Features | Politics | Oceania

The Australia-China Relationship

Australia’s establishment of diplomatic relations with China in 1972 by the Whitlam Government, together with Australia’s One China policy, has underpinned Australia-China relations for more than 30 years.

Australia’s establishment of diplomatic relations with China in 1972 by the Whitlam Government, together with Australia’s One China policy, has underpinned Australia-China relations for more than 30 years.

From those beginnings, and starting with trade in minerals resources from Western Australia, great things have emerged. The relationship between Australia and China is now broadly based and very productive. Our leaders and our governments are committed to taking this relationship to an even higher level.

It has become a relationship beyond trade, extending to a strategic dialogue, climate change, human rights, regional security and disarmament. It is also built on rapidly expanding people-to-people ties, with a growing number of Chinese tourists visiting Australian shores and more than 100,000 Chinese students studying in Australia.

When young Chinese study in Australia, both of our countries benefit. China builds its knowledge and its expertise; and when a young Chinese student returns home with the benefit of education experience in Australia, Australia gains an ambassador for life. The enhanced understanding developed through these links sees both our countries prosper.

The Australia-China relationship is now stronger and more broadly based than ever before. The range of issues we need to discuss is correspondingly much wider. From bilateral, to regional, to global.

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There is a range of regional institutions in which our shared aspirations for this region give us a chance to work together, where we have the opportunity to discuss our respective approaches to peace and security and prosperity in Asia. We have a strong record of cooperation in APEC and, more recently, in the East Asia Summit.

China is now a major global political and economic force, and makes its influence felt in world affairs. So Australia engages closely with China on a wide range of international issues affecting our national interests.

Significantly, the bilateral relationship is underpinned by frequent high-level visits. Prime Minister Rudd visited China last April, following on from earlier visits to Australia by President Hu Jintao and Premier Wen Jiabao.

Prime Minister Rudd returned to Beijing in August last year to attend the Olympics. The prime minister’s impressions of the host nation’s remarkable achievements were shared by the millions of Australians who watched the Games.

Both Australia and China are now committed to developing the relationship from one focused on economics to a more broad-based partnership. In pursuing that partnership, we acknowledge the reality that we have different approaches to key interests. These reflect our different history, our different political systems, as well as different interests.

For example, we don’t always see eye-to-eye on questions of human rights, but, as in any mature partnership, in the context of mutual respect and trust, these differences can be aired. Australia values very much our annual human rights dialogue in which these issues are discussed frankly between our two countries.

Today, we look to China to play a leading role in regional and global affairs, a role befitting its growing economic and political influence. China’s leadership has a fundamental and abiding interest in the security and stability of North East Asia, and a significant contribution to make in helping the region respond to challenges such as North Korea’s nuclear program, and the six-party talks process.

The world looks to China

The world looks to China to play its role as a responsible and constructive actor in regional affairs. We see the positive trend in relations between China and other regional powers as a very welcome development. One example is the recent trilateral discussion between China, Japan and the Republic of Korea.

This is of great importance to a country like Australia. Our prosperity, like that of China, is linked to the stability and growth of the Asia-Pacific region.

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We are encouraged by the dialogue that is taking place between the new United States administration and the Chinese leadership, which bodes well for cooperation on pressing international challenges, including the global economic crisis.

It is Australia’s view that addressing the current economic crisis requires unprecedented levels of international coordination, including the implementation of fiscal stimulus packages.

We welcome the vigorous stimulus measures China has adopted, which make a vital contribution to the task of restoring confidence, and will help the Chinese economy counteract the effects of falling global demand.

China is better placed than most to weather the global financial crisis, given its sound fiscal position and low public-debt burden, its huge current-account surplus and foreign currency holdings.

The Group of 20 is an international institution of developed and important emerging economies that, like the Financial Stability Forum, originated in response to the Asian Financial Crisis in 1997-98. The G20, which includes China and Australia, is the forum best equipped to lead the global response to the current crisis.

The scale of this crisis means the International Monetary Fund and other international financial institutions need a significant increase in their resources. As well, it’s vital that the weight of significant countries like China is properly reflected in international economic decision-making.

We welcome the recent expansion of the Financial Stability Forum to include emerging markets, including China. Like China, we want to see the G20 take a firm stand against protectionism. We are pleased that China shares this view.

Our two countries enjoy growing economic ties. In recent years, the rapid growth of China’s resource requirements has made this ever clearer.

Australia is one of the world’s great minerals and petroleum resources producers. We are a competitive and a long-term reliable supplier of key resources like coal, iron ore, liquefied natural gas and alumina, and have the world’s largest accessible reserves of uranium.

The size, complexity and the increasing openness of China’s economy have led to the deepening and broadening of our economic interests.

Australia also has a strong, well-regulated financial services sector. Our banks are safe. Of the world’s 100 largest banks, only 11 have credit ratings of AA or above. Those 11 include Australia’s four largest banks. Australia’s funds management industry is one of the largest in the world.

Australia also has world-class universities and research institutions. Many of them have established highly productive, long-term strategic relationships with Chinese universities, such as the comprehensive partnership agreement between Monash University in Victoria and Sichuan University.

Australian agricultural exports, as well as education and tourism sectors, have been making great progress in the Chinese market, and we are focused on the potential of significant provincial economies like Sichuan.

Our leaders have in recent months reaffirmed the importance of negotiations for a free trade agreement between Australia and China. We believe that Western China could benefit from the trade liberalisation that would result from a successful conclusion of the Australia-China free trade negotiations. It is our very strong hope that genuine progress in the negotiations is achieved this year.

It is remarkable how far Australia’s relations with China have come. What’s even more remarkable is the potential for further growth, given the critical role China will play in this the century of the Asia Pacific.

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Stephen Smith was speaking at Sichuan University.