People's Republic of China country brief
The Australia-China bilateral relationship is extensive and continues to grow in breadth and depth. It is based on strong economic and trade complementarities and assisted by a comprehensive program of high level visits and wide-ranging cooperation activities.
Australia and China have a growing range of common interests, with increasing collaboration in multilateral and regional forums. As Australia hosts the G20 and China hosts Asia Pacific Economic Cooperation (APEC) in 2014, we are working together to harmonise the respective agendas and objectives. Australia and China share a strong interest in increasing the G20’s focus on the economic challenges and opportunities in the Asia-Pacific. This includes removing trade barriers, increasing infrastructure investment and creating more jobs.
Our bilateral political engagement is extensive, though both sides acknowledge that Australia and China have different histories, societies and political systems, as well as differences of view on some important issues. Both are committed to constructively managing differences if and when they arise. Australia adheres to its one-China policy, which means it does not recognise Taiwan as a country. We maintain unofficial contacts with Taiwan primarily to promote our legitimate economic, trade and cultural interests.
Australia's growing diplomatic network in China is one of our most extensive. It includes the embassy in Beijing and consulates in Shanghai, Guangzhou, Chengdu and Hong Kong. There are also 14 Austrade offices across greater China, assisting Australian businesses to enter markets and promote Australia as an investment, tourism and education destination. Australian state governments are also widely represented in China's leading commercial centres. Australia and China share over 80 sister-state/province and sister-city relationships.
The breadth of the bilateral relationship is also demonstrated by the range of consultation mechanisms that Australia and China have established to advance cooperation and manage differences. Dialogues cover bilateral, regional and global issues, including trade and economic cooperation, defence, regional security, disarmament, development cooperation, human rights, climate change and consular matters.
Our defence engagement with China aims to improve mutual understanding, foster open communication and enhance cooperation. Over the past few years, we have strengthened our defence relationship with China through senior-level dialogue, educational exchanges, reciprocal naval ship visits, and humanitarian assistance and disaster relief exercises.
Our approach to managing differences on human rights in China aims at being constructive and is based on dialogue. The Australia-China Human Rights Dialogue is an important forum for frank exchanges on human rights and for identifying areas where Australia can help China implement international human rights standards, including through our human rights technical cooperation program. The most recent round of our bilateral Human Rights Dialogue took place in Beijing on 20 February 2014. We raised a wide range of issues including freedom of expression, freedom of religion, treatment of political prisoners and ethnic minorities, Tibet, torture, the death penalty, women's and children's rights, and the rights of legal practitioners and civil rights activists.
Australia recognises that China has made progress over the past 30 years and that the Chinese people enjoy a greater degree of personal freedom than before, but our views on human rights still differ. The Chinese also acknowledge these differences and that there are continuing human rights failings in China that need to be addressed.
Australia has largely phased out bilateral aid to China. A small number of ongoing projects provide targeted assistance, including the long-running human rights technical cooperation program and a program helping to strengthen the health system in the Tibet Autonomous Region. In recognition of China’s growing role as an aid donor, Australia and China signed the Memorandum of Understanding (MoU) for a Development Cooperation Partnership in 2013. The MoU allows Australia and China to work together to explore practical means to strengthen cooperation and collaboration, and achieve shared objectives on issues of global or regional importance. The first project under the MoU, targeting malaria in Papua New Guinea, is expected to begin implementation in 2015.
People to people links
Community relations and cultural links are developing strongly and play a vital role in the Australia-China relationship. The Chinese community in Australia is an important part of our people-to-people links with China, and high growth in tourism and education has bolstered these links. China is our second largest source of visitor arrivals with 709,000 arrivals in 2013. Australia is one of the most popular destinations for Chinese students wishing to study overseas. China is Australia’s largest source of overseas students with over 119, 000 students in 2013. Diverse cultural activities are raising the profile of Australia, encouraging tourism and business, and fostering cultural ties between the countries.
China has agreed to be involved in the New Colombo Plan from 2015, which will encourage an increased two-way flow of students between our countries. The initiative will help to lift knowledge of China in Australia and strengthen people-to-people and institutional relationships, through study and internships undertaken by Australian undergraduate students in the region.
Australia-China engagement in education, science, business and culture brings significant economic, social and cultural dividends to both countries and adds value to the bilateral relationship. The Australia-China Council (ACC) promotes such engagement. The ACC was established by the Government in 1978 to foster people-to-people relations between Australia and China.
During Prime Minister Abbott’s visit to China in April 2014, he and Chinese Premier Li Keqiang agreed to establish a 1.5 track leadership dialogue, the Australia-China High-Level Dialogue. The dialogue will recast and augment the previous officials’-level Australia China Forum. It will be the premier bilateral 1.5 track meeting that examines the entirety of the Australia-China relationship. The aim of the Dialogue is to enhance mutual understanding between Australia and China by bringing together senior Australian and Chinese government representatives and business, academia, and social leaders to discuss and debate key issues impacting on the relationship. These can include political and strategic issues, economic policies, and social and cultural developments.
Trade and Investment
The Australia-China economic and trade relationship continues to steadily expand. China is now Australia's largest two-way trading partner in goods and services (valued at more than A$150 billion in 2013), our largest goods export destination (A$95 billion in 2013), and our largest source of merchandise imports (A$47 billion in 2013). The Government is pursuing a number of initiatives to strengthen and diversify this relationship.
Economic diplomacy is at the core of the Government’s international engagement. This is why we are bringing together activities in trade, growth, investment and business. With a firm focus on outcomes, we are implementing this agenda in China by negotiating the Australia-China Free Trade Agreement (FTA), finding new Chinese investors to invest in sectors such as infrastructure and agriculture, promoting tourism and building linkages in agricultural research.
The top trade policy priority is to conclude the FTA. Concluding the FTA will provide extensive opportunities to Australian businesses, removing barriers to trade with our biggest market for services, resources and agriculture. Australia’s economy could benefit from higher Chinese investment as a result of the FTA, increasing our productive capacity in areas such as resources and agriculture.
Australian services firms, including in financial, consulting, legal, education and telecommunications sectors, could benefit from improved access to the China market and through their role as facilitators of other trade. Importantly, our agricultural exports will benefit from improved competiveness in areas such as dairy, horticulture, meat and wine.
The Government has been promoting its open investment regime and Foreign Investment Review Board process, which continues to attract Chinese investors. The stock of Chinese investment in Australia is now more than fourteen times the level it was in 2005 at $31.9 billion, with net new investments of $9.3 billion in 2013.
Increasing numbers of Australian businesses are entering the Chinese market with great success. However – like all cross border commercial activities – the benefits of doing business in China are coupled with considerable risks. The ‘Doing Business in China’ initiative continues to inform Australian companies about how to manage the risks and offers best-practice guidelines to dispute resolution.
Chinese business visitors will benefit from the increased flexibility offered by a new three-year multiple entry visitor visa, which was recently announced by the Minister for Trade and Investment, the Hon. Andrew Robb and the Minister for Immigration and Border Protection, the Hon. Scott Morrison.
In April 2013, Australia and China commenced direct trading between the Australian dollar and the Chinese renminbi. Direct trading should help to lower currency conversion costs, facilitate the currencies’ use in bilateral trade and investment, and promote financial cooperation between our two countries. Australia and China are continuing efforts to build the financial relationship, with the central banks of Australia and China working on introducing clearing and settlement arrangements in Sydney.
High level visits
In April 2014, Prime Minister, the Hon. Tony Abbott and Chinese Premier Li Keqiang held the second leaders meeting in Sanya, China. During this visit the Prime Minister led a delegation of high-profile Australians, including three ministers, several state premiers, a chief minister, and 30 senior business leaders. The Minister for Trade and Investment, the Hon. Andrew Robb, also led a delegation of more than 700 representing over 500 organisations to Guangzhou, Chengdu, Shanghai and Beijing as part of the largest ever trade mission to leave Australia. The four-day mission was part of Australia Week in China (AWIC), a Government initiative to enhance Australia’s trade, investment, education and tourism engagement with China.
The Minister for Trade and Investment met with the Chinese Commerce Minister, Dr Gao Hucheng on 3 June at the Joint Ministerial Economic Commission meeting in Canberra. The Ministers discussed a range of trade and economic issues including the Free Trade Agreement, the G20 and APEC.
The inaugural Strategic Economic Dialogue (SED) meeting between the Treasurer, the Hon. Joe Hockey, the Minister for Trade and Investment and Chairman of the National Development and Reform Commission, Mr Xu Shaoshi, was held in Beijing in June 2014. The Dialogue provided an opportunity for Australia and China to explore opportunities for closer economic ties and to discuss issues within the global economic environment.
In September 2014, Foreign Minister, the Hon. Julie Bishop and Chinese Foreign Minister Wang Yi held the second Foreign and Strategic Dialogue (the first was held in December 2013). The Ministers discussed a range of bilateral, regional and global issues, including the current situation in Iraq, Syria and Ukraine. They also explored ways to increase cooperation in regional and multilateral forums where Australia and China have shared interests.