27 March 2009
Press Conference, Beijing
Subjects: Australia-China Strategic Dialogue, Chinese investment in the Australian resources sector, Sudan.
MINISTER: I've just come from a bilateral meeting and Strategic Dialogue with Chinese Foreign Minister Yang. This has been the second Strategic Dialogue that Australia and China have conducted. The first was in Canberra last year at about the same time. I've also spent the last couple of days in Chengdu and Chongqing. I wanted to do that to make the point that Australia very much understands that China is more than Beijing, Shanghai and Guangzhou - places that I have previously visited, before I became the Foreign Minister.
There are very important opportunities that Australian business and industry can have with the west of China. I have to say that I was deeply impressed with Chongqing as a city and as an opportunity for enhancing the economic and people to people exchanges between Australia and China.
The fact that Foreign Minister Yang and I today did the second Strategic Dialogue, very much reflects the comprehensive nature of the relationship and the partnership now between Australia and China.
Our relationship started in the modern day with Australia's early recognition of China in 1972; the adoption of a One China policy by Australia. Since then, the economic relationship has been driven by minerals resources from my own state of Western Australia, but more
recently, our economic relationship has grown to cover all aspects of our respective economies.
One of the important things that Foreign Minister Yang and I spoke about was desire on the part of both Australia and China to enter into a Free Trade Agreement. We see this as being in Australia's economic interest and in China's economic interest. Negotiations are always lengthy and torturous, but there is a strong view that having a Free Trade Agreement between Australia and China would be in our economies' interests. I made the point when I was in Chongqing that a Free Trade Agreement would certainly in my view be of benefit to the west of China: to Chongqing and Chengdu.
We also discussed the importance of investment. Australia has suggested that as part of the negotiations that there be an investment chapter of the Free Trade Agreement. Australia is a country which has prospered from overseas capital investment and by being a great trading nation.
Our Strategic Dialogue also underpinned the close way now in which Australia and China work together in both regional and multilateral forums. We spoke about our shared experiences and how we work together in ASEAN-related forums, in APEC, in the East Asia Summit. And we also spoke about how we work closely in the G20 in the face of the current economic crisis, which of course we spoke about in the course of our discussions
We also work closely in the United Nations. So that also reflects and underpins the comprehensive nature of the relationship that Australia and China now have.
We spoke about very many of the issues which challenge the international community: Afghanistan; Pakistan; the Korean Peninsula; and the way in which China and Australia can work together within regional and multilateral forums to advance the international community's interests in these difficult situations.
Following my discussion with you, I have a meeting with Vice President Xi and a meeting with Standing Committee member Zhou. I don't know what the time is, but I'm advised that I have to get out of here at about twenty past.
So I'll put you on notice not to hold all your difficult questions until twenty past two. I'm happy to do my best to respond to your questions.
JOURNALIST: Minister, did you know about the Government's effective knockback of the OzMinerals/Minmetals deal before you started your meeting today and does that knockback on security grounds excluding the Prominent Hill part of the company mean that the government sees Minmetals as an arm of the Chinese Government?
MINISTER: Firstly you need to read the Treasurer's press release which was released in the course of the afternoon.
What the Treasurer has made clear is that he has made an interim order with respect to the OzMetals/Minmetals matter. It is quite clear that he is talking about the exclusion of Prominent Hill and when you read his statement, Prominent Hill of course is within the Woomera prohibited zone.
Any mining application from whomsoever it comes or any mining development application from whomsoever it comes which is within the Woomera prohibited area is subject to special consideration by the Defence department. The Treasurer has made it clear that that is the basis on which he has made that interim order.
We discussed generally, Foreign Minister Yang and I, the question of investment and the importance of investment in Australia. We didn't discuss, as I indicated in advance to the Australian media, any particular individual applications. I certainly, as I have in the past, outlined the policy approach that the Australian Government has: that we encourage overseas foreign investment, capital investment in Australia. That is one of the things that has helped make Australian economy strong.
But from time to time, in difficult and complex cases, the Treasurer makes a decision in the national interest; that these approaches of principle and the law are well known to the international investment community. The Treasurer, in the course of the day has made one of the decision that, from time to time, he makes.
JOURNALIST: Could you explain to us and also to the Chinese journalists: what is it about the Woomera site that is a security risk and would the same principals apply to any other company from any other country or an Australian company?
MINISTER: What I said in my earlier answer: any mining application or mining development application which falls within the Woomera prohibited area is specially assessed by the Defence department. And my advice to you and to all journalists is to very carefully read the statement issued by the Treasurer which outlines the reasons why he has made his decision.
JOURNALIST: The Attorney General issued a statement today saying that ASIO has no adverse information at all on Helen Liu. Could you tell us whether or not ASIS has that type of information?
MINISTER: I'm not going to discuss intelligence matters in public - that matter or any other matter. That's the longstanding practice of Australian governments of all political persuasions. I'll simply say what I've said previously in respect of that matter.
The Secretary of the Defence department has initiated an investigation and people should await the results of that investigation. I have also of course noted overnight the Defence Minister's apology for his oversight in not properly complying with the parliamentary requirement so far as disclosure of sponsored travel is concerned.
JOURNALIST: The Attorney General has issued such a statement [inaudible].
MINISTER: I don't talk about intelligence matters in public.
JOURNALIST: The Central Bank Governor, Zhou Xiaochuan, has made a proposal this week. He said he wanted to create a reserve currency that is disconnected from individual nations and which is able to stabilise the world economy. So, do you agree with his proposal and why?
MINISTER: I was asked about this question earlier in the week and I hadn't seen his proposal. I've now had the opportunity of having a brief look at his proposal. In the meantime of course, the Australian Prime Minister has made it clear that we continue to support the US dollar as the reserve currency.
The matter that you have referred to, we're not aware is before the G20 meeting coming up in London. If of course, China presents that proposal to the G20 meeting, we will give it respectful consideration. But we continue to believe that the reserve currency should be the US dollar.
JOURNALIST: It is said that another round of talks on the Free Trade Agreement will be held at the end of this month in Beijing. So, does it mean that your trip to Beijing is kind of like a preparation for this FTA talks? What is your expectation for this round of talks? Another question is how are Australia and China join efforts against the global financial
MINISTER: Whenever I meet with Foreign Minister Yang, we talk about trade matters. We talk about the importance of the world not retreating to protectionism; the importance of successfully concluding a Doha round; the importance of striking bilateral and regional Free Trade Agreements. Today, for example, we spoke about the Australia-New Zealand-ASEAN Free Trade Agreement; the initiative we saw at the last APEC meeting of the P4 group of countries expanding to a Pacific area Free Trade Agreement including countries like Australia, the United States and Vietnam, in addition to the P4, which is: Singapore; New Zealand; Chile; and Brunei. We spoke in general terms about the economic importance of a Free Trade Agreement between Australia and China.
My colleague, the Minister for Trade, Mr Crean, is in Beijing next week. He will be meeting with the Agriculture Minister. Agriculture is of course one of the areas of great importance to China, as services are. We're hoping the conversations between Mr Crean and the Agriculture Minister will be productive.
Foreign Minister Yang and I understand that Free Trade Agreement negotiations are always complex, always difficult and often torturous. But we have a shared aspiration to effect a Free Trade Agreement because we see that in our respective economic and national interests.
On the G20, we spoke about the global financial crisis and the adverse impact that is having on global demand. In passing, I also mentioned my impression, which was that Chongqing and Chengdu do not seem to have been adversely affected by the global financial crisis because their economies are more domestically, rather than externally, orientated.
Australia's view about the G20: we spoke about the importance of the G20 being the relevant international institution to address these issues; the fact that the G20 has countries from our region in it: Australia; China; Japan; the Republic of Korea; Indonesia is very important for our region: the Asia Pacific. We spoke about stimulus packages, which both Australia
and China have effected and the importance of an international response to the global financial crisis.
JOURNALIST: Does the Australian government take any comfort in China's recent decision to reject Coca-cola's bid for a domestic juice maker, meaning in a sense it is OK to be concerned about strategic companies falling into foreign hands; it is OK for a government to reject this kind of proposal?
MINISTER: I've seen a report of that but I haven't studied it closely or been briefed on that matter by Chinese or Australian officials. My response is this: any country, all countries will make judgements about foreign investments in a way in which they think reflects their national interests. I speak about our foreign investment decisions: we have a well known well established process and procedure. From time to time in difficult and complex cases, the Treasurer of the day makes a judgmentagainst published principles, but with the ultimate test being: "is this in Australia's national interest or not?" and today he has made one of those
JOURNALIST: I'd just wanted to go back to Prominent Hill and the Woomera prohibited area. Does the Defence department decision mean that no foreigner can mine in that area and why not? What is in the Woomera prohibited area?
MINISTER: Firstly, it is not the Defence department's decision. It is the Treasurer's decision. That's the first point. Secondly, the Treasurer has made very clear in his public statemen, and as a matter of law, it is his decision not mine, that within the Woomera prohibited area, any mining application or any application for development has to be especially considered by the Defence department for national security reasons. He has made it clear that he has taken that into account and that's the reason, as indicated in his statement, that he has issued an interim order, which effectively takes Prominent Hill, which is within the Woomera prohibited area, out of contention, enabling the application to proceed in a different format if the parties so choose.
JOURNALIST: I have two questions: the first is we know aluminium corporation of China is negotiating with Rio Tinto and we have got agreement by ACCC but we don't know the decision FIRB. What is your opinion? The second is: could you tell us some details about the trade and economic relationship when you talked with Mr Yang and how about the new
progress of Australia - China FTA negotiation.
MINISTER: On the first matter, the individual investment application by Chinalco in respect of Rio, again this is a matter which the Treasurer has made clear that he is considering against the national interest test. He has published an effective timetable for the consideration of that matter.
The ACCC decision went to the anti-competitive or competitive nature of the bid and the ACCC has determined there are no anti-competitive issues associated with that bid. The Treasurer is now going through his own process of determining whether the application is in the national interest and he will at some stage make a judgement about that matter, as he has done today in respect of the Prominent Hill matter.
Yes, we had extensive discussions about the importance of our economic relationship. We agreed that our economic relationship is now a very comprehensive one. Yes it started with the complementarity of Australia being a reliable, secure supplier of minerals and petroleum resources. But there is now much more that we are able to do. Education services: we
have 100,000 Chinese students in Australia; and now we find Australian Universities and educational institutions providing services in China. We want that to be expanded.
There is a lot of work we think that can be done. For example, on renewable energy technologies or clean coal technology. Agricultural products: just as we are a reliable long-term supplier of minerals resources, we believe we can be a reliable long-term, competitive supplier of safe and clean food. Again: complementary parts of our respective economies.
In the services area, we think there is a lot, particularly if we strike a Free Trade Agreement, that we can do to expand the services part of our respective economies.
So we spoke extensively about those matters in the context of the Free Trade Agreement negotiations and the investment matters I have referred to earlier.
JOURNALIST: Could you just briefly tell us about this afternoon's two meetings. What sort of things will you be discussing?
MINISTER: This was the subject of conversation between Foreign Minister Yang and I as well. One of the good things about the modern relationship between Australia and China is the high level contacts and the high level visits. So in the course of my visit here, I have seen Party Secretary Liu from Sichuan, Party Secretary Bo from Chongqing, met with Foreign Minister Yang and this afternoon I see Vice President Xi and Standing Committee
member Zhou, whom I hosted in Perth on his visit to Australia recently. Making these high level contacts is very important to the workings of our relationship.
There is one matter that I wanted to refer to, but that I omitted in my introductory remarks.
One of the issues we spoke about in the course of our discussions about the difficult areas of the world was the Sudan. I made the point to Foreign Minister Yang that Australia is very concerned about the expulsion of humanitarian workers and international aid organisations from Sudan.
We very much urge the Sudanese government to reverse that decision and not to expel humanitarian workers from the Sudan.
Foreign Minister Yang indicated that he had been approached directly by Secretary General Ban about this matter and was being positive and constructive in this difficult situation.
So, we very much urge the Sudanese government to reverse its decision to expel humanitarian workers and nongovernment organisations involved in humanitarian assistance in the Sudan.
I'm being told by my officials that I have to go. I'm very sorry that I have to leave somewhat abruptly. Thank you very much for your attendance and thank you for your questions.
Foreign Minister's office (02) 6277 7500