Australian Commonwealth Coat of Arms

E&OE

5 February 2008

Joint Press Conference with Chinese Foreign Minister

Subject: Australia-China relations

STEPHEN SMITH: Well, thank you for turning up. I'm very pleased to again welcome Mr Yang, the Foreign Minister of the People's Republic of China to Australia. This is not the first visit that Mr Yang has made to Australia, but it's his first visit as foreign minister. And I'm very pleased to welcome him so early in the new Australian Government's term.

We have had two meetings this morning, in a formal sense; a bilateral exchange between Australia and China, and then the first of the strategic dialogues between Australia and China. And they were very productive, enjoyable, and useful conversations. We traversed the range of issues that go to Australia's and China's bilateral relationship. And we also, in the strategic dialogue, dealt with a range of issues of mutual concern.

In terms of the strategic dialogue, we traversed north Asia, and the relationships between Australia and China; Australia and China and the United States; Australia, China, and Japan; and Australia, China, and India; and touched upon some of the potential sensitive issues in that area: the Korean Peninsula and Taiwan.

We also dealt with areas and countries closer to home, so far as Australia is concerned: the importance of the relationship between Australia and Indonesia, and the responsibility which Australia sees to be a good international citizen in the Asia Pacific area, particularly in respect of small or fragile Pacific Island states.

The relationship between Australia and China is a very, very strong and productive one. We are now into our 36th year of diplomatic recognition. And one of the proud things which comes from being a Labor foreign minister is that it was, of course, Gough Whitlam's work which saw Australia recognising China, and being one of the first countries to recognise China with the adoption, over 35 years ago, of Australia's One China policy, and recognition of China.

Since that time, the relationship has blossomed, and we now have a very, very important economic relationship with China. Our economies are now very complementary. That's particularly the case so far as minerals and petroleum resources are concerned. But it's wider than that: education services, financial services, and the like. The economic and investment relationship between Australia and China is now very important. And China has recently, of course, become Australia's single largest trading partner.

And today, we see the relationship going to the next level with the first of the strategic dialogues.

Mr Yang and I have agreed that I will go to China in the course of this year, where we will have in China the second strategic dialogue.

Mr Yang is from Shanghai – I think there's also a side deal that Mr Yang comes to Perth, and I also go to Shanghai – but I look forward to my visit to China. We have agreed that high level exchange at ministerial level between Australia and China is very important and very fruitful for the relationship. We also touched upon the importance of regional issues and regional arrangements.

The involvement and engagement of both China and Australia in the region is very important. And we have been very grateful to China for its support of Australia's role in the Asia Pacific. And finally, one of the issues which the new Australian Government wants to take to a higher level than before: we've both agreed on the importance of reform to the United Nations, and Mr Yang welcomed the fact that the new Australian Government proposes to play a greater role in United Nations affairs, and sees a greater role for the United Nations in the international community in the modern day.

So it's been a very good and productive morning. We have started with breakfast with the Prime Minister, where we had a useful conversation with the Prime Minister over breakfast.

And since then we have had the formal bilateral talks, and the first of the strategic dialogues. And we have just come from lunch where I have got an informal report of the progress of the preparations for the forthcoming Olympic Games, for which, of course, we wish China all the best.

Can I conclude by saying, in the course of conversations, we also wish China all the best in dealing with the very difficult climate circumstances that have beset China in the recent week or days. Our conversation naturally went to climate change, where we underlined the importance of both developed and developing nations making emissions cuts to grapple with climate change.

And Australia and China look forward to working cooperatively, so far as climate change is concerned, both in a bilateral sense, but also in a regional and a multilateral sense.

So Mr Yang, we're very pleased to have you here. And I'd be pleased if you could make some remarks.

Thank you very much.

YANG JIECHI: Thank you, Minister Smith. Thank you everybody for coming to this press conference. This is my first visit to Australia as China's Foreign Minister. I was very glad to receive this kind invitation from Foreign Minister Smith, and to come here for a bilateral consultation, and therefore starting the strategic dialogue between the two sides. This morning I had breakfast with Prime Minister Kevin Rudd. And then, I had a discussion with Minister Smith.

I think that the discussion, the talks, were very useful and productive. China and Australia are both important countries in the Asia Pacific region. It serves the fundamental interests of our two peoples and our two governments to work together for the important interests of our two countries, and for peace, stability, and prosperity in the Asia Pacific region and in the work and the home.

I think, though, we have reached quite a lot of consensus. For instance, both sides have decided to maintain and increase high level exchanges and contacts. You can expect quite a few high level exchanges and visits between us. I have issued a formal invitation to Foreign Minister Smith to visit China later this year. I am very glad that he has accepted my invitation. Of course, next time when I come, I will certainly go to Perth, a city I have visited a number of times. But I can do with another one or two or a dozen visits, because it's one of the most important cities here in Australia.

And we also believe that it's important to further expand the areas of cooperation between our two sides in the trade area. Now, China has already become the number one trading partner for Australia. And Australia is also doing quite well in China. We import lots of material from Australia; not only that, we also import advanced equipment from Australia.

So we discussed how to increase our trade in the advanced equipment area.

And we believe it is important for our two sides to have more exchanges in other areas: for instance, science and technology, cultural education, health, and so on. I'm proud to say that 90,000 Chinese students are studying in this country. And last year, about 300,000 Chinese came to tour this country.

So in future, there will be more Chinese coming this way, and this is one of the ways to further cement our friendship.

And certainly, we welcome Australian students to visit, or study, in China. And we thank Australia for taking an active part in various cultural activities between the two sides, and particularly, you have decided to participate in the World Shanghai Expo, the World Expo, in the year 2010. I think this will be one of the landmarks, the highlights of the Shanghai World Expo.

And we thank you very much for assisting us with the preparation for the Beijing Olympics. The Sydney Olympics was a great success. We hope that we can do equally well this time and I'm sure that Australian athletes will do fabulously well in Beijing.

And then we also discussed the importance of expanding our cooperation in international and regional fields. And this actually slides into the strategic dialogue phase of our discussion.

When we look at the Asia-Pacific region, I think both agree that the economy is developing. It's a vibrant area and both also agree that there are still many challenges lying ahead, and there's a disparity in terms of wealth and development. And we also agree that the situation is generally calm, but there are also some problems that need to be dealt with and in terms of regional integration, there are quite a few mechanisms, all kinds of conferences and organisations, that because of the diversified nature of this region, so there's even more work to be done.

China and Australia are both members of the UN and both members of APEC and AIF and the East Asia Summit. We are ready to work even more closely with the Australian side and we will welcome a more important and more active role by Australia in international and regional affairs, for the sake of maintaining and promoting peace, stability and prosperity.

So this is a very good start of the strategic dialogue. I would like to thank our host for his kind hospitality and I would like to thank the Government for its kind hospitality to my delegation and myself. And I would also like to express our appreciation for Australia adhering to the One China Policy, and I'm looking forward to working very closely with my colleague – although a new colleague, but it seems to me that we have known each other for quite some time already – to work for this very, very important relationship between us, so as to contribute to the blossoming relationship between our two countries and to promoting peace, stability and prosperity in the region and in the world. Thank you

STEPHEN SMITH:Thank you very much Mr Yang. We're a bit short for time, so I think the arrangement is two questions either side. I'll take my first. David Crowe from The Financial Review.

QUESTION:Thank you, David Crowe from The Australian Financial Review. I have a question for Mr Yang and Mr Smith on Rio Tinto. The question is: does the Chinese Government support the Chinalco investment in Rio Tinto? And do you think that there will be more investments like this in Australia, in the future, by Chinese companies, to protect China's economic future and its resource security?

My question for Mr Smith is: last night you said it didn't matter really where the investment comes from, it's about the national interest. But Chinalco is 100 per cent owned by the Chinese Government, so surely that of itself raises different concerns, or additional concerns?

YANG JIECHI: Chinalco and Alcoa in the United States have decided on joint equity participation in Rio Tinto. This is a decision, independent decision, made by the two companies, one Chinese, one American. And they did it, I guess, for their companies’ own good and they think that to do this would help the development of their business. So I guess it's part of the two companies’ development strategy, and which conforms to international practice and to market rules, in terms of mining cooperation. We just respect the two companies’ decision.

China and Australia have much trade in energy and mineral resources. I think it's a mutually beneficial relationship and I expect it to grow, because it will help to translate the latent advantages of both economies, into real ones, thank you.

STEPHEN SMITH: Thanks Mr Yang.

The point I was making last night, which I'm happy to repeat today, is that when it comes to foreign capital investment, there are a couple of fundamental points. Firstly, Australia welcomes overseas capital investment; we welcome foreign capital investment in Australia.

Investment in Australia, from overseas, has been one of the things which has seen Australia become a well developed and prosperous society. That's one fundamental.

The second fundamental is that when it comes to foreign or overseas capital investment, we have a well understood legislative and public policy regime and that legislative and public policy regime is subject to the Foreign Investment Review arrangements. And the central, significant point of that public policy area, and that leads to a framework, is that when the foreign investment requirements are triggered, it's a matter for the Treasurer to determine whether that investment is in Australia's national interest, and as I understand it, it's not of course a matter of detailed formulae.

As I understand it, Chinalco has presented its position to the Foreign Investment Review Board. That may well see a triggering of the legislation, which requires the Treasurer to make a judgement as to whether the investment is in the national interest. And that's the criteria on which the matter will be resolved.

And ultimately, that decision – “is this investment in the national interest or not?” – is the guiding light when it comes to matters of this nature, irrespective of whether the source is from China, the United Kingdom or the United States, other areas of important foreign overseas capital investment, so far as Australia is concerned.

More generally – and that issue was touched upon in discussions – more generally, I think the more substantive point so far as relations between Australia and China are concerned is this, is that coming from Western Australia as I do, I understand only too well the importance of reliable energy supply to China. And one of the things which is of national interest to Australia is to continue to be able to deliver energy requirements to China in a reliable and secure fashion, whether it's coal, whether it's iron ore, whether it's liquefied natural gas. And so one of the important modern day attributes of the Australia–China relationship is Australia's capacity to deliver minerals and petroleum resources, exports to China, in a reliable way.

Mr Yang, in his opening remarks, also made the point that these days it's not just minerals and petroleum resources that we export to China. We're now looking very seriously at clean coal technology. We're looking very seriously at renewables. So these things are all important attributes of the relationship. But in very many respects I regard much more important to the Australia–China relationship, as Australia's capacity to be a long-term, reliable and secure supplier, rather than a particular issue about investment in respect of which the Treasurer may be called upon to make a national interest decision.

QUESTION: [Name Indistinct]. I'm the correspondent with National TV of China, China Central Television. I have one question for Mr Smith.

The Taiwan authorities have been pushing referendum on entrance for UN membership. What's your comment on that question?

STEPHEN SMITH:Well, Australia has had a One China Policy for over 35 years. It was part and parcel of Australia's early recognition of China as a nation and we adhere absolutely to the One China Policy. And we are very concerned to ensure that that action is not taken in Taiwan, or in the Taiwanese Strait, which would cause concern or potential for disharmony in the Strait itself.

And that's why I've told Foreign Minister Yang, that Australia regards very much as completely inappropriate the referendum which on Friday was approved for putting to an election in Taiwan. It's completely inappropriate, it is not a helpful contribution, and just as, for example, the United States, through Secretary of State Rice has made comments critical, public comments critical, just as the Prime Minister of the United Kingdom, Gordon Brown has made comments critical, then likewise the Australian Government is privately and publicly critical of that process. It does not lead to stability, nor harmony in North Asia, and we would be much better off if that referendum had not been proposed.

QUESTION: Mr Yang, this is Catherine McGrath, from Australia Network, which is the ABC's international satellite TV service. I'd like to ask you both a two-part question, if I could.

First of all, on the greenhouse gas issue Mr Yang, Mr Smith talked about the importance of both developed and developing countries making a contribution. Do you feel there's been enough understanding from developed nations, about China's position? Do you think there should be more consideration of per capita emissions from China, and what movement would you like to see from the west in general on this?

Secondly, on the issue of the relationship between China, Japan and Australia, could you just state for us the position you expressed today to the Minister, and if we could get Minister Smith's response too, please?

YANG JIECHI: Thank you. We think that the whole of mankind is confronted with the challenge caused by climate change, so it is important for us to work together to deal with this issue. We believe that the Bali Conference is a success, and is important to do the follow-up work well.

As regards to the current problems in climate change, in China's view, they are primarily caused by the high level of emissions by the developed countries over a long, long period of time, and a high per capita emission in the developed countries.

We believe that UNFCCC and the Kyoto Protocol should be followed, and they form the legal basis for continuing the international community's work on dealing with climate change. The principle of common but differentiating responsibility should be adhered to, so not only China, but many developing countries believe that the developed countries should continue to take the lead in cutting their greenhouse gas emissions, and that they should continue, and even do a better job, in terms of technology, capital equipment transfer to the developing countries.

China, as a developing country, will continue to do what it can for dealing with climate change. For instance, we have set the target of lowering the per unit GDP energy consumption in China by 20 per cent, between the year 2005 and 2010. During the same period, there will be a reduction of 10 per cent of the emission of major pollutants, and we will raise the reafforestation area in China by a large margin.

I think when one talks about climate change, in relation to what China is doing, indeed one has to look at several things. First, China is doing its utmost, and it will continue to do its utmost.

Second is that the per capita greenhouse gases emission in China, is only about one-third of that of the developed countries, and as the Chinese people – some of them are still living under the poverty line, need to improve their living conditions – there will be some measured increase in greenhouse gas emissions in China, but we will do our utmost for combating climate change.

Third is that China is a manufacturing country. China produces lots of goods, which are not only used in China, but all over the world. So this greenhouse gas emission in China, is not just for meeting the needs of the Chinese peoples' daily necessities, but meeting the needs of many people in the world, especially the low income people in the world.

And lastly, I would like to say that China would like to cooperate with many countries in the world, developed or developing ones, in terms of dealing with climate change, and the Minister and I have talked about how we can cooperate in terms of new energy, alternative energy, in terms of clean coal technology. So this is a very important subject, and we would like to do our utmost. While maintaining sustainable development in China, we will contribute even more to this worthwhile effort.

We did talk about the relations between China and Australia, China and Japan, Australia and Japan. We didn't go so much into the trilateral relationship, if it can be called that way. I'm glad to tell you that there has been visible improvement in the China-Japan relationship. I know that the former Prime Minister of Japan, Abe, visited China, and then our Prime Minister, Wen Jiabao, visited Japan.

Recently, Prime Minister Fukuda visited China, and both sides have agreed to further improve and develop their relationship. President Hu Jintao will make a state visit to Japan in Spring this year, and the two sides will try to expand their exchanges and cooperation in trades, science and technology, culture, and many other areas, especially among the young. So we hope that China-Japan relationship will continue along the track of stable and healthy development.

With regard to Australia-Japan relationship, we wish you all the best. We know that Japan is a very good trade partner, and dialogue partner of Australia, so we wish that you will further improve your relationship. Thank you.

STEPHEN SMITH:Thank you. On climate change, Australia strongly believes that the Kyoto Protocol and the Bali Conference provides the framework or the road map for future work on climate change. We very strongly believe that all developed, and developing nations, have to make their contribution, and play their part. That's why it's just as important for the United States and Australia, as it is for China and India, to be committed to emissions cuts, to see a long-term attack made on emissions and dangerous climate change, and global warming.

And as we've indicated to China, we stand ready to work cooperatively not just with China, but with other developed and developing nations in that ambition.

So far as Australia, Japan, US relations are concerned, as you know; I was in Japan last week on Friday and indicated to the Japanese Government that Australia proposes to continue the Australia, US, Japan dialogue. And there's a good reason for that.

We have an alliance with the United States. As I said privately and publicly in the United States, our alliance with the United States continues to form the fundamental bedrock of our defence, security and strategic arrangements. It is both enduring and indispensable.

With Japan, we have a long-standing economic, strategic and security partnership.

With China, we have an emerging relationship based for a long period of time on our early recognition of China as one nation, on the economic complimentarity between our two nations and today we see the relationship going to another level, a strategic dialogue.

And so we will continue at a trilateral level, that strategic dialogue [with Japan and the United States].

One of the things which caused China concern last year was a meeting of that strategic dialogue plus India, which China expressed some concern with. And I indicated when I was in Japan, that Australia would not be proposing to have a dialogue of that nature. When I first became foreign minister, I made the point that we have a good relationship with India, but we need to take that relationship as well to a higher level, but we're not proposing to have a dialogue along the lines as occurred last year. And I think the United States has indicated a similar disposition in recent weeks and I think that's been welcomed by all concerned.

Can I say, when I was both in the United States and in Japan, one of the things which encouraged me were comments in the United States from the administration about the positive and constructive relationship and dialogue that the United States has with China.

In Japan, the positive and constructive dialogue that Japan has with China and the success of Prime Minister Fukuda's visit to China. Positive and constructive relationships between China and the United States and China and Japan can only but benefit the globe, the region and Australia. And I've been very pleased in the course of our conversation this morning to have those United States and Japanese analyses confirmed by Foreign Minister Yang.

As a nation state, Australia has very important relationships with all of those countries I've mentioned, and they can all be positive individual relationships where they're win-win for all concerned, not just the win for Australia but a win for stability and development in the region and in the globe.

YANG JIECHI: May I add a few words? We did discuss the China and US relationship. In our strategic dialogue I introduced to the Foreign Minister the recent picture of the China-US relationship. We believe that last year China and the US relationship actually remained stable and the new progress has been made in some very important areas.

There is a lot of common interest between China and United States, both in terms of our bilateral relationship, for instance, trade and cooperation in other areas and in terms of the international scene for instance. The two sides have stayed in close touch with regard to hotspot issues in the world. And the two countries' leaders stay in close touch with each other either by direct meetings or by exchanges of visits or by correspondence or telephone conversation.

We think that it's important to maintain and expand the areas of commonality of interest between the two countries and properly handle the differences between the two countries, so as to make sure that the constructive and cooperative relationship between China and United States is continuing to develop to the benefits of the two peoples and world peace and stability and prosperity. Thank you.

QUESTION:[Indistinct] from The People's Daily. Please give some comments on the outlook of the Chinese Australian relations. These questions are for the two ministers. Thank you.

YANG JIECHI : Okay, thank you. Well, I believe that the prospect for the future growth of China Australia relationship is a very good one. There is long friendship between our two peoples and the comfort level is quite high.

And second is that our leaders have known each other for a long time. Our conclusion is that all the major parties in this country are for better China Australia relationship. And of course it was during Prime Minister Whitlam's time that we established diplomatic ties between our two countries. But the relationship, ever since, has made steady progress, because on both sides the leaders have shown vision. And thirdly, in this changing world, both sides see the need to further strengthen the relationship. It is for the benefit of our two peoples and it is for the benefit of the world. Together we can do a lot more than we can do individually.

Fourthly, the two economies are really, really cut out for each other. We can, you know, try to benefit from each other's strong points. Just now, we talked about, not only trade but investment. I must say that at the moment there is far more Australian investment in China then China has in this country, both in terms of manufacturing and the services.

We are very open-minded. We would like you to double and or triple your investment in China. We think it's good for you and it's good for us. So let's, you know, let's set our eyesight high and look into the future to see what we can do in the future together and in other areas as well.

So, the important thing is to have more people visiting with each other to understand each other better so that more Chinese will speak Australian English and more Australians will speak our Pu-tong-hua or any dialect you like. And there will be more Chinese students studying various subjects in your universities than more Australian kids will be studying in China, that's what I hope for. This will all go well for our relationship in the future. Thank you.

STEPHEN SMITH: The relationship is very strong and the prospects are even better. We have a very, very good economic relationship. We've taken that to a different level, a new level today with the first of our strategic dialogues. The prospects for even more engagement on the economic, on the trade, on the investment, on all fronts are very good. And they can only be enhanced by the people to people contact to which Mr Yang has referred, they can only be enhanced by the high-level ministerial contact which we propose to effect on a regular basis. The mutual trust and respect between our two nations is very strong and so we are very, very optimistic about the long-term prospects of taking our very good relationship to an even higher level.

Thanks very much.

YANG JIECHI: Thank you.

Ends

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