By Sergei DeSilva-Ranasinghe
As Australia’s most significant trading partner, China’s growing economic power is of major importance to Australia’s future prosperity. Australia’s Ambassador to China, Frances Adamson, who talked with Sergei DeSilva-Ranasinghe, spoke about progress made in the bilateral ties, Australia’s stance on China’s military modernisation, the changing nature of bilateral strategic, defence and security cooperation, and the key challenges in Australia’s relationship with China.
What is the current status of Australia-China relationship and what have been the main achievements in recent years?
The bilateral relationship is in very good shape. On 21 December 2012, we marked the 40th anniversary of the establishment of diplomatic relations with China, but it’s an anniversary we celebrated all throughout 2012.
On the trade front, in 1972, we had almost $100 million in bilateral merchandise trade; in 2002, it was over $21 billion; and in 2012, it was $118 billion. Of course, China has become Australia’s largest trading partner over this period, and we are China’s sixth- or seventh-largest trading partner. The central economic relationship has grown a lot over the last 10 years, with the trade in commodities underpinning and feeding China’s economic growth. Australia exported almost $39 billion worth of iron ore to China in 2012. Similarly, ever since China joined the World Trade Organization in 2001, services trade has also grown, albeit from a small base, as has the movement of people between both countries.
The broad status of the political relationship is healthy, with leaders, ministers and senior officials on both sides visiting each other regularly. Since late 2007, there have been about 50 Australian ministerial visits to China at the Federal level; State Premiers and other political leaders also visit China regularly. In the other direction too, Chinese leaders have been visiting Australia. In fact, all seven members of the new Politburo Standing Committee of the Communist Party of China have visited Australia at some time. General Secretary Xi Jinping visited Australia in 2010; Li Keqiang visited in 2009. So we know each other well at senior levels; these top-level links help build understanding and relationships, and will serve us well in the future.
As part of that political relationship, the Australian Government’s 2012 White Paper, Australia in the Asian Century, noted the need to create a high-level bilateral architectural framework for our relationship with China, and I strongly support that goal.
Our relationship with China is obviously not just about the flow of goods and services, but also about the story of our people. This has been very significant in the last decade with hundreds of thousands Chinese and Australian students and tourists travelling between the two countries—and building an increasing familiarity with each other’s society and people. In 2012, around 380,000 Australians visited China and more than 620,000 Chinese visited Australia. There are just under 120 000 Chinese students in Australia, and around 3000 Australian students in China. These are significant numbers and we’re looking to build on them, based on the objectives and pathways set in the Asian Century White Paper.
Cooperation in science and research has also picked up in the last decade, partly as a result of China’s own economic growth and increased focus on education and research. Even before that, we had a long and successful history of scientific and research collaboration, and we want that to continue. According to a 2012 report by our Science Department, Australia was China’s sixth-most prominent partner in joint international scientific publications, while China was Australia’s third-ranked partner. The entire CSIRO executive team came to China in mid-2012 for high-level meetings with their counterparts at the Chinese Academy of Sciences. And, of course, research collaborations between our universities are burgeoning.
As an example of the breadth of the relationship, our Embassy in Beijing is the only Australian Embassy in the world where the Reserve Bank of Australia is represented. We also have here in Beijing a permanent Treasury representative, as well as Australian officials responsible for customs, agriculture, trade, investment, defence, resources, tourism, culture, public affairs, law enforcement cooperation and immigration. We are engaged with the Chinese across almost every area of government policymaking and some areas of service implementation as well. We certainly want a well-rounded relationship.
One of the things I found striking in my first year as Ambassador is the depth and breadth of rich collaborations and discussions on policy ideas, whether it’s on urbanisation or aged care, services, or transport and infrastructure. Every year, we have a large number of delegations visiting in both directions, exchanging views on the sectors I just mentioned, and also other areas such as climate change. China has been searching for answers and policy ideas to deal with the issues they are facing—some of them are quite acute—but Australians also have a lot learn from the Chinese. It’s a genuine two-way approach.
How does Australia view China’s military modernisation programme?
Australia’s position was stated in the Asian Century White Paper released in October 2012. We accept that China’s military growth is a natural, legitimate outcome of its growing economy and broadening interests, and we do not take issue with China modernising its military. But we do encourage transparency in capability and intent. We think it’s important that China and other countries in the region explain the pace and scope of their military modernisation to build confidence and trust. At a practical level, Australia works with the People’s Liberation Army (PLA) to enhance mutual understanding, to facilitate transparency and to build trust in the region.
We’re talking not just about the rise of China, but also the rise of India, the Association of Southeast Asian Nations (ASEAN), and other countries in the region. We are talking about the growing economic weight of the Asia-Pacific and Indo-Pacific regions and a shift of global strategic weight to the region. So our language is not directed at China, but is more a statement of how we would like the countries within the region, and the region as a whole, to operate.
When you refer to China’s military capability and intent, what exactly do you mean?
Countries and governments in the region need to understand each other and be transparent about their modernisation processes, capability and intent. This is happening to some extent through a range of mechanisms, such as the Shangri-la Dialogue, the ASEAN Defence Ministers’ Meeting-plus, bilateral engagement between defence ministers, and engagement between leaders at the East Asia Summit and ASEAN. We are keen to see this habit of greater transparency develop further.
Obviously, Australia and other countries in the region are determined to preserve peace and stability. The East Asia Summit brings together the leaders of China, India, the United States, Russia, Japan, ASEAN and Australia, and other countries in the region. The opportunities for dialogue, multilateral or bilateral, within the East Asia Summit and regional forums such as ASEAN are an important vehicle for underpinning and maintaining peace and stability, which, in turn, supports economic growth and prosperity.
What is the current status of bilateral strategic, defence and security cooperation?
Australia and China are important bilateral partners in the region, and we are working together through regional mechanisms such as the East Asia Summit, ASEAN and APEC. It’s important for leaders to meet as a group, but opportunities for one-on-one meetings, like the one between Prime Minister Julia Gillard and Chinese Premier Wen Jiabao at the East Asia Summit in November 2012, are also necessary. More widely, we work with China in the United Nations, and of course, the G20.
The defence relationship is also developing well: we are moving into new areas while also building on 15 consecutive years of the bilateral Defence Strategic Dialogue. Defence is a significant part of the Australia-China relationship: it is not just about trade, investment and education.
The Australian Defence Force (ADF) works with the PLA on facilitating transparency and building trust. In May 2012, China’s Defence Minister, Liang Guanglie, and Australia’s Defence Minister, Stephen Smith, had a productive discussion in a formal ministerial dialogue on a range of defence issues of mutual interest. Australian and Chinese Defence Ministers typically meet each year, in a variety of settings. As major countries in the Asia-Pacific region, China and Australia have shared interests to ensure peace, stability and prosperity. A positive and mutually beneficial defence relationship serves the fundamental interests of both countries.
China has 22 defence strategic dialogues with other countries, but it has only two defence strategic dialogues at the level of the defence chiefs: they are with Australia and Pakistan. And as I said earlier, Australia and China have been conducting these Defence Strategic Dialogues for 15 years. Australia was the first Western country to conduct a practical humanitarian assistance exercise in disaster relief with the PLA in Chengdu in Sichuan province in October 2011; the second round was in Queensland with a contingent from the New Zealand Defence Force in late 2012.
We were also the first Western country to hold a joint live-fire exercise with the PLA Navy; that was conducted in 2010. In 2012, we had 60 individual practical activities in our annual military engagement program with China in five categories: (a) senior level engagement between ministers and between senior officers; (b) maritime engagement; (c) working level engagement, including defence college exchanges; (d) humanitarian assistance and disaster relief; and (e) peacekeeping.
In 2012, the HMAS Ballarat visited Shanghai followed by a passage exercise with a PLA Navy frigate, and the humanitarian assistance and disaster relief – ‘Exercise Co-operation Spirit’ – was held in Brisbane. Defence Minister visited China in May 2012. Three PLA Navy ships visited Australia in December 2012 after returning from counter-piracy duties in the Gulf of Aden. 60 practical defence-related activities every year is actually quite substantial, and we are seeing genuine progress in building knowledge and understanding of each other’s defence force. It’s an area that is not much written about, but actually is moving along quite well and has potential for future development.
Looking elsewhere, one of the unsung achievements that stand out for me is Australia-China cooperation in police and law enforcement. For example, the Australian Federal Police (AFP) has a particular role in safeguarding our national security and stability by responding to the challenges of transnational crime. The AFP has had a long-standing presence in China and built a relationship with China on a shared interest in combating transnational crime.
The AFP was one of the first foreign police services to have a presence in China, and our work with Chinese law enforcement agencies has earned us a positive reputation here and in the region. The AFP collaborates on investigative intelligence exchange and capacity building, and has developed strong relationships with the Ministry of Public Security and the National Narcotics Control Commission in China. As bilateral trade increases, the flow of goods and people also increase; criminals also become more adept at exploiting these opportunities. So police cooperation between our two countries will only need to grow, and, encouragingly, it grows from a very solid foundation.
What are the key challenges in the relationship?
The economic integration of the last 40 years has accelerated over the last decade, but further integrating our economies and overcoming barriers to trade remains important. For example, quite a bit more needs to be done for goods and services to move more freely and efficiently. There are few countries with such a high degree of economic complementarity as Australia and China, and both want to harness this advantage through trade liberalisation. We’re particularly looking at improving access for Australian service providers in the Chinese market, in areas such as banking and finance, and legal, architectural and environmental services. Australian companies are all represented in these areas, but obstacles under China’s foreign investment regulations put a limit on how far we can go. That’s why, in our discussions with the Chinese, we cast trade and investment liberalisation in terms of the ability of Australian companies to help China implement its 12th Five-Year Plan.
We’re keen to further liberalise our investment relationship with China. We have a pretty liberal investment regime in Australia – that’s certainly what the state-owned enterprises and other Chinese investors in Australia tell me. In turn, we’d like to encourage the Chinese to open up investment in sectors like mining, where we have many decades of experience as a world leader.
We also want to push forward what is already a good relationship in education, research, tourism and the arts. It’s a multi-faceted relationship, but as China’s economy grows and develops, and particularly as its middle class grows and develops, there will be new and increased demands for better food, more protein, and also travel and education. A number of Australian companies are now going beyond the major economic centres of Beijing, Shanghai and Guangzhou and exploring China’s second-tier cities.
Although there’s a healthy interest among the Chinese about Australia, we will always have the task of educating both communities about changes and developments in China and the opportunities for Australia. But there’s work to be done on the basic and more sophisticated levels of education, as discussed in the parts of the White Paper that focus on Asian literacy.
Beyond the bilateral agenda, the regional and multilateral areas of work are also important, mainly revolving around our joint membership in international organisations such as United Nations Security Council, the International Monetary Fund (IMF) and the G20. Australia has taken up its non-permanent seat on the Security Council at the United Nations for two years. China is a permanent member of the council and we’ll be working together on key regional and global security challenges. This is an opportunity to enhance our multilateral engagement, and it provides further opportunities for collaboration across a broad front.
In 2014, Australia will be chairing the G20 and China will be chairing Asia-Pacific Economic Cooperation (APEC), and we’re looking forward to working closely on the key economic, financial and trade policy issues during that time.
