Sky News, Beijing - interview with Kieran Gilbert

KIERAN GILBERT The last time China hosted APEC was 2001. Since then it has overtaken France, Germany, Great Britain in terms of their economy, Japan as well, it's the second largest. It's a very different China today isn't it?

JULIE BISHOP It certainly is and Australia's relationship with China has also transformed. China is now our largest two-way trading partner with two-way trade valued at about $150 billion. So our relationship has been transformed as China's relationship with the world has been over the last few years since they hosted APEC in 2001.

KIERAN GILBERT It's not been without its difficulties though, as we know with your meeting with your Chinese counterpart last December. This time it seems like a warmer reception, is that a fair [inaudible]?

JULIE BISHOP I have met Minister Wang Yi on numerous occasions since last December in fact we were working out, I think this is my eighth bilateral meeting with him. So I have seen him on many occasions and we've discussed many things, in fact we've developed quite a rapport. Today I also met with State Councillor Yang Jiechi and he remarked to me that he thought Foreign Minister Wang Yi and I had developed a personal friendship. So I was pleased to hear that the Chinese leadership see my relationship with Foreign Minister Wang Yi in that light. We do get on really well but we also have very frank exchanges, as last December indicated.

KIERAN GILBERT I want to go through a few issues and a few topics, one is climate change, and I guess that is one of the bigger ones. It's one of few areas where the US and China do see eye-to-eye pretty clearly. They have a working group on climate change, and the US is also working with India for that matter on these issues. Is Australia dropping the ball when it comes to working with the big emitters?

JULIE BISHOP No, not at all, in fact on Monday I will have an entire day with the Vice Chairman in charge of climate change matters here in China and this is part of a climate change dialogue that has been in place between Australia and China since 2004. Former Foreign Minister Alexander Downer set up this bilateral climate change discussion with China and I will be attending that on Monday. It's an opportunity for us to talk with China - which is now the second largest emitter of global greenhouse gas emissions, in line with it being the second largest economy - to talk to them about what we can do to assist China.

We're very good at measuring emissions and providing advice in that regard, and so I'm looking forward to discussions on Monday with China about the issue of climate change. Our commitment to our 5 per cent reduction by 2020 on 2000 levels is a significant contribution and I'll also be discussing our $2.5 billion emissions reduction fund with China and gain some insight into what they are actually doing.

KIERAN GILBERT There is a sense that China and the US might get ahead of the program, I guess, in terms of the UN talks on climate change next year, it's a big year when everybody sets their post-2020 targets. Given China and the US have a common purpose on this key issue, if they do set ambitious goals post-2020, does that then put pressure on the rest of the international community, and I guess, specifically, countries like Australia and Canada?

JULIE BISHOP Well I think that the United States and China, being the largest emitters, do have a role to play in setting out what they propose to do because it has to be a global response and the largest emitters of course make the biggest difference. Australia is responsible for about 1.5 per cent of total greenhouse gas emissions on a global scale, so we are dwarfed by whatever China and the United States and other emitters do. So I think it's quite appropriate that the US and China do work out what they propose to do and share that information with other countries so that we can respond. Australia is reviewing our post-2020 targets in 2015 and it's important for us to know what China, the United States and others will be doing.

KIERAN GILBERT There's talk that the Green Climate Fund should be something that's a focus of this APEC Summit. There have been big contributions to it from Germany, from France as well. Do you think that it's something that the leaders should discuss here to help developing countries?

JULIE BISHOP I think there are other forums where it's more appropriately discussed. I'm sure climate change will come up in some form or another in the leaders' meeting. But we have a number of significant forums that are dedicated to climate change and I think that would be a more appropriate forum.

KIERAN GILBERT Let's move on. I want to ask you about the China infrastructure and investment bank and there were suggestions this was a decision made by the National Security Committee based on strategic reasons and that you were a big part of that decision not to back this China bank. Was it done for strategic regions? Is this more than just an infrastructure bank we're talking about?

JULIE BISHOP Well I don't reveal the details of discussions that occur at our National Security Committee meeting, not even to you Kieran, so I won't go into that. We did make a decision not to sign up to the bank at this time and it's only a Memorandum of Understanding. The bank itself won't be implemented for quite some time, so there's plenty of time for us to continue to talk with China about what we see as fundamental principles that would be required for a multilateral institution of this type.

I think China understands our position and I've had very positive discussions with both Foreign Minister Wang Yi and also State Councillor Yang today about the bank.

KIERAN GILBERT So you want to be a part of it?

JULIE BISHOP We're interested, very interested, in what China is seeking to do and we acknowledge that it's an important initiative to get more infrastructure funding, particularly into developing countries in our region. This is not about an infrastructure fund for Australia. This is an infrastructure fund to assist developing countries, so we're not going to miss out on infrastructure funding for Australia. But we want to make sure that a new multilateral institution has in place the fundamental principles that we think would be appropriate, so we are continuing to discuss this with China, as are a number of other countries.

KIERAN GILBERT Is it though, the start of a new economic architecture, as opposed to just a bank? Is it a China-led architecture, as opposed to the US-led system we've had for many decades?

JULIE BISHOP Clearly it is China-led, it is China's initiative and at this point China would be the majority shareholder, holding something like 50 per cent of the shareholding which is significant compared with other multilateral institutions where any one country wouldn't have probably more than 20 per cent of the shareholding. So it is a different model and we are looking at it very closely and, as I said, continuing to discuss and negotiate but we've had a very positive discussion with China about it. I hope it does become inclusive and can include other countries including Japan, South Korea and the United States, New Zealand, Australia, others but at this stage it hasn't met what we would require as our fundamental set of principles.

KIERAN GILBERT Okay. In terms of the President's focus, Xi Jinping has focussed a lot on cracking down on corruption. There has been a fair bit made of this as to, well, is it beyond just the issue of graft? Is it also him targeting his political opponents? Is Australia comfortable cooperating with a response like that when it is in that context?

JULIE BISHOP Well we certainly welcome President Xi Jinping's focus on stamping out corruption. He's been very frank about it, very blunt and they have targeted a number of people. Australia doesn't have an extradition treaty with China so there's some talk that if people were to come to Australia then we wouldn't hand them back to China but we don't have an extradition treaty. We do have in place very strong anti-corruption, anti-money laundering laws and regimes so we can work quite comfortably with China.

But I think we should welcome President Xi Jinping's focus on it and even at the APEC Summit yesterday there was a considerable discussion about anti-corruption measures and it was embraced by all of the member economies there. China has introduced a Beijing Declaration on anti-corruption measures and it does tackle the issue head on. So I wouldn't put it in a political context, I'll leave that for other commentators to do.

KIERAN GILBERT What about the Federal Police cooperating with Chinese authorities? Is that all appropriate given some of the underlying issues here?

JULIE BISHOP I think it's appropriate that our Federal Police cooperate on a range of levels with other countries and that includes China. We cooperate with China on cyber-security, on counterterrorism, on transnational crime. I think it's quite appropriate. I understand where you're coming from, the suggestions that have been made, but I'm taking it for the benefit that I see for Australia and we are working very closely with China on these very sensitive and difficult areas.

KIERAN GILBERT Well they've got a few sensitive areas, another one is Hong Kong. The student protesters have been there now for a number of months. How do you think Chinese authorities, the central authorities in Beijing have handled this?

JULIE BISHOP It really is a matter for the Hong Kong Government, the SAR Government, and constitutional reform is a matter for the people of Hong Kong. In Australia I know that we had dismantled the Occupy Movement from Brisbane and other capital cities in a relatively short time. I think it's interesting that it's still going on in Hong Kong. Australia encourages the peaceful resolution of these difficult issues but constitutional reform and all the ramifications are really a matter for the people of Hong Kong and I just hope that they can resolve it peacefully.

KIERAN GILBERT Well student protests have a poignant recent history don't they in this country and I guess the question is do you think the leadership has handled this sensitively and appropriately?

JULIE BISHOP I think China is very aware of Hong Kong's position in the international markets, it's an international city, it is home to many expats and I think China can see the benefits of Hong Kong remaining within the one system, I mean they have this one-country, two-systems, but the system in Hong Kong has worked very well for China and indeed for the rest of the world.

KIERAN GILBERT To the other tensions in the region and there's a lot of talk as to whether Shinzo Abe is going to have a meeting with President Xi during the APEC Summit. I guess the question to you is - given all of the sensitivities, the potential flash points in the East China Sea and the South China Sea, is there a risk that one miscalculation in this region and there could be some conflict?

JULIE BISHOP That has always been our concern, that any escalation of tensions of any unilateral action could risk a miscalculation and that's why we've always urged calm. We don't take sides on these maritime disputes and we certainly don't take sides in the Senkaku/Diaoyu Islands dispute or the South China Seas. But we do encourage dialogue, we encourage engagement, and in the South China Sea I've been present at a number of meetings with China and the ASEAN countries - or some of the countries that are in dispute with China over maritime boundaries have had some pretty blunt discussions. But we encourage dialogue, we believe that the code of conduct proposal that the ASEAN countries put forward has great merit and at this meeting I must say it really hasn't been a dominant feature. The issue of the East China or South China Seas has not been dominant. This of course is an economic forum. We're focussing mainly on trade and investment issues and there's much discussion of course about the Free Trade Agreement of course with Australia and China, indeed yesterday the Japanese Free Trade Agreement with Australia passed through the Japanese Parliament. So there's a lot of progress being made in free trade agreements from Australia's perspective and that's really been the focus of our efforts here. Minister Andrew Robb and I are both here, Prime Minister Abbott is also arriving, and our focus is very much on trade - trade liberalisation, trade facilitation - and the benefits for Australia.

KIERAN GILBERT I want to ask you one on that shortly, but just in terms of the, you say that we don't take sides, but there's a sense Madame Fu Ying, a former ambassador to Australia, she wrote recently that she feels, and the Chinese feel, that the US always take sides and always against the Chinese position. Is this something that the US needs to look at with the new prism, I guess?

JULIE BISHOP The United States also says it doesn't take sides. I've been present when Secretary John Kerry has made that statement to the Chinese leadership - that the United States does not take sides - but they do not support any coercive or unilateral action and they condemn any attempt at coercing the other side. They did take a stand on China's introduction of an Air Defence Identification Zone, as did Australia. We saw that as a unilateral action that was going to create tensions and escalate matters rather than defuse matters. But I think the United States should be free to say it doesn't take sides and people should take that at face value.

KIERAN GILBERT A couple of quick questions, first, the Free Trade Agreement looks like it's done.

JULIE BISHOP Well it's still under negotiation, and that's what Andrew Robb is doing here, but we're feeling more confident. I think Andrew has done an extraordinary job. Not only is he working hard on the Free Trade Agreement with China, he's concluded free trade agreements with South Korea and Japan and that is a remarkable outcome given that in the previous 6 – 7 years very little progress was made.

These were all free trade agreement negotiations that commenced under the Howard Government and virtually went nowhere under the previous Labor Government. I'm not making a political point I'm making a statement of fact. Now in just over 12 months we look like concluding three free trade agreements with our major trading partners. That's an outstanding result and of great benefit to Australia. It creates jobs, it drives economic growth, it gives important benefits to exporters and creates opportunities for new businesses to export into these massive markets in North Asia.

KIERAN GILBERT And finally, without being too positive, you've also received a few positive reviews on your first year in the job and the recent poll had you equal with the Prime Minister as the preferred Liberal leader, that's quite a jump. How do you react to that?

JULIE BISHOP I'm just part of the team. We have a leader who is doing an outstanding job as Prime Minister and I'm privileged to be in the role of Foreign Minister representing the country on the world stage. It's an honour that I am conscious of every single day, but I'm very much part of our team and looking forward to remaining so for some time to come.

KIERAN GILBERT No leadership baton as Peter Costello called it?

JULIE BISHOP I think it was Peter Reith wasn't it?

KIERAN GILBERT Peter Reith, okay.

JULIE BISHOP As I've said on many occasions this is my dream job and I feel so privileged to be Australia's Foreign Minister so I can assure you that this is the job I came into politics for.

KIERAN GILBERT Minister thanks for your time.

JULIE BISHOP My pleasure.