E&OE
26 March 2009
Interview - Phoenix Television, Beijing
Subjects: China’s role in the IMF, regional architecture, Australia-China FTA, Chinese investment in Australia, Australia-China Strategic Dialogue
JOURNALIST: The first question is regarding the G20 Summit. The Australian Government supports the Chinese Government to have more of a voice, to have more participation in that international financial organisation. Why does the Australian Government support China and what do you want from China?
STEPHEN SMITH: Well firstly, so far as the G20 itself is concerned, Australia very strongly believes that the G20 is the best international institution to address the current global financial crisis. It has a mix of developed and developing economies, north and south, east and west, and, importantly, in what will be the century of the Asia Pacific, it has a number of countries from Asia – Australia, China, Japan, the Republic of Korea, Indonesia. So our region, importantly, is very well represented. One of the things that we have to address is the international financial institutions, in particular the IMF. Australia has a strong view that the international institutions, whether it’s the United Nations or the IMF, have to reflect the modern day. They can’t reflect the world, or the world’s economy as we knew it, in the 1940s or the 1950s. So we very strongly believe the IMF should reflect the modern economic world and the modern international community. And that necessarily carries with it a greater role for China, to reflect the rise of China’s economic importance and influence.
JOURNALIST: But what can you get from China’s Government, if you support us? You must want us to support you, in which field in particular? I heard that Australia wants to participate more in Northeast Asia, in particular that you want to join the Six Party Talks. Is that right?
SMITH: But for us this is not a transactional thing. It is unquestionably in Australia’s economic interest, unquestionably in our region’s economic interest, and unquestionably in the international community’s economic and general interest that China plays its meaningful and appropriate role in the international community. And we can’t have, for example, we can’t continue to have the United Nations Security Council reflect the 1940s or the 1950s. And we have to have, at a time of global financial crisis, the premier international financial institution, the IMF, reflect the modern day reality. So, for us, it is not a transactional matter, it is what is in Australia’s, what is in our region’s, what is in the international community’s best interests. And that also, in our view, is of course a matter for China. It’s also our view that is also in China’s best interests. When it comes to North Asia, we have very strongly said that we support the Six Party Talks. We need to help ensure that North Korea’s nuclear ambitions are brought under effective control by the international community, but there’s also the chance that some regional architecture, some regional mechanism may evolve from the Six Party Talks. And if it does, then because North Asia is part of Australia’s interest, part of our region, then Australia would want very much to play a role in that.
JOURNALIST: To mark the economic relationship, we’ve had the 13th round of the FTA talks. How’s it going now?
SMITH: Well, Australia very strongly believes that it’s in Australia’s and China’s economic interests to effect a free trade agreement. I’ve just come from the west. I’ve just come from Chengdu and Chongqing. And it’s quite clearly the case that in the west of China there are enormous economic opportunities for Australian business, Australian industry. And a free trade agreement would unquestionably be in Chongqing’s and Sichuan Province’s economic interests, as well as in Australia’s interests. The free trade agreement negotiations are always tortuous. But in the end, it’s our very strong view that it’s in Australia’s economic interests, in China’s economic interests, but also in our mutual strategic interest to secure a free trade agreement. And that’s very much what we want to do. And my colleague Simon Crean, the Minister for Trade, he’ll be here in the next week or so, continuing to pursue these negotiations with the Chinese authorities.
JOURNALIST: But would you recognise China as having market economy status?
SMITH: We’ve already given that recognition. That recognition was given previously. So that’s not an issue. Often in these matters, trade negotiators will negotiate tortuously for a long period of time. In the end, in our view, it gets down to political will. And our view is that this would be in Australia’s economic interest but also in China’s economic interest.
JOURNALIST: What’s the possibility that the Chinalco and Rio Tinto deal will be approved?
SMITH: Well, generally of course Australia welcomes overseas or foreign capital investment. One of the reasons Australia has been a successful economy historically is because we’ve been an attractive place for overseas capital investment, and also a great trading nation. So we welcome very much overseas or foreign capital investment. Chinese capital investment in Australia is very significant. When it comes to individual investment decisions, from time to time, depending upon the scale of these decisions, they require the approval of the Treasurer of the day, my colleague Mr Swan. On the Chinalco matter, he’s giving that very careful consideration. It’s quite clearly a very important and complex matter, which he’s working through carefully, and he’ll make a judgement about whether that investment is in Australia’s national interest, which is the test that we apply. But the approach we take, our legal or legislative basis, is well known to the Chinese authorities, well known to China as it is to other countries. And Mr Swan will make a judgement about that in due course. But as a general proposition, we very much welcome foreign investment in Australia. It’s one of the things that helps to keep our economy strong.
JOURNALIST: How do you define “national interest”? How do you define that?
SMITH: Well, national interest is in very many respects a term of art, but it is whether you think the interests of your nation, the interests of your people, the interests of the community that you represent, will be advanced in the long term. And, as I say, there are a number of individual investment applications currently before the Treasurer. Chinalco is one, there are others, and he will make those individual decisions. As a general proposition, we welcome overseas capital investment and there has been a substantial amount of Chinese investment in Australia in the recent period.
JOURNALIST: Can you elaborate in more detail about your talks with Yang Jiechi tomorrow?
SMITH: I’m having the second Strategic Dialogue with Foreign Minister Yang tomorrow. We had the first Strategic Dialogue in Canberra, at about this time last year or a bit earlier. And Foreign Minister Yang and I agreed that we would do the second round in Beijing this year. So, we will talk bilaterally in the first instance, about the strength of the partnership between Australia and China, how high level visits to Australia and to China work very much to build the relationship, to build the personal contacts between our senior leadership. And then when we come to the Strategic Dialogue, we will cover the array of important regional and global strategic issues – whether it’s the global financial crisis, whether it’s peace and security, whether it’s Australia’s initiative for an Asia Pacific Community. I’m looking very much forward to another enjoyable and productive session with Foreign Minister Yang. We’ve had a number of meetings since the time I became Foreign Minister and I enjoyed my discussions with him very much indeed.
JOURNALIST: And President Hu Jintao will meet your Prime Minister at the G20?
SMITH: Yes.
JOURNALIST: And has he invited President Hu to visit Australia yet?
SMITH: President Hu has a standing invitation to visit Australia whenever it’s convenient for him to do so.
JOURNALIST: Would it be this year?
SMITH: Well, that’s a matter for the President, but he has a standing invitation to visit Australia whenever he wants to. And the same, of course, applies to Foreign Minister Yang, who was in Canberra, as I say, about this time last year.
JOURNALIST: OK, that’s all I need to ask.
SMITH: Thank you.
[ENDS]
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