China country brief
After establishing diplomatic relations with the People's Republic of China in 1972, Australia established an embassy in Beijing in 1973.
The Australia-China bilateral relationship is based on strong economic and trade complementarities, and covers a wide range of mutual interests. In 2014, the Australian Prime Minister and Chinese President agreed to describe the relationship as a "comprehensive strategic partnership".
Both governments have committed at the highest levels to building on our relationship and strengthening cooperation on important shared interests. At the same time, both sides acknowledge that Australia and China have different histories, societies and political systems, as well as differences of view on some important issues. Australia adheres to its one-China policy, which means we do not recognize Taiwan as a country. We maintain unofficial contacts with Taiwan promoting economic, trade and cultural interests.
Australia's growing diplomatic network in China includes the embassy in Beijing and consulates in Shanghai, Guangzhou, Chengdu, Shenyang and Hong Kong. There are also 11 Austrade offices across greater China, assisting Australian businesses to enter markets and promote Australia as an investment, tourism and education destination. Most Australian state governments are represented in China's leading commercial centres. Australia and China share around 100 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. The apex of this structure is the Annual Leaders' Meeting between the Australian Prime Minister and the Chinese Premier. Other dialogues cover bilateral, regional and global issues, including foreign and strategic relations, trade and economic cooperation, international security, law enforcement, development cooperation, climate change and consular matters.
Our international security engagement with China aims to improve mutual understanding, foster open communication and encourage cooperation. We have strengthened our defence relationship with China through senior-level dialogue, educational exchanges, reciprocal naval ship visits, and routine training exercises.
Law enforcement and related national security concerns, including transnational crime, cyber issues and counter-terrorism, are an important area of bilateral engagement as our economic and people-to-people links expand.
Climate change is another area of cooperation between Australia and China. We have a Bilateral Climate Change Partnership initiated by a 2004 MoU and enhanced by a 2014 MoU which provides for Ministerial Dialogue and practical, collaborative projects in areas of mutual interest.
Australia's approach to managing differences on human rights in China aims to be constructive and is based on dialogue. Australia raises a wide range of issues with China including freedom of expression, freedom of religion, treatment of political prisoners and ethnic minorities (including in Xinjiang and Tibet), torture, the death penalty, and the rights of legal practitioners and civil rights activists. Where appropriate, we also raise our concerns at appropriate multilateral fora such as the Human Rights Council.
Australia has largely phased out bilateral aid to China. In recognition of China's growing role as an aid donor, Australia and China signed a Memorandum of Understanding (MoU) on development cooperation in 2013, which was renewed in 2017. The MoU facilitates cooperation in shared development objectives on issues of regional or global importance. The first project under the MoU targeted malaria in Papua New Guinea.
Trade and investment
China is Australia's largest two-way trading partner in goods and services, accounting for 27.4 per cent of our trade with the world. Two-way trade reached a record $252 billion in 2019 (up 17.3 per cent year on year). Our exports to China grew by 23.4 per cent to reach the highest level ever ($169 billion), driven by demand for Australian iron ore, coal and LNG. China remained our biggest services export market, particularly in education (over 212,000 students in 2019, a 3 per cent increase year on year) and tourism (over 1.4 million Chinese visitors in 2019).
The China–Australia Free Trade Agreement (ChAFTA) entered into force on 20 December 2015. ChAFTA is an historic agreement that is delivering enormous benefits to Australia, enhancing our competitive position in the Chinese market, boosting economic growth and creating jobs. Businesses have taken advantage of lower tariffs under the agreement, with a utilisation rate of over 90 per cent in both directions. As at 1 January this year, 7,800 tariff lines have been eliminated under ChAFTA.
Chinese investment in Australia is a highly valued and growing part of the bilateral relationship. China is the sixth-largest foreign direct investor in Australia ($46 billion in 2019), accounting for 4.5 per cent of total foreign direct investment (FDI). In recent years, Chinese investment has broadened from mainly mining to include sectors such as infrastructure, services and agriculture. Australia's foreign investment review framework is established clearly in legislation providing openness and transparency. Australian FDI in China reached $16 billion in 2019. Our expertise in banking and wealth management services has seen financial institutions become some of the largest Australian investors in China.
Increasing numbers of Australian businesses are entering the Chinese market with great success. However—as with all cross border commercial activities—there are risks. Doing Business in China informs Australian companies about how best to manage risks and offers best-practice guidelines to dispute resolution.
The growth in Chinese tourism to Australia is supported through improved visa products and facilitation. This includes access for Chinese nationals to Australia's SmartGate, online lodgement for visitor visas and an additional online lodgement service in simplified Chinese language through the Australian Visa Application Centres (AVACs) in China. Visa fast track services (priority processing within 48 hours) and a 10-year visitor visa option are available for Chinese applicants for business and tourist streams.
Australians are increasingly purchasing products from China through online shopping sites. There are risks buying products from an overseas-based online seller and difficulties exist in obtaining a remedy from them. The Australian Competition and Consumer Commission (ACCC) provides information regarding shopping online.
Community and cultural links continue to develop strongly and play a vital role in the Australia-China relationship. Chinese migration started in the middle of the nineteenth century and Mandarin is now the second most spoken language in Australia after English. Chinese Australians have contributed significantly to the development of Australia and also foster people-to-people links with China. In addition to immigration, education, trade and tourism also bolster these links.
While travel restrictions as a result of COVID-19 have impacted international travel, Australia remains one of the most popular destinations for Chinese students wishing to study overseas. China continues to be Australia's largest source of overseas students.
In the other direction, China is a key destination for Australia's New Colombo Plan. 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 China.
Prior to the imposition of restrictions on international travel, China was Australia's largest inbound market in terms of visitor arrivals and total visitor spend. In 2018-19, there were over 1.4 million visits to Australia from Chinese nationals, which not only contributed to the Australian economy but also increased understanding about Australia in China.
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. On 29 March 2019, the Foreign Minister announced the establishment of the National Foundation for Australia China Relations. The Foundation will build links between our country and China, by bringing together the interests of State, Territory and local governments, supporting and identifying new opportunities for Australian and Chinese sectoral business cooperation, and funding work with cultural, sporting and educational institutions and the Australian-Chinese communities to strengthen understanding of each other's society and cultures and promote greater people-to-people engagement. The Foundation is based in Sydney, with Ms Pru Bennett, as Chair of the Advisory Board.
In 2014, Australia and China established a 1.5 track leadership forum, the Australia-China High-Level Dialogue. The Dialogue aims to enhance mutual understanding by bringing together senior Australian and Chinese government representatives with business, academic, and social leaders to discuss key issues affecting the relationship. These can include political and strategic issues, economic policies, and social and cultural developments. The inaugural High Level Dialogue was held in December 2014 in Beijing. The sixth Dialogue was held in January 2020 in Sydney. Australia's delegation was led by the Hon John Howard OM AC.
High-level visits and meetings
Recent high-level engagement includes:
- In January 2020, former Prime Minister the Hon John Howard OM AC co-chaired the Australia China High-Level Dialogue in Sydney with Mr Li Zhaoxing, Honorary President of the Chinese People's Institute of Foreign Affairs and former Minister of Foreign Affairs.
- In November 2019, Prime Minister Morrison met Chinese Premier Li Keqiang in Bangkok for the Annual Leaders' Meeting.
- In November 2019, Trade, Investment and Tourism Minister Birmingham visited Shanghai to lead Australia's delegation to the China International Import Expo (CIIE) and participate in ministerial discussions on World Trade Organisation (WTO) matters.
- In October 2019, Prime Minister Morrison met Chinese Vice President Wang Qishan in Jakarta.
- In September 2019, Foreign Minister Payne held a bilateral meeting with State Councilor and Foreign Minister Wang Yi on the sidelines of the UN General Assembly meeting in New York.
- In August 2019, Foreign Minister Payne and State Councilor and Foreign Minister Wang Yi held a bilateral meeting on the sidelines of the East Asia Summit Foreign Ministers' Meeting in Bangkok.
- In August 2019, Trade, Investment and Tourism Minister Birmingham visited Beijing for Regional Comprehensive Economic Partnership negotiations.
- In June 2019, Prime Minister Morrison met President Xi Jinping during G20 meetings in Osaka.
- In June 2019, Sports Minister Colbeck visited Shanghai.
- In January 2019, Defence Minister Pyne visited China and met Chinese Minister of National Defence General Wei Fenghe.
- In December 2018, Prime Minister Morrison met President Xi Jinping during G20 meetings in Buenos Aires.
- In November 2018, Prime Minister Morrison met President Xi Jinping during the APEC Leaders' Meeting in Port Moresby.
- In November 2018, Prime Minister Morrison and Premier Li Keqiang held their Annual Leaders' Meeting in Singapore.
- In November 2018, Foreign Minister Payne and State Councilor and Foreign Minister Wang Yi co-chaired the Fifth Foreign and Strategic Dialogue in Beijing.
- In November 2018, Trade, Investment and Tourism Minister Birmingham visited Shanghai leading an Australian delegation to the China International Import Expo.
- In September 2018, Foreign Minister Payne met State Councilor and Foreign Minister Wang Yi during the UN General Assembly in New York.
- In May 2018, Trade and Investment Minister Ciobo visited Shanghai.