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.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
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.
Stephen Smith was speaking at Sichuan University.