Speech to the Australia China Chamber of Commerce Beijing

A Speech to Austcham, Beijing

Introduction

Gentlemen, let me begin by saying it's a great pleasure to be back in Beijing again. I haven't counted the number of times I've been to China in the eight and the half years I have been the Foreign Minister. But it would be many times and not just to Beijing, to Shanghai and Nanjing and a number of other places in that period of time, and I often make this observation, and we were discussing this at lunch today, my lifetime, and to put that into some perspective, I am 52, in my lifetime there have probably been two truly great changes for the good in international relations. We always focus on the bad things that have happened, there have been two great things that have happened for the good and one of those is the end of the Cold War, the collapse of the Soviet Union, the tearing down of the Berlin Wall, all that suite of issues and the second has been simply the extraordinary transformation that has taken place in this country, particularly over the last 30 years.

For me, I first came to China, excluding Hong Kong, I first came to China in 1982, I visited Beijing with Malcolm Fraser, our then Prime Minister. And the Beijing of today compared to the Beijing of 22 years ago is a completely transformed city. I was in Shanghai at the end of 2002 to launch the Australia Week during the Shanghai Festival and I don't think anybody could help but regard Shanghai as one of the most spectacular cities in the world, combining the glamour of the early part of the 20 th century along The Bund with simply extraordinary modernity of Pudong. So if I sound a little enthusiastic about China, I am. I think what has been achieved in China particularly in the last 22 years that I have known China is absolutely extraordinary.

The way this vast country has applied the principles of pragmatism to try to get its economy moving and has successfully done that and has built an economy which has expanded prosperity to so many people, so many members of the human race, we have to say that that really is a wonderful thing. China of course has, as its economy has grown, expanded its influence and if you had asked me ten years ago what I thought about the growth of China economically, I would have said what I am saying now. If you had asked me 10 years ago what I thought about the growth of China politically, I probably would have told you then it was introducing an element of uncertainty in the structure of the Asia Pacific region. That was very much a view that people held at that time. Yet, what we have actually seen is again traditional Chinese pragmatism applied to its growing influence in the region, where the Chinese have now, for us as Australians, become excellent partners. Not just in economic terms which I will come to at a moment, but excellent partners in terms of broader security issues. I am going from here to North Korea, to Pyongyang tomorrow evening, and during my 2 days here, one of the issues I will be talking to the Chinese leadership about is North Korea. The role that China has played in helping to bring together what is called the six party talks to try to address the issue of North Korea's nuclear programs, it deserves a great deal of praise.

I think the Chinese have shown remarkable adaptability to the new realities of the region in working with other countries around the region to try to achieve peaceful outcomes, and try to achieve successful outcomes for the region. So I must say overall on this visit, I have been very impressed for us as Australians. We have been able to not only develop understanding ourselves but generate some enthusiasm for the relationship. I have been impressed with the extent to which the Chinese have reciprocated, and worked very closely with us.

We've had some very impressive high level visits in both directions and one that stands out the most dramatically is the visit in October of President Hu Jintao to Australia and his party of course, it was a very significant party that came with him. The interesting thing about that visit was that it coincided with a visit to Australia by President George W Bush,. Some people in Australia say because we are close to the United States, and we unashamedly are, its an important component of our broader security and regional security, it makes it more difficult to deal with other countries in the region, particularly the great emerging power of China.

The fact that both of those leaders were in Australia in the same week, not just President Bush, but President Hu Jintao was able to address our Parliament and only American presidents in the past, as foreigners, have ever address our parliament. President Hu Jintao was the first non-Australia or American to address the Australian parliament. It simply demonstrates the point about how Australia is able to achieve a remarkable and very successful balance and indeed great progress in its relation with this region, with Asia, with the Asia Pacific which is our own region, but also maintain those links with the United States. We want to with China continue to build our ties, and I hope that my visit here will make a contribution to doing that.

Our economic statistics in terms of our relationship with China have really been very impressive. China after all is now our second largest export market and as an export market it has overtaken the United States Of America and we have seen a simply enormous growth in our exports to China, I think they grew by between 12 and 13 percent in the last financial year. I could go on, and our trade since 1996 since I became the Foreign Minister has nearly tripled with China and our exports have doubled in the past five years so they are quite impressive statistics, but what of the future?

When President Hu Jintao was in Australia, and obviously a little bit before, with some quiet discussion and negotiation behind the scene, we put together a proposal, a joint proposal that we would establish a scoping study to see what the practical issues were for the establishment of a free trade agreement between Australia and China. Now, for a country like Australia, a significant economy, not one of the biggest economies of the world, but I suppose Australia would be the 12 th or 13 th biggest economy in the world such a proposal is I think an very ambitious proposal. There is no doubt that free trade agreements with any country arouse sensitive issues, you've just seen in Australia, some debates, some of it high-grade debate, some of it low-grade debate, about the free trade agreement with the United States of America and that is now I hope on the threshold of being introduced. We have successfully negotiated a free trade agreement with Singapore and a free trade agreement with Thailand over the last few years, and of course 20 years ago, you will recall we concluded a free trade agreement with New Zealand, the so-called CER agreement. To move from these three free trade agreements to a free trade agreement with China, would be for Australia I think a very big step.

And as I say, there will be sensitivities, there will be debate in Australia about it, if this is to eventuate, and no doubt for China those problems would be, if you like, reciprocated. No doubt there will be sensitive sectors in China; no doubt there will be some opposition within those sensitive sectors to a free trade agreement with Australia. There is also, if you like, a threshold issue of whether Australia would recognise China as a market economy because I think our two sides agree on this because for our part, we would not enter into a free trade agreement with an economy we did not recognise as a market economy. And equally, China would not enter into negotiating a free trade agreement with a country that didn't recognise China as a market economy, so we both appreciate that that is the perspective that we bring to the negotiating table in the scoping study.

We were originally planning for the scoping study to be completed by about October next year. But that work is progressing very well, is progressing very fast, and it's conceivable that we would be able to complete that work a great deal sooner than October next year. Perhaps we would be able to complete sometime in the first half of 2005. And if we do conclude that work successfully and if we both come to the conclusion that it makes sense for Australia and China to enter into a free trade agreement, and there will be mutual benefits, and I believe by the way, there would be very substantial mutual benefits despite the potential difficulties and controversies in some sectors of our respective economies. Then we will have to address this question of market economy and if we are able to address that issue successfully, then I very much hope we can get into negotiating a free trade agreement with China.

When I look at the broad picture, rather than the details, rather than the mechanics of this, I think a free trade agreement between Australia and China is something which should be part of our national vision as Australians. I think we should be enthusiastic about trying to build this relationship a strategic step beyond where the relationship is today. And I think if we were to enter into a free trade agreement with China, that would have enormously in net terms, not for every industry, not in gross term for everyone, but in net terms an enormously beneficial impact on Australia, just as I believe that the free trade agreements we have entered into with a number of other economies in particular the United States of America, would be very beneficial to us as well. So that is a challenge for us, particularly over the next year, for the two of us, to see whether we can make the scoping study a success, and if a success, to see if we can work through the question of the market economy status of China , and if we can work through that, to see how quickly we can work through the negotiations for the establishment of a free trade agreement. But my own judgement is there is a real possibility, not a certainty, not a probability, but a real possibility that this can be achieved.

Let me just end up by saying, that over and and above those types of linkages that we have with China, I am a great enthusiast for expanding the people to people links. I mentioned earlier the Shanghai Festival, we through the Australian International Cultural Council of which I am the Chairman, we target individual festivals of a high profile nature where we think we can make a significant statement about the arts and culture in Australia. And what we did in the late 2002 in Shanghai I think was enormously successful, certainly in Shanghai but I think in other parts of China there is a much better understanding now of what our artists can bring to bear of what Australian culture is all about, the meaning of Australian culture which helps people to understand our country much better. We love a lot of countries around the world but we do not want people to think that our culture is the same as theirs, our culture bearing in mind the multi-cultural nature of Australian society, our history and our geography is entirely unique, and its something we need to keep projecting into the region the best we can. I think through the Shanghai Festival we did a very good job in terms of projecting Australian culture into China and we will look for more opportunities in the future to do that.

We also hope that in other ways, our people to people links can be built up, we have 43,000 Chinese students currently studying in Australia, but I suspect that that is only the beginning. I think we will find over the next few years, a very steady, a very substantial growth in the number of Chinese students studying in Australia. I hope we do because I think the high quality of Australia's education institutions offer great opportunities to Chinese students. We have, let me see, 176,000 Chinese visitors coming to Australia last year. Again, I hope that is only the beginning. I think those numbers inevitably will build and build very substantially. I recall a few years ago, when Australia became an approved tourist destination in China, and I do not think too many comparable countries and developed economies to this day are approved destinations, I am not sure of the list, but that obviously was a tremendous boon for us. That's why we are seeing a steady growth in number of Chinese coming into Australia for their holidays, as living standards rise here, inevitably people in China are going to want to travel more and we hope that we can lure them into Australia for their holidays quite apart from any other reason. And equally I am a great supporter of Australians coming here to China, be they such as yourselves coming here for business purposes to do business or if they are students to study for a semester or even for a longer period here in China, or be they just tourists spending their holidays here. I think those types of people to people links can never be underestimated.

So let me just say in conclusion, if I sound enthusiastic about China, I can't hide that, I am. I think what has happened in this country has been simply extraordinary. And I am very proud of the way Australia has so successfully engaged with China. And that the bilateral relationship the Chinese for their part too, have shown such an interest in building links with Australia, not just as a source of secure energy supplies, but as a partner in the Asia Pacific region. I hope my visit can make a small contribution to taking the agenda forward as well as dealing with the other easy and less than easy issues that the region has to cope with which involve both Australia and China. But I hope in the years ahead, we will continue to build the relationship at the pace we have been doing it up until now. And thank you to all of you in Austcham, I know you are a significant chamber here in Beijing, I hear you have about 250 members and its good that you have such a vibrant and united Australian business community. I very much appreciate the feedback we get from you. I know the Embassy, the Ambassador and others in the Embassy do. Their door is always open to you and we congratulate all of you for what you are doing here in China. Thank you very much.