Address by The Hon Alexander Downer, MP, Minister for Foreign Affairs, to the 1997 Australia in Asia Series, Sydney, 10 September 1997.
I am delighted to be part of this forum, and I want to thank the
Institute for the opportunity to speak to you today.
The 1997 Australia in Asia Series - a new monthly forum - is one
of the Institute's most significant initiatives. It is an excellent
way of encouraging a broader and more intelligent discussion of
topical issues relating to Australia and its place in the Asia
Last month, the Government released Australia's first ever White
Paper on Foreign and Trade Policy. It is a declaration of commitment
to the Asia Pacific. It charts Australia's regional future for the
next fifteen years. I want to take this opportunity to thank my
co-panelist - Meredith Hellicar - for her contribution as a member of
the White Paper Advisory Panel.
The policy framework and analysis provided by the White Paper is very relevant to this forum's topic. To begin with, the White Paper makes two general points about China:
. First, it is important to take a long term view, and to be aware of history, when dealing with China.
. Second, as China's economic stature grows, so too will its impact on the security and politics of the region and the world.
This year is a landmark year in Australia's bilateral relationship
with China - it is 25 years since diplomatic relations were
established. The White Paper states that China will remain one of
Australia's key relationships. It is a relationship based on shared
interests and mutual respect. Our growing economic partnership is
founded on the complementarity of our two economies, but our
cooperation extends across a wide range of activities and fora.
Australia will remain committed to the one-China policy pursued by
Australian Governments since 1972. We will pursue within the
framework of the one-China policy the important and growing economic
and trade relationship we enjoy with Taiwan.
Drawing on the White Paper, I want to outline today the Australian
Government's perspective on China's growing influence and the
expanding bilateral relationship. But, first, I want to set the scene
by summarising briefly what the White Paper has to say about
Australia's overall approach to the Asia Pacific.
PART ONE: Australia's Enduring Commitment to the Asia
A fundamental message of the White Paper is that Australia is
committed to the Asia Pacific for the long haul, and that Australia's
highest foreign policy priority is to make a lasting contribution to
the region. It reflects the weight of Australian interests which are
engaged with the Asia Pacific: with the region's three major powers
and largest economies - the US, Japan and China - and with our
largest neighbour, Indonesia.
As a member of the Asia Pacific, and with one of the most East
Asian-oriented economies in the world, it makes perfect sense for
Australia to build on the foundations which complementary economies
and geographic proximity provide.
The White Paper underlines Australia's accelerating involvement in
the economic life of the Asia Pacific, and the enormous potential to
expand our ties across the region. It recognises that the sustaining
force behind the Asia Pacific's dynamism is economic
The White Paper identifies globalisation and the rise of East Asia
as the two most profound trends in the international environment to
which Australia's foreign and trade policies must adapt and respond
over the next fifteen years.
Globalisation offers huge opportunities for internationally
competitive economies, but also brings in its wake challenges for
political and economic management. The White Paper's judgement is
that economic growth in industrialising Asia will continue at
relatively high levels over the next fifteen years. The White Paper
also identifies several constraints which could prevent sustained
rates of growth at the unprecedented levels we have seen over the
past two decades. The World Bank forecasts growth for East Asia
(excluding Japan) over the next decade at 6.8 per cent, compared with
2.4 per cent for Western Europe and North America.
All of this means that the countries of East Asia will become even
more important to Australia as trade and investment partners, and in
security terms. It also has implications for Australia's relative
standing in the region, and significant consequences for the broader
relativities of power and influence in the Asia Pacific and
PART TWO : China's Growing Contribution to the Regional and
2.1 China's Economic Influence - A Positive Development
When considering China's growing influence over the past few
decades, it is natural to think first about China's spectacular
economic development. China's impressive economic performance has
been - and shows every sign of continuing to be - a positive
development for the region and the world.
This was made clear in a comprehensive report produced by my
Department's East Asia Analytical Unit earlier this year, entitled
"China Embraces the Market". China's leaders attach very high
priority to economic development and raising living standards in
The report anticipates that China's output, measured in
internationally comparable terms, will exceed that of the United
States by around 2020. Soon after the year 2000, it is expected that
China's trade with Japan will overtake United States-Japan trade -
which has been a pillar of Asia Pacific trade and the international
The White Paper makes clear that trade and investment liberalisation is very important for all countries in the region, including China. China needs to assure itself of open markets and a stable international trading system if its economy is to keep growing. China is dependent upon and will continue to generate huge demands for resources, capital and technology.
Trade and investment liberalisation - and greater integration into
regional and global economic affairs - is very much in China's
interests and the interests of Australia and other countries.
That is why Australia's approach to China's growing economic influence is a constructive and positive one. Australia is encouraging China's further integration into the regional and global economy, through bodies such as APEC and the WTO. Australia supports China's accession to the WTO on appropriate terms because it will help bring China into a rules-based regional and global trading environment. I am pleased to say that China is already making some meaningful reductions in its overall tariff rates in the APEC context.
2.2 Complementary Economies - The Foundation of the
The growing complementarity of our two economies lies at the heart
of the economic relationship. These important complementarities will
underpin a sustained expansion in the volume and scope of trade and
Vice Premier Zhu Rongji, in his address to the Australia China
Business Council in Sydney in May, spoke about this complementarity
when he referred to the "huge potential for cooperation" between
Australia and China. And Prime Minister Howard - during his China
visit in late March - spoke with equal enthusiasm of a new economic
"strategic partnership" between Australia and China.
Australia's reliability as a supplier of commodities to China
dates back many years. We have been supplying wheat to the Chinese
market since the 1960s, and we are well positioned to underwrite
China's future growth, just as we did for Japan and Korea at an
earlier stage in their development.
But there is much more at stake for both countries than increased
commodity exports or imports. New opportunities for mutual profit are
opening up across the board. China's sustained economic growth - and
the increasing openness of the Chinese economy - offer excellent
opportunities for Australian businesses and enterprises. China will
not only continue to have a strong demand for agricultural
commodities, but also for industrial materials and elaborately
At the bilateral level, the Australia-China economic relationship
is going from strength to strength. Australia's trade with China has
been growing twice as rapidly as our overall trade. Australian firms
have established a significant and growing presence in Beijing,
Shanghai and Guangzhou, and in other parts of China. Australia is
already one of China's most important destinations for overseas
investment, but there is great potential for Chinese investment in
Australia to grow even further. In turn, China knows that in a wide
range of areas, Australian investment can bring technology and
services to China as advanced and effective as that of any nation in
The Australian Government's `focus sectors' for market development
activity in China reflect this new diversity and depth of opportunity
- agribusiness, processed food and beverages, building materials and
construction services and environment protection services - to name
just a few of the sectors. My colleague Tim Fischer has just
completed a visit to China where he had discussions with Premier Li
Peng and other senior Chinese leaders and opened the Australia-China
Business Forum - a forum designed to showcase many of the Australian
companies involved in these `cutting edge' sectors.
I am pleased to say that the closer economic relationship is
already beginning to bear fruit. For example, on services - the
issuing of a Beijing branch licence to ANZ; permission for AMP to
open a representative office in Beijing; and the issuing of a
Shanghai licence for the law firm - Blake, Dawson and Waldron. From
the Chinese perspective, there has been confirmed Chinese interest in
investing in the Australian iron and steel sector, particularly in
`directly reduced iron '.
2.3 Hong Kong - New Opportunities for Australian
I also believe that the return of Hong Kong to Chinese sovereignty
on 1 July has enhanced China's global economic position. Hong Kong's
strategic position as an international financial centre is difficult
to overestimate. On his visit last month to Australia, Hong Kong
Financial Secretary Donald Tsang conveyed a welcome message of
`business as usual' in Hong Kong - a message we are also receiving
from Australian business.
China's resumption of sovereignty over Hong Kong offers exciting
opportunities for Australian business in China as economic links
between Hong Kong and the rest of China deepen. Already, some 22
percent of Australia's exports to Hong Kong are re-exported to other
parts of China, and over 80 percent of Hong Kong's economy is based
on services, where Australia is already well represented.
That is why the Australian Government is determined to diversify
and expand all aspects of the burgeoning economic relationship with
China, in tandem with the private sector.
PART THREE : Political and Security Cooperation
3.1 China's Important Contribution to Regional and Global
For China, as for Australia, a stable and peaceful regional and
international environment provides the necessary climate for
continued growth in trade and economic activity generally.
The White Paper's analysis of regional trade and investment
patterns - and their wide-ranging implications for jobs in Australia
- is matched by its hard-headed appraisal of the new regional
security environment. This appraisal shows that Australia has an
historic opportunity to help lock in the peace which is underwriting
the region's extraordinary economic growth.
The White Paper's judgement is that the United States will
continue to see its best interests being served by maintaining its
strategic engagement in East Asia, where it has vital security and
The White Paper also notes that China's economic growth, with
attendant confidence and enhanced influence, will be the most
important strategic development of the next fifteen years. How China
manages its economic growth and pursues its international objectives,
and how other nations, particularly the United States and Japan,
respond to China will be crucial issues over that period.
The growth in economic and political influence of others in East
Asia, notably the Republic of Korea and Indonesia, is also likely to
affect the dynamics of regional security.
In that context, I notice that - from time to time - Chinese
journals criticise the United States presence in the Asia Pacific.
This view appears to stem from a misconstruction of the objectives of
that presence. Furthermore, it is a fact that other countries in
North and South East Asia - for example, Japan, the ROK, Singapore
and Thailand - share Australia's perspective on the importance of the
United States presence in the region.
Historically, whenever a country of China's potential emerges into
great power status, a period of adjustment follows - both on the part
of the emerging power and on that of other countries, particularly
those in the same region. In the latter half of the 19th century -
before nationalism and irredentism helped drive the European imperial
system into conflict in World War I - European states adjusted with
some success to the emergence of a united Germany. The hallmark of
that success was the ability of Germany and its European neighbours
to display moderation and flexibility, and to understand each other's
interests and sensitivities.
That is why successful engagement is a genuinely two-way process.
It must be anchored in the constructive pursuit of common interests
and a strong commitment to enhanced cooperation. For example, just as
Australia - through its one-China policy - continues to appreciate
and understand China's sensitivities on Taiwan, it is important China
understands that many Australian jobs and family incomes depend on
our important economic and trade relationship with Taiwan.
I am convinced that as a growing China adjusts more and more to
the region in which it lives, and the Asia Pacific engages China more
extensively in the region's affairs, bilateral and regional
relationships based on shared interests and mutual respect will
remain the only sure foundation of sustained prosperity and
3.2 Engaging China in Regional and Global Security Affairs
Consistent with these principles and our constructive approach to
China's increasing economic influence, Australia is working actively
to engage China more fully in regional and global security matters.
China is already part of the growing web of relationships between
countries at the bilateral and regional level, including better
regional security dialogues and exchanges.
Australia has made recent progress in expanding its bilateral
security dialogues in the region. I announced in Kuala Lumpur in July
that Australia is establishing security dialogues with four of our
major regional partners. This includes a regional security dialogue
which will be added to the regular Disarmament Talks with China. And,
during the Prime Minister's visit to China earlier this year,
agreement was reached on initiating a regular dialogue between our
defence agencies. The first round of these talks was held in
At the regional level, Australia and China agree on the importance of the ASEAN Regional Forum. The ARF is moving ahead well. Australia and China were pleased with the constructive dialogue and cooperation at the recent ARF ministerial meeting in Kuala Lumpur. Both countries, along with our ARF partners, agreed that the ARF should demonstrate its strong support for the ASEAN initiative to help restore political stability in Cambodia.
Earlier this year, Beijing successfully co-hosted the first
official multilateral security meeting ever held in China - the ARF
inter-sessional group on confidence-building measures. Australia and
Brunei now take over from China and the Philippines as co-chairs of
this important core ARF activity. We look forward to working closely
with China in this group over the coming year.
In short, China's enhanced involvement in regional fora such as
the ARF and APEC helps build trust and confidence which are essential
building blocks for the promotion of regional stability and security.
China has an interest in the countries of the region being confident
about future stability.
At the global level too - China's interests - and Australia's
interests - are served by bringing China more fully into the
international security system. In that respect, I believe that
China's support last year for Australia's initiative in saving the
Comprehensive Test Ban Treaty was a positive sign.
3.3 An Effective Framework for Managing Differences
As the White Paper makes clear, Australia supports a mature and
broadly-based relationship with China. We want to expand cooperation
where we have interests in common.
As two countries with different traditions, cultures and political
systems, there will be some issues on which Australia and China do
not share the same view. These issues are best addressed through
dialogue and good communication. Let me make it clear - I do not
believe that it is productive to lecture or hector other countries
about human rights.
This Government took the decision not to co-sponsor the annual
resolution on China at this year's session of the UN Commission on
Human Rights because we judged that it was not a constructive way of
promoting human rights in China. For seven years, this resolution has
been put forward, but never once adopted - not once.
Empty sloganeering - and the easy headline that often follows it -
is no substitute for doing the hard work of advancing Australia's
interests and concerns in an effective and forthright fashion. Our
aim is to work together with other countries to achieve practical
outcomes which actually improve the lives of individuals.
That is why Australia's human rights dialogue with China - first
raised by the Prime Minister and then agreed between Justice Minister
Xiao Yang and me in April - is a substantial and very welcome
development in the bilateral relationship. It is a mechanism through
which we can raise a full range of issues of concern to Australia in
a constructive manner.
The inaugural human rights talks were held in Beijing a couple of
weeks ago, and went very well, reflecting the clear commitment of
both sides to move the relationship forward in practical and
Australia and China agreed to initiate a program of technical
cooperation aimed at addressing China's needs in the promotion and
protection of human rights. $300,000 has been set aside in this
year's aid budget for this purpose. The dialogue will continue on a
regular basis - we look forward to the next round in 1998.
I am also pleased to say that we have instituted regular bilateral
consular talks with China, and are looking at the possibility of
formalising a bilateral consular agreement.
PART FOUR: Expanded People-to-People Links
Of course, Australia values China's contribution not just as a
partner in the economic, security and political realm, but because
China has much to offer Australia and the region through extensive
people-to-people ties, including educational and cultural exchanges.
This is a key aspect of engaging China more comprehensively in the
diverse and exciting life of the region.
Since 1994, we have seen double-digit growth in the number of
Chinese students arriving in Australia. There are nearly 3,000
students from China taking full-time courses in Australia. This trend
has been complemented by the growing links between educational
institutions in Australia and China. Opportunities for travel, trade
and educational exchanges have been assisted greatly by the new and
expanded air service arrangements which were signed in March 1996
I know that the Asia Australia Institute - through activities such
as the Gwinganna Forum - is doing a great deal to deepen mutual
understanding between Australia and China, and the rest of the Asia
Pacific. The Institute appreciates better than most that these
people-to-people links bring the region together in a unique and
lasting way, flowing as they do across national borders and down
through the generations. They also help demonstrate the world-class
quality of Australia's scholarship and our expertise in the provision
of education services to the Asia Pacific across a broad range of
Australia has a very large community of people of Chinese descent
of which it is very proud. The Chinese community has made a
tremendous contribution to Australia's economic, political and
cultural life, and such links have created a deep reservoir of
goodwill in the relationship. It is one of the most valuable assets
which Australia brings to its regional and global engagement.
It also goes to the heart of the White Paper's absolute rejection
of racial discrimination. This repudiation of racial discrimination
is not just a moral issue. It is fundamental to Australia's
acceptance by, and engagement with, the region where its vital
security and economic interests lie.
It is clear from everything I have said today that China is already deeply engaged with the world, and that engagement is accelerating.
I am convinced that the rapid development of trading and
investment links between China and Australia - and other countries in
the Asia Pacific region - has already helped create a stronger sense
of community and goodwill among regional countries that extends well
beyond the economic sphere.
Set against this background, the argument about whether the world
should seek to contain or engage China is irrelevant.
The White Paper underlines the fact that, as China becomes more
fully involved in the economic and political affairs of the Asia
Pacific, it can become an even greater force for prosperity and
stability in our region. As Prime Minister John Howard said last
year, such a development would be "a proper expression of the huge
potential of the region's most populous nation."
Looking to the future, I assure you that the bilateral
relationship with China will remain a key one for Australia. More
than that, our landmark White Paper on Foreign and Trade Policy makes
it clear that the relationship will continue to be based on the key
principles of shared interests and mutual respect.