Address to 2009 Australia-China Business Forum
Friday, 12 June 2009
Thank you Michael for that very kind introduction.
I am delighted to have the opportunity to speak at this 5th Annual Australia-China Business Forum and I congratulate Michael Johnson on his efforts in promoting this forum.
I read that its stated aims are to “educate and enlighten Australian business owners wishing to learn more about the opportunities, as well as challenges, of doing business in China.”
Recent events and media coverage have rather focussed on the flip side of that coin. Chinese business owners and the opportunities and challenges of doing business in Australia seems to be more topical.
Australia and China have a strong and growing economic relationship, and coming from Western Australia I am acutely aware of the fundamental importance of that relationship to Australia and indeed Western Australia’s ongoing prosperity.
As a Cabinet Minister in the former Coalition Government, I see the enhancing of that relationship as one of the great success stories of the former government.
The previous government bequeathed not only a significant economic legacy to the Rudd Labor Government, but also a significant foreign policy legacy which was inherently solid, balanced and consistent.
Within a coherent foreign policy framework, Australia was well positioned to work effectively with our key allies and partners in an increasingly dynamic international environment.
Our alliance with the United States was enhanced through our strategic military commitments, our closer security and intelligence ties and our increasing trading relationship from the signing of a US-Australia free trade agreement.
We maintained our strong strategic, security and trade partnership with Japan, strengthened our relationships with Indonesia and India, and throughout those years Australia was an integral contributor to the major strategic and economic debates in the Asia-Pacific.
Significantly, the Coalition was able to forge a new relationship with China, the emerging economic power of the 21st century.
Our policy was to embrace China as part of the Asia-Pacific architecture and to encourage China to be a greater part of the solution to global issues. We increased engagement on security and trade issues with China, recognising that we had common interests in protecting and promoting our respective economies.
The Coalition was quick to seize the opportunities presented by China’s growing economic, political and strategic weight. On any objective view the former government successfully managed relations, focussing on shared interests while acknowledging our differences on a couple of touchstone issues including democracy and human rights.
One of the previous government’s achievements with China was our work to expand trade and investment ties with China, particularly through a bilateral free trade agreement that was initiated between our two countries.
We are disappointed that the Rudd Government has been unsuccessful in concluding a free trade agreement with China to date. In fact it was reported in the Australian on 11 May 2009 that “no further FTA discussions are scheduled with Beijing since the talks stalled five months ago”.
The Coalition believes the need for a Free Trade Agreement is still clear. China is our second-largest merchandise trading partner (after Japan). According to Department of Foreign Affairs and Trade figures, two-way trade with China reached almost $68 billion in 2008, an increase of 28 per cent year-on-year, and resources made up 86 per cent of these merchandise exports, and China is Australia’s second largest source of imports after the US. So a free trade agreement makes sense.
Back in 2006, I attended the Boao Forum in China and later had discussions with a number of Chinese representatives about the progress of the free trade agreement and I experienced and witnessed considerable good will for furthering the free trade discussions between Australia and China. There were some obvious sticking points, particularly with regard to services but I felt that real progress was being made.
At the time I was also the Minister for Education and I held some very fruitful discussions with education authorities, for China was, and is our largest source of international students, with more than 120,000 Chinese students studying in Australia.
There are great opportunities for the development of deep personal links between our countries through our young students. It’s my personal belief that if we foster two-way, and I emphasize two-way, student exchange we’ll achieve a much greater understanding between our countries, our culture, our political systems and our societies. It’s probably the purest and best form of diplomacy.
The Coalition in Opposition remains committed to a policy of positive and productive engagement with China – an approach that is measured and balanced.
Recent events indicate that the Rudd Government, in contrast, seems somewhat confused about its policy towards China.
The Prime Minister when in Opposition encouraged the myth that he was a China expert, based it seems on a stint in Beijing in the early 1990s as a mid level bureaucrat and the fact that he speaks Mandarin.
Indeed such was his encouragement of this myth that prior to the election he was being dubbed the “Manchurian Candidate” by some in the Australian media and subsequently by the international media.
However, dare I suggest, his forays into foreign policy since the election, and there have been many, have raised questions about his skills and his experience in diplomacy generally and also in relation to his claimed expertise in regard to China.
It is hard to imagine a seasoned diplomat leaking to the media a false version of a private telephone conversation with the President of the United States, or seeking to swap places on an internationally televised panel so as not to be seen sitting next to the highly respected Madam Fu, a former Chinese Ambassador to Australia.
The Prime Minister has also been accused of cynical games with the Australian media regarding visits of high ranking Chinese officials – notably the recent visit by the Minister for Propaganda, Media and Ideology which it seems was a secret to everyone in Australia but not to anyone in China. It’s hard to know if the Prime Minister is embarrassed or over awed, but either way it sends a very confusing message.
But of particular concern has been the Government’s poor handling of its Defence White Paper which has attracted negative commentary in the Chinese and Australian media. The White Paper made the highly contentious assumption that Australia’s greatest threat would be from a conventional military attack from China.
The Coalition rejects this premise, and sees no scenario where this could occur within the foreseeable future.
But if we accept the assumptions in the White Paper, and I don’t, the Rudd Government is saying that on the one hand China is the saviour of the Australian economy and on the other hand it is a threat to Australia’s national security. No wonder Beijing has raised eyebrows.
The Rudd Government is also sending confusing signals regarding its approach to foreign investment from China. While it has avoided having to make a decision on the proposed Chinalco investment in Rio Tinto, the Government needs to quickly settle its policy approach on foreign investment, particularly from state-owned entities, and communicate it more effectively.
It is incorrect to suggest that Australia does not want Chinese investment. We do. But the Rudd Government hasn’t delivered a convincing policy rationale for foreign investment in general or more particularly where issues of state-ownership or control or sovereign wealth funds are concerned.
This puts at risk the good work done over many years in building trust and cooperation with China.
I believe that at the same time the Rudd Government must do more to encourage China to free up its foreign investment framework to allow greater foreign investment from Australian companies into China. There is great untapped interest from Australian companies in further investment in China.
Australia’s mineral and energy wealth, and our geographic location, position us as an increasingly important supplier of resources to the growing economies in our region, including China. And it is essential that we remain a competitive and reliable and stable supplier of exports. We must not return to the old days of industrial unrest in the mining sector, for example in the Pilbara in the 1970s when our reputation as a reliable trading partner was severely compromised by strikes and disputation. And as the Government continues its battle, feigned or otherwise, with the unions, we must ensure that any changes to our employment law do not compromise our reputation as a reliable trading partner.
So it is my view that there must be a more sophisticated and mature approach to the relationship than we have seen thus far from the Rudd Government. But of course there is so more to our relationship than just the economic relationship.
There are so many challenges where Australia and China will work together and many issues where we will look to China to look resolve some very difficult issues, for example the tensions on the Korean peninsular.
When in government, the Coalition was involved in a number of initiatives to deepen our relationship. Take the issue of climate change. Based on current trends, China will eventually become the largest global emitter of greenhouse gases and we understand that China is making efforts to reduce emissions.
Both countries are members of the Asia-Pacific Partnership on Clean Development and Climate (APP), which the Howard Government strongly promoted.
Australia sees China as a possible market and strategic partner in the development of clean coal technology. China is developing its nuclear power capacity as a solution to curbing greenhouse gas emissions and Australia has large uranium reserves that will support that expansion.
Let me touch briefly on human rights. I recall in the lead up to the Beijing Olympics there was considerable controversy about the issue. As somebody who attend those Beijing Olympics can I say it was one of the most memorable and positive experiences of my life and I thought that Beijing and the Chinese people deserve great accolades and tributes for the Beijing Olympics which were surely one of the most successful the globe has ever seen.
On the issue of human rights, the Coalition has always been committed to fundamental human rights – the rights of the individual are one of the founding values of the Liberal Party. At the same time we are mindful of the need to respect the sovereignty and legal systems of other nations. Where due legal process is followed, we recognise that generally we must respect the decisions of governments in regard to their citizens.
Our approach is to manage differences aimed at being constructive and based on dialogue. So with those principles in mind, back in 1997 the former government initiated a new bilateral dialogue with China on human rights. The Australia-China Human Rights Dialogue – in fact the 12th meeting was held in Canberra in February of this year – and that promotes exchanges on human rights and aims to identify areas where Australia can help China implement international human rights standards including through human rights technical assistance program, for example enhancing China’s legal system. The next round of talks to be held in Beijing is scheduled to take place in 2010.
But as always with bilateral relationships it is the people-to-people links that are the most important. Entities such as the Australia-China Council has promoted people-to-people links for some time. Its current priorities are built under education and science; economics and trade; society and culture. And an important part of the education and science theme is the Australian Studies in China programme which provides funding to Australian study centres in Chinese tertiary institutions and universities.
Other activities such as the Australian Film Festival held in major Chinese cities this year, raised Australia’s profile and fostered cultural ties and encouraged tourism and of course business. And speaking of tourism, I was interested to see that in 2008 over 356,000 Chinese visited to Australia, and that is an extraordinary number – our fifth largest source of tourists, about 7 per cent of the total.
And here in Australia we have such a strong base upon which to grow our relationship with the Chinese community in Australia. About 500,000 Australians claim Chinese heritage and that is an incredible base – a foundation for increasing our bilateral relationship.
Many believe that this will be the Asia-Pacific century. Both China and Australia will remain major players in the region.
Australia and China have long term mutual interests and an ongoing constructive relationship. We need to be open an honest with each other.
We already have impressive economic ties and they will only continue. We need to see further progress towards a more strategic partnership in the economic sphere, our economies are complementary and we need to develop a stronger framework for further cooperation including, I would suggest, through a free trade agreement.
Education and recreational travel will grow in importance in our relationship and help forge stronger people-to-people links.
We in the Coalition welcome further engagement and a broader and deeper dialogue with China, including in the cultural sphere, to develop better understanding between our two peoples. And we in the Coalition see China and Australia as important stakeholders in furthering prosperity and peaceful cooperation in our region.
If I were asked to sum-up the relationship, two words come to mind – mutual respect.
That is the key to our ongoing relationship.
I am delighted to have been here this evening. Thank you very much.
