JULIE BISHOP: Thank you for joining us this evening. I am delighted to welcome Chinese Foreign Minister Wang Yi to Canberra so that we can co-chair the fourth Foreign and Strategic Dialogue between Australia and China.

The Foreign and Strategic Dialogue is an important forum for us to discuss the many bilateral, regional and global issues that affect our two countries.

Foreign Minister Wang and I confirmed that we are both committed to strengthening and deepening this already important relationship which is in fact already a Comprehensive Strategic Partnership.

At a time of economic transition and uncertainty around the world, Australia reassures China that we are a reliable partner and that we will continue to place a strong trade and economic relationship as one of our highest priorities.

Our economies are highly complementary and already there have been significant benefits for both countries under the China-Australia Free Trade Agreement which has just celebrated its first anniversary – on 20 December last year.

On 1 January this year, there was the third round of tariff cuts and the Minister and I have committed to ensuring that the Free Trade Agreement continues to grow and is moving to the next phase of its implementation.

We have spoken this afternoon of areas where we can diversify our relationship commensurate with Australia's aim to diversify our economy and spoke particularly of greater cooperation in innovation and in energy. We're looking at working together in embracing world's best practice and the newest technologies available in affordable, reliable, low emissions energy.

We talked about the need for greater infrastructure, both regionally and in our respective countries – China’s One Belt One Road initiative, Australia's Developing Northern Australia initiative – and we commit to the principles of transparency, private sector engagement and ensuring that infrastructure investment leads to strong development outcomes.

We noted that regular leaders engagement and high level meetings between our counterparts has led to growing maturity and strength to our relationship. And at a government-to-government level, the relationship could not be stronger.

We are focussed now on the people-to-people links and we believe that there are already very positive signs that people-to-people links are deepening as well.

It's important to note that over 1.4 million Chinese visitors come to Australia and the tourism links between our two countries are growing.

Indeed I was pleased to be able to inform the Foreign Minister that visa applications in Australia can be now done in Chinese online and I believe that we're one of the first countries to make that available for applications in Chinese online.

WANG YI: Good news.

JULIE BISHOP: It is good news.

About 157,000 Chinese students study in Australia and under our New Colombo Plan, China has become the most popular destination for Australian students seeking to live, study and undertake work placements in China.

Foreign Minister Wang and I have more to discuss over a working dinner this evening when we deal with a range of other issues of mutual interest but I'm pleased that the Foreign Minister was able to spend time with Prime Minister Turnbull to discuss upcoming new year visits and engagement between Australia and China which is in a very constructive and positive phase.

Foreign Minister, we warmly welcome you here and look forward to our further discussions this evening.

WANG YI: [Translated from Mandarin by interpreter] Dear friends from the press, good evening. Well I must say that I've had a lot of press conferences with a lot of foreign ministers but it is the first time that we have our podiums so close together…


It shows that we lovingly establish these very close working relationships between Minister Bishop and I but also we have a closeness, a close relationship between our two countries.

I fully agree with the positive assessment given by Minister Bishop while we just concluded China-Australia Foreign and Strategic Dialogue.

At a time when we face an international situation that is full of uncertainty, we agree to send a clear message that that it is important [indistinct] to an open world. It is important to steer economic globalisation toward greater inclusiveness, broader shared benefit and in a more sustainable way. We need to firmly uphold the international trading regime with the WTO at the core and we need to promote trade and investment, globalisation and facilitation and we need to take a stand, firm stand, against all forms of protectionism. To this end the two sides have agreed to step up strategic communication and coordination at the United Nations, G20, APEC and other multinational mechanisms.

We speak highly of the notable results that we have achieved in the implementation of the China-Australia FTA in the past year and we have agreed to transform and upgrade our economic relations and cooperation so that we can shift faster from mining underpinned prosperity to a more diversified and more sustainable pattern of cooperation so that we can open up this new phase of FTA-driven prosperity.
We intend to link China's Belt Road initiative with Australia's vision for developing Northern Australia and China's innovation-driven development strategy with Australia's National Innovation and Science Agenda and we will further expand cooperation in energy, resources, infrastructure, agriculture, animal husbandry and other areas so that innovation will play a greater role as a driver and a strong and fresh impetus to the practical cooperation between our two countries.

We agreed to take the 2017 China-Australia Year of Tourism as an opportunity to apply more reciprocal visa facilitation measures in order to promote people-to-people movement in both ways. In this area, I appreciate the announcements made by Madam Foreign Minister just now that the Chinese citizens can apply visa online in Mandarin. This will be of good news for Chinese travellers. It will make their travelling easier.

Last year 1.4 million visits were made by Chinese to Australia. And I still see greater potential to tap because 1.4 million is only 1 per cent of the total overseas visits made by Chinese people every year. We hope that going forward Australia will introduce more visitation measures to facilitate people-to-people exchange between our two countries. That will help increase mutual understanding and friendship between the Chinese and Australian people and consolidate the popular support for China-Australia Comprehensive Strategic Partnership.

China supports pursuing a New Colombo Plan with Australia and understands that Madam Foreign Minister personally puts a lot of energy into this initiative and we stand ready to work more closely with Australia in areas of education, culture, sports, youth and sub-national relations and write a new chapter of friendship between our two countries.

We speak highly of the good momentum in our judicial - judiciary and law enforcement cooperation. We agree to strengthen cooperation on anti-corruption, fugitives, the recovery of the illegal assets, anti-drug and anti-terrorism and we will work together to tackle transnational crimes.

China appreciates Australia's long standing commitment to the One China policy. The two sides agree to stick to the principle of mutual trust and with the benefit, respect each other's co-interest and major concerns so as to solidify the political foundation of our coalition.

Right now it is early autumn in the Southern Hemisphere. We look forward to working with Australia to make preparations for upcoming high level exchange between the two countries and to bring our Comprehensive Strategic Partnership to more fruition and to enable the two countries to make greater contribution to share the benefits and the common prosperity of the Asia-Pacific region. Thank you.      
MODERATOR: Thank you Foreign Minister Wang and Foreign Minister Bishop. We have time for two questions from each side please and the first question will be from CCTV.    

JOURNALIST: [Translated from Mandarin by interpreter] Well right now the international situation is full of uncertainties. The world economic recovery remains weak; protectionism and isolationism are on the rise. Some think that China needs to play a leadership role. Well, what do you think China- what do you think- what kind of role do you think China should play in international community under the current circumstances?

WANG YI: [Translated from Mandarin by interpreter] In today's world beset by all kinds of uncertainties all the parties are looking to China to play a role. I believe it shows the trust of the international community in China and its’ expectations on China. Last month President Xi Jinping attended the World Economic Forum in Davos and visited the UN office at Geneva where he delivered two important speeches. In his speeches he fully expanded on China's positions and put forward China's solutions which have been broadly endorsed and well received by the international community. But just now in my meeting with Prime Minister Turnbull, he also expressed Australia's support for the message conveyed by President Xi.

I want to state very clearly here that China has no intention to lead anyone, nor does it intend to replace anyone, because we always believe that world affairs should be decided by all countries together and international rules should be made by all countries together. That said, as a permanent number of the UN Security Council, China is willing to shoulder its due responsibility for maintaining international peace and security. As the second largest economy in the world, China is willing to provide a strong driving force for world economic growth. As the largest developing country, China is moving to work tirelessly for upholding the legitimate rise and interest of the developing countries. As a member of Asia, China is willing to make its contribution to stability and prosperity of its neighbours. Also as a major country with 5000 years of civilisation, China is willing to provide more positive energy to the progress of human society.

Well we remain sober-minded about all the voices asking China to play a leadership role. China's national strength is still limited and we need to concentrate our energy for our own developments, both present and in the period of time to come. The international responsibilities for China to shoulder are commensurate with its national strength. To [indistinct] 1.3 billion people, this itself is the biggest international responsibility and historic contribution made by China to this world. Thank you.

MODERATOR: Now we'll have a question from the Australian side, Fairfax, David Wroe.

JOURNALIST: David Wroe, the Sydney Morning Herald. Minister Wang, welcome to Australia. The new Administration in Washington has signalled it means to take a stronger and even more aggressive posture towards China on a range of issues. I won't run you through all of the comments that have been made by various officials, but except to perhaps just highlight remarks by Steve Bannon just last year predicting that China and the US would go to war over the South China Sea. Mr Bannon now sits on the National - or will sit in meetings of the National Security Council. Equally, we've had language out of China including a PLA website commentary stating that the chances of a war have become, quote “more real”. Question to you both and I hope that you both offer me a view on this: how concerned are you really by the possibility of war between the US and China. How did you address that in discussions today in terms of reducing the risk and what would your message on that question be to people across the Asia-Pacific region?

JULIE BISHOP: First, the Australian Government intends to assess the Administration on its actions and policies since the inauguration and the Administration is not yet three weeks since being established.

Secondly, we see the United States-China relationship as one of the most significant and important relationships for our region and globally.

The interest of both nations must be the continuing of peace, stability, security and prosperity of the respective nations and also those in our region.

We believe it is in the interests of both the United States and China and all our countries in the region that there be a positive and constructive engagement in the relationship between the leadership of China and the leadership of the United States.

We certainly look forward to there being a deeper more positive engagement between the United States and China, and Australia will do all we can as a strong strategic partner for both countries to encourage that deeper, constructive engagement for the benefit of our region and beyond.

This morning I had a very warm, engaging, positive discussion with Secretary of State Rex Tillerson. We discussed the importance of maintaining adherence to the international rules-based order under which many nations, including China and other countries in our region, have been able to grow and prosper. So we remain committed to that international rules-based order that has provided relative peace, stability, security and prosperity in our part of the world for decades passed. We encourage both China and the United States to continue their commitment to that rules-based order.

WANG YI: [Translated from Mandarin by interpreter] The diplomatic relations between China and the United States have been there for almost four decades. In the past four decades, there has never been short of a tough or sometimes even irrational failings on China-US relations, but such a statement aside, China-US relationship has defied all kinds of difficulties and has been moving forward continuously. Right now our two countries are committed to this new model of major country relations between China and the United States, but today, between the two countries, our engagement is so close, our interests are so closely intertwined. Last year bilateral trade extended over US$600 billion. Almost all states in the United States do business in China and almost all US universities have student exchange programs with China and also there are over 4 million visits between the two countries each year. Every day in a few minutes there is one flight travelling across the Pacific, and that is the reality of China-US relations today.

That is to say for any sober-minded politician, they clearly recognise that there cannot be conflict between China and the United States because both will lose and both sides cannot afford that.

I agree with what Madam Foreign Minister just said. What we assess is the official policy statement made by the Administration after inauguration, not campaign rhetoric, not some remarks made years ago.

I can also tell you that after Mr Donald Trump was elected the President of the United States he had an important telephone conversation with President Xi Jinping and the tone of that conversation is very positive. During the phone call President Xi expressed the Chinese side's expectation that China-US relations will move forward continuously and the then-President-elect Mr Donald Trump said I agree 100 per cent and China-US relationship is the most important bilateral relationship in the world.

Well it takes time for the new US Administration to better acquaint with and familiarise with China, but I'm sure that in time, as long as both sides remain committed to the promises and commitments already made, as long as both sides remain committed to the political foundation on which this relationship is built upon and continues to grow, all China-US relations will move forward in this transitional period and embark on a [indistinct] of faster and healthier development. That is to be expected because that serves the long-term and common interest of the Chinese and the American people.

I also appreciate the positive statements made by Madam Foreign Minister on China-US relations.

President Xi once told American friends that between China and the United States there can be a common and non-exclusive circle of friends and that circle of friends will continue to expand. Well for Australia it is an important member of that common circle of friends. Well Australia it can continue to be an ally of the United States, at the same time be a Comprehensive Strategic Partner for China. We hope and we believe that Australia will continue to deepen its Comprehensive Strategic Partnership with China in a way to make greater contribution for regional peace and prosperity and, as Madam Foreign Minister said, to play a constructive role for China-US relations.

MODERATOR: A question now from the Chinese side from the Xinhua News Agency.

JOURNALIST: [Translated from Mandarin by interpreter] From Xinhua News Agency: Happy New Year to both Ministers. I have two questions, first question is addressed to Foreign Minister Bishop. How do you see the relationship between TPP and the regional cooperation in the Asia-Pacific; now the United States is out, has Australia conceded in writing China in?

The second question for Foreign Minister Wang. How does China look at the relationship up until- How does China look at the regional cooperation in the Asia-Pacific and has China considered joining TPP since the United States is out?

JULIE BISHOP: Well first thank you for your question and your good wishes for the Year of the Rooster. I understand this means a year of diligence and hard work and the Foreign Minister and I certainly commit to that in enhancing the Australia-China Comprehensive Strategic Partnership.

Australia has long been committed to pursuing open freer trade, liberalising trade and finding new markets and enhancing existing markets for our goods and services throughout the world.

We are strong advocates of high quality, comprehensive free trade agreements and we have persistently pursued free trade agreements at the bilateral level including the China-Australia Free Trade Agreement, but also with other significant economies to our north.

Australia was an enthusiastic participant in the negotiations for the Trans-Pacific Partnership and while we are disappointed that the Trump Administration has announced that it does not intend to proceed to ratify the TPP, Australia remains committed to the principles and the standards and the spirit of the Trans-Pacific Partnership.

There are 11 remaining members of the TPP and they are in various stages of ratifying the agreement which has a two year period for ratification.

The other 11 countries, and I can only speak on Australia's behalf, the other 11 countries have indicated a willingness to continue to pursue the principles behind the TPP and there was always the opportunity for other nations who are prepared to meet those standards and embrace the principles of the TPP to join. That's the [indistinct] under the agreement.

Other countries have indicated some interest in joining the TPP and I would certainly encourage China to consider the agreement and the opportunities that may be presented for the agreement with 11 countries without the United States at this stage.

As His Excellency Foreign Minister Wang indicated, Prime Minister Turnbull expressed his support for President Xi's statement at Davos about pursuing open, free, liberalised trade. We certainly welcome that commitment.

And we look forward to further negotiations under the Regional Comprehensive Economic Partnership, known as RCEP, which includes as negotiating partners: China, the 10 ASEAN countries, and Australia.

We see open, free trade as being in the national interest of Australia, as providing great benefits to our country. We are an open, export-oriented market economy and our standard of living, our prosperity depends upon the ability and power of businesses to export their goods and services into the marketplaces of the world.

Asia is the most dynamic economic region in the world today and greater access to markets in Asia means more jobs for Australians and greater prosperity for Australia.

WANG YI: [Translated from Mandarin by interpreter] Well China adopts a positive and open attitude toward all regional arrangements that is conducive to regional economic integration that is good for maintaining the free trade between countries globally.

As we see today, there are various kinds of regional and sub-regional arrangements in this region. Some are getting stronger, some are encountering some difficulties, such as the TPP.

So experience has told us that for any regional cooperation we should first and primarily focus on the need of the economy, and should not be given political considerations. It should fully accommodate the level of comfort of all parties, and with that, the different levels of development of the different countries. It should not have all these standards set by one or several parties and ask other countries to accept such a standard. It should be open and inclusive and not pursue small groups.

Whether it is RCEP or TPP or any other regional cooperation arrangements, there has been a consensus among various parties including the United States, that they are all pathways leading to a larger goal, that is the Asia-Pacific free trade area. Well it may be one path is not working for the moment, but there are other pathways. But the goal is clear: we want an open, inclusive and larger scale free trade area in Asia-Pacific that will be conducive to maintaining the international free trade regime. While in this context, we stand ready to work with Australia to advance the RCEP initiative, which is led by ASEAN in the 10 Plus 6 Initiative. Some people believe it is a China initiative, but that is not the case. So we need to move forward on RCEP negotiations so that there will be an early agreement, so that we can, with the early conclusion of RCEP, make a greater contribution to the bigger ball of the free trade area in the Asia-Pacific.

MODERATOR: Last question from the Australian side please, ABC's Philip Williams.

JOURNALIST: Welcome to Australia's favourite city, Minister. I would like to ask a follow up question for my colleague. You said that any conflict between the United States and China would damage both countries, and yet we have had the explicit threats from Rex Tillerson, from others in the Trump Administration, that they want to challenge your claimed sovereignty of islands in the South China Sea. Now as part of our security arrangements with the United States - you will be aware of our ANZUS commitments - we could be drawn into any conflict. Do you have any message to Australia if they were ever confronted with this particular conundrum?

WANG YI: Will you go first?

JULIE BISHOP: Sure. Australia's long-standing position on the South China Sea has been consistent and fair and Foreign Minister Wang and I have discussed it on numerous occasions. Australia doesn't take sides on competing territorial claims. We have a strong interest in unimpeded trade and regional peace, freedom of navigation, freedom of overflight and respect for international law and it's been Australia's position and it remains that position. We have in the past, and we continue to encourage all claims to build trust, to refrain from any provocative actions. In particular we have been welcoming of dialogue of recent times between the claimants, that does certainly reduce tensions and avoids any risk of miscalculation. And from our point of view we have welcomed the fast-tracked negotiations for a code of conduct between China and ASEAN.

And our position has been consistent and clear that all activities and any agreements between the claimants must be consistent with international law and that Australia will play our part in seeking to ensure that the international rules-based order is adhered to in the South China Sea and beyond.

WANG YI: [Translated from Mandarin by interpreter] I have a piece of advice for our American friends: that is to revisit the history of the Second World War. While in the context of the long history of human race, it hasn't been long since the World War Two ended, some of the important outcomes of the World War Two include the Cairo Declaration Statement and the Potsdam Declaration. In these documents is clearly provided that territories illegally stolen by Japan from China should be returned to China and those territories include Nanxiao Islands. And back then it was with the help of the United States that the then-Chinese Government took back the Nanxiao Islands in a law-based manner, in a public manner and effective way and resumed exercise of sovereignty over Nanxiao Islands.

And years later some countries in the neighbourhood of China illegally occupied some islands and reefs in Okinawa Islands and that gave birth to the dispute in the South China Sea. Regarding such disputes China has always committed itself to the peaceful settlement based on [indistinct] and confrontation and based on international law. This position has not changed and will not change.

With the concerted efforts from China and ASEAN situation in the South China Sea is becoming more and more stable. Between China and the Philippines, two parties to the disputes, we have established this bilateral consultation mechanism on maritime issues. At the same time China is working with the 10 members of ASEAN to advance COC consultation. China and ASEAN countries with a view to establishing original rules that are accepted to China and ASEAN countries.

That means that for specific disputes things have returned to the right track of seeking dialogue and consultation based negotiation results between parties directly concerned and for peace and stability in the South China Sea, China and ASEAN countries will work together to entertain that.

So now as things stands the parties directly concerned have agreed to work out and solve relevant disputes based on the provisions of the COC. So for non-regional countries what they need to do is to support such positive approach by regional countries rather than the contrary. What I put emphasis on is the new US Defence Minister said a few days ago, he said it is important to hear the words and to diplomacy to all disputes on Nanxiao Island. That has been the consistent position of China and I believe it is also the position of Australia.

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