues on which Australia and China are engaging each other, and set a positive tone for the future of the relationship.
In the other direction, there are regular visits to China by our Trade and Resources Ministers, and of course Australia’s best known Chinese speaker, our Prime Minister, Lu Kewen.
We expect more senior-level visits this year, particularly given Shanghai will be hosting World Expo and we will be holding a major “Year of Australia” cultural promotion in China. I am pleased to say that Australia’s World Expo Pavilion is ahead of all other countries’ in its construction, and was the only foreign pavilion toured by President Hu Jintao during his visit to the World Expo site in January.
I would like to talk briefly about two issues that are at the centre of the bilateral economic relationship: our ongoing FTA negotiations and the growing importance of investment.
FTA
Everywhere I travel in China I encounter examples that demonstrate this country’s growing economic links with Australia, and Tiānjīn is of course no different. ANZ bank – one of Australia’s biggest banks and one of just 11 in the world to hold an AA-credit rating following the global financial crisis - has invested in Tiānjīn through an equity stake in Tiānjīn City Commercial Bank, providing its Chinese partner with valuable managerial, customer service and technology support. And Westrac – an Australian company that sells and repairs the world-famous Caterpillar mining equipment – has established a world-class rebuild centre in the Bīnhái New Area.
In view of the central government’s plans for development of Tiānjīn and the Bīnhái New Area – plans that are really quite breath-taking in their scale and ambition – I am sure that we will see a growing number of Australian firms establish a presence in Tiānjīn in the near future.
However, I believe that we have only scratched the surface in terms of the many areas of economic cooperation that are open for Australia and China to develop, in areas ranging from agriculture and mining, to new energy and environmental protection, and a range of modern service industries.
One of the best things Australia and China could do to underpin such an expansion of commercial ties, taking full advantage of the strong complementarities between our economies, would be to conclude a Free Trade Agreement.
The visit by Vice Premier Li Keqiang to Australia late last year injected additional political momentum into the talks. The Joint Statement agreed during his visit emphasised both sides’ commitment to concluding an FTA as rapidly as possible.
Chinese Investment in Australia
An important element of our FTA negotiations is investment.
The Australian Trade Minister has already made clear that he would like to see a bilateral FTA include a framework on investment that could provide greater certainty to investors from both sides.
I would like to emphasise once again today that – despite what you may occasionally read in the media or Internet blogs - the Australian Government welcomes China’s increased investment in Australia.
On this issue, we ask only that Australia be judged by its actions.
The facts speak for themselves. Over the last two years alone, Australia has approved about A$44 billion of Chinese investment. A dramatic increase when compared with the total amount of A$14.5 billion that was approved in the ten years before that.
Of the 140 Chinese investment applications that have been submitted since late 2007, none has been rejected, and only five have been subject to undertakings, amendments or conditions designed to protect the national interest.
Quite simply, these are not the actions of a government that is unwelcoming of Chinese investment.
In the Joint Statement agreed during Vice Premier Li Kèqiáng’s recent visit, we noted Australia sees China's increased investment interest as a positive, mutually beneficial development.
The Joint Statement also noted that China “sees great scope for increased Australian investment in China”. This is currently only about A$7 billion, in part because of China’s restrictions on foreign investment. We would like, over time, to see a corresponding expansion of Australian investment in China.
APEC / APc
Our shared interests extend beyond bilateral trade and investment to the regional and global arenas, where our two countries share an enduring interest in issues such as regional architecture, responding to the global financial crisis and climate change.
As home to China’s APEC Studies Centre since 1995, Nánkāi has made important contributions to discussions on the role APEC can and should play in securing regional development and prosperity, by fostering greater regional integration.
Australia was a key architect of APEC’s creation in 1989 and its elevation to a Leaders-level meeting in 1993.
We continue to see APEC as the pre-eminent regional forum for economic cooperation, providing a bridge between the major economies of Asia and the Americas and building lasting consensus on the importance of open markets, trade and investment. This had very real practical effects, with average tariffs across the region falling from 17 percent to 5 percent over the past 20 years, since APEC’s establishment.
Looking forward, we believe APEC can continue to play a key role in forging a common regional position on other issues as well, such as climate change and disaster preparedness.
And of course, we should also conduct a forward-looking debate on where the gaps are in our existing regional architecture.
But it also needs to be acknowledged that none of the existing regional architecture, as useful as it is, meets all the emerging challenges and needs of this incredibly dynamic region.
Many countries in the region agree that while mechanisms such as APEC, EAS and the ARF are doing important work to strengthen regional cooperation, what is currently needed is a regional mechanism that includes all major relevant powers and can address both economic and strategic issues together
o the Asia Pacific Community (APc) initiative was proposed by Prime Minister Rudd to address this gap.
We welcome China’s support for further discussion of the APc initiative, and its senior-level participation at the APc conference held in Sydney in December. An important result of the Sydney conference was the understanding reached among participants, and expressed by Prime Minister Rudd, that the APc did not require the establishment of a new regional mechanism; instead it could evolve from one of the existing groupings such as the EAS or APEC.
G20
At the global level, Australia and China are both members of the G20, and we enjoy close collaboration within this process.
Australia believes the G20 has clearly proven itself to be the best forum for global leadership on the financial and economic crisis and importantly, provides an equal seat at the table for developed and emerging economies, from all regions of the world
To this end, we were very pleased with Leaders’ endorsement at Pittsburgh of the G20 as the world’s premier international economic forum.
Australia has been among the strongest advocates within the G20 on the need to reform the IMF to allow China to make a greater contribution to global financial governance. It was pleasing that G20 Leaders agreed at Pittsburgh on specific targets for transferring IMF and World Bank voting rights to emerging and developing economies.
It is now important that we work together to ensure these commitments are implemented, and develop an ambitious agenda for this year’s Leaders Summits in Canada and South Korea.
Climate Change
Australia and China also have a lot of common interests in how we combat climate change. Both countries have a very real stake in the development of climate friendly technology that will enable our economies to continue to benefit from coal.
Australia is the world’s biggest coal exporter and China is the world’s biggest coal producer and consumer. It therefore makes sense that we have an active program of cooperation on clean coal technology and carbon capture and storage.
In 2008, Australian and Chinese experts completed a carbon capture demonstration project at Huá néng gāo bēi diàn power plant on the outskirts of Beijing.
Australia and China also cooperate bilaterally through our climate change partnership, which covers areas such as renewable energy technology; energy efficiency; agriculture; forestry and adaptation.
Both China and Australia agree that the climate change summit at Copenhagen last December did not deliver a perfect outcome.
Nonetheless, the Copenhagen Accord was a welcome step forward on climate change action. Australia and China helped to draft the Accord and both countries have stated their support for the Accord, as a document that provides useful direction for further international cooperation on climate change.
Australia supports continued negotiations under the UN framework convention on climate change (UNFCCC) and wants to continue to work closely with China and others to tackle climate change.
Complexities
As I said at the start of my speech, the intensity and diversity of our bilateral engagement will lead to differences of opinion from time to time.
This is only natural given the different historical, cultural and political factors that shape our two countries.
Decisions by our Government not to prevent certain figures from visiting Australia, or sensitive consular cases that arise in China, cannot simply be wished away. Such differences are part of a broadening and maturing bilateral relationship, and must be dealt with in a manner appropriate to both our countries.
One way to ensure that such complexities continue to be handled correctly is to develop further our contacts at all levels. For example, Australia’s Foreign Minister Smith has suggested the establishment of a bilateral 1.5 track dialogue – involving business people, senior academics and government figures – to discuss issues across the breadth of the bilateral relationship.
And just as importantly, we need to expand and deepen people-to-people contacts and cultural exchange.
We need to take full advantage of all the opportunities we can to promote a deeper understanding and appreciation of each other.
This is why Australia has made one of the most substantial international commitments to participating in this year’s Shanghai World Expo, why last Friday I signed with the Ministry of Culture an MoU marking the “Year of Australia” cultural promotion in China, why our Government continues to support the activities of the Australia-China Council, which for over 30 years has been promoting people-to-people links between our two countries, and why Chinese is one of the four priority languages in the Government’s new languages program which began operation last year – indeed Chinese (Mandarin and Cantonese combined) is already the most widely spoken language in Australia after English.
Most importantly – and this is a point I would like to conclude with today - there is already much positive feeling between the people of our two countries.
In 2009, Australia’s Lowy Institute – a highly-respected non-government think-tank – conducted surveys in Australia and China.
These surveys found that 91 percent of Australians believed we should undertake friendly and cooperative engagement with China, while a majority of those polled both trusted China to act responsibly in the world [59 percent] and disagreed with the notion that China’s rise presented a possible threat to Australia [57 percent].
The survey conducted in China found that 68 percent of those polled believed Australia was a country with attractive values, while 84 percent of Chinese believed Australia was a good place to visit, and 78 percent believed Australia was a good place to be educated.
I am greatly encouraged by these results, as they reinforce the warmth and growing understanding between our two peoples that I see frequently in my role as Australian Ambassador in China.
Conclusion
To conclude, a productive relationship between Australia and China, based on mutual interest and mutual respect, is clearly in both our countries’ long-term national interests.
Both sides have much to gain from this growing relationship.
Australia will continue to give priority to developing two-way trade and investment in ways which benefit both countries, both peoples and both economies.
We will work hard to give greater depth to the important cultural and education links that will promote greater understanding and good will.
We will continue to pursue constructive engagement with China on significant regional and global issues.
And above all, our engagement with China will continue to be constructive, patient and forward-looking, informed by both our countries’ long-term economic and strategic interests and a growing sense of confidence and optimism about our ever strengthening bilateral relationship.
Thank You