E&OE
24 March 2009
Media conference at Sichuan University, China
Subjects: China FTA, Strategic Dialogue
STEPHEN SMITH: [inaudible, some missing text] Tomorrow, Wednesday, I’m still in Chengdu, having breakfast with Australian business representatives and then I’m off to Dujiangyan to inspect some of the aftermath of the earthquake including a hospital that’s been rebuilt with Australian support in Juyuan. Now I think I’m going to get to see some pandas, or at least some panda research, and then tomorrow evening I have a formal meeting and then dinner with the Mayor of Chengdu, Mayor Ge, and then I fly to Chongqing.
So, Thursday in Chongqing I have a formal meeting with the Mayor, Mayor Rong, in Chongqing and then a formal meeting with the Chongqing Party Secretary Bo.
Thursday afternoon I fly to Beijing and Thursday and Friday in Beijing I will conduct with Foreign Minister Yang, the second of our Australia-Chinas Strategic Dialogues. We had the first, well the inaugural Australia-China Strategic Dialogue in Canberra about this time last year or a bit earlier. And so this is the reciprocal, the return for the second Strategic Dialogue. And in addition to the Strategic Dialogue in Beijing I’ll have a formal meeting with Vice President Xi and a meeting with Standing Committee Member Zhou, who I hosted recently in Perth when he visited Australia.
So I’m very pleased with the visit, as I said in my answer to one of the questions to the students. I made a deliberate point of coming to the west, not just to underline the point that my great state, the great state of WA, has had a significant influence in the economic relationship between Australia and China, but to make that point that Australia appreciates very much that the economic potential and the engagement potential with China includes the west, includes parts of the country more than Shanghai and the eastern seaboard. So thank you very much for turning up, I’m happy to try to respond to your questions.
JOURNALIST: Why has it taken 17 months to get to visit Australia’s largest trading partner?
SMITH: Well we did the first Strategic Dialogue in Canberra at about this time or a bit earlier last year and Foreign Minister Yang and I agreed that we would do the second Strategic Dialogue in Beijing this year. And in addition to seeing Foreign Minister Yang in Canberra, we also met for formal bilateral meetings in Singapore, in the margins of ASEAN meetings, in Lima, in the margins of APEC, and also in Paris in the margins of the Afghanistan Donors’ Conference, and we’ve spoken on a number of occasions by phone.
There have been a number of high level visits to China last year, in particular by the Prime Minister, Mr Rudd, and a number of high level visits to Australia. So my visit to China, my first visit to China as Australia’s Foreign Minister essentially returns the Strategic Dialogue, the second Strategic Dialogue. It’s not my first visit to China, as I said in my remarks, but it is my first visit as Foreign Minister. But my contact with Foreign Minister Yang has been extensive.
JOURNALIST: You mentioned that China should have a voice in international organs like the IMF. Zhou Xiaochuan, the head of the Central Bank, came out overnight with a fairly radical proposal to introduce a new international reserve currency based on IMF special drawing rights. Is this something that Australia supports or is involved in talking to China about?
SMITH: Well firstly, I’ve been in transit so I haven’t seen that, either generally or in any detail. Secondly, the detail of that I’d leave to my colleague, the Treasurer Mr Swan. But when I was in the United Arab Emirates yesterday and was asked generally questions about China’s role in the IMF, I made the same comment, the same point that the Prime Minister has made and Treasurer Swan has made. Which is, with many of our international institutions, whether it’s for example the United Nations or the IMF, if we’re dealing with the international financial institutions, it’s important that the institutions reflect the modern day. And that’s why the Treasurer, the Prime Minister and I have been saying that the IMF does need to reflect the fact that China is an emerging powerful economy. And that needs to be reflected by the IMF arrangements. But I’m sorry I haven’t had the opportunity to look at the particular currency point that you raise.
JOURNALIST: Just on that point, Minister, do you think its worth raising China to a higher status in the IMF even though (inaudible)?
SMITH: Well, in the global financial crisis we have an issue that we can only address globally. There are two institutions, two international financial institutions, that in the course of this crisis have served, in my view, in Australia’s view, the international community well. The first is the G20 itself, and the second is the Financial Stability Forum, both of which arose as a direct outcome of the Asian financial crisis. That the premier international financial institution is the IMF, I simply repeat the point I made earlier. The IMF needs to reflect the modern day. It’s the financial institution point that’s comparable to the point that Australia makes about, for example, the United Nations Security Council. The United Nations Security Council is the premier international institution for peace and security. The permanent membership of the Security Council reflects the 1940s and the 1950s. It should reflect the modern day.
JOURNALIST: In meeting with your counterpart Mr Yang (inaudible), apart from the financial crisis one of the main issues between China and Australia is the Chinalco bid for (inaudible) Rio. Do you suspect that will be raised in the Strategic Dialogue?
SMITH: Well there are two things with Foreign Minister Yang. One, we will have a formal bilateral meeting and we’ll also have the Strategic Dialogue. The Strategic Dialogue, as it indicates of course, traverses strategic issues between Australia and China, on a regional and global basis. Certainly, I’m expecting we’ll have a conversation about the global financial crisis and how that has impacted upon China and Australia and the international community.
Certainly I’m expecting we’ll have a conversation about negotiations to be advanced for the free trade agreement between Australia and China. One aspect of that free trade agreement of course is an investment chapter, investment in both China and investment in Australia, so I certainly expect that we’ll have a conversation about the free trade agreement. I don’t know if we’ll have a conversation about specific individual applications for capital investment into Australia. In fact, I would think that would be unlikely. We will have conversations about strategic and general issues. That specific matter, as you well know, as with all the other FIRB matters that fall to the Treasurer, is a matter for the Treasurer to make in accordance with his judgement in the national interest. And you would have seen in recent days, that in the case of Chinalco, the relevant decision is being made to enable that to be properly assessed over the next 90 day period.
JOURNALIST: I’m from the Sichuan Daily and I’d like to ask your intention in visiting Sichuan. Has that included specific economic projects (inaudible) you’re thinking about doing here?
SMITH: I don’t bring any specific economic projects, what I do bring is the general view of the Australian Government and Australian companies and Australian industries need to look not just to Beijing and Shanghai but also to other parts of China, including the west. There is of course quite a deal of industry, Australian economic activity in Sichuan Province as we speak, both general economic activity and also activity related to reconstruction efforts for the earthquake. I’m meeting with Australian business representatives tomorrow to get a full appreciation of the extent of their activities. The Australian Government regards this area, this part of China as holding out very strong economic prospects for Australian companies to invest in.
Thank you.
[ENDS]
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