Australia cannot afford to be complacent about China

Australia cannot afford to be complacent about China

By Julie Bishop MP, The Deputy Leader of the Opposition

The first official overseas trip taken by China’s new president Xi Jinping has revealed a number of key priorities for China in coming years.

A predictable first port of call was Russia, with the two nations having a long-standing and deep relationship based not only on geography but also history and political systems.

Their trading relationship is also important.

China has been a significant buyer of Russian military hardware in the past, including advanced fighter jets, submarines and ships.

Russia is also a significant supplier of energy to China, a role set to increase in the wake of recent large sales of gas and oil.

Less predictable was the decision of the Chinese President to also visit Tanzania, Republic of Congo and South Africa.

However, this can be seen as a reflection of the increasing level of Chinese investment in Africa.

China is seeking to develop mineral and energy resources on the continent and the substantial investment is part of China’s long-term strategy of securing supply lines of critical commodities.

President Jinping would also be seeking to reassure African leaders that China’s investment and development approach is beneficial to their nations.

There has been disquiet in some countries about the approach of Chinese investors, specifically where infrastructure has been built using Chinese materials and labour, and similarly with mining developments that have brought in large number of Chinese workers.

This has led to instances of social unrest and violence towards Chinese companies and individuals.

Locals have complained that they are not seeing the expected benefits from the investment, thus triggering frustration, resentment and anger.

China may believe it needs to reassure African nations that its investment is mutually beneficial and that it is not seeking to exploit Africa as has occurred on that continent in years past.

Given that the EU, Japan, Taiwan and Australia (among others) have far greater two way trade and investment with China than any of the African nations, President Jinping’s visit indicates the high priority China is placing on relationships within Africa.

Australia cannot afford to be complacent about its economic relationship with China.

There are large mineral reserves in Africa that will present intense competition for Australia when they come on line.

The larger ships that are being built for transporting minerals around the world will further erode Australia’s advantage of geographic proximity to China.

Further, any debate about foreign direct investment from China must be conducted in a way that does not cause unnecessary offence or give the impression that such investment is unwelcome in Australia.

There must also be a consistently high level of engagement between the Australian and Chinese senior leadership.

It should be a positive development for an Australian Prime Minister to attend the prestigious Boao Forum in China, as Julia Gillard is doing this weekend.

However the Prime Minister will need to overcome a level of scepticism about her commitment to the bilateral relationship, which she has largely neglected until the middle of this election year.

The Prime Minister did not attend the 2012 Boao Forum nor did she send any member of her Cabinet, Ministry or backbench to officially represent the government.

This would have been unthinkable during the years of the Howard Government when, at the very minimum, senior Cabinet Ministers were dispatched to the forum each year.

This year will be the third time that I have represented the Coalition at the Boao Forum.

The Coalition has been making a concerted effort to build strong relationships with China’s leadership, including sending a delegation of five shadow Cabinet ministers to Beijing and Shanghai last December.

Should we be privileged to be elected to govern by the Australian people this year, we hope to hit the ground running in forging a stronger, deeper and more diversified relationship with China.

Like many other international relationships, there will be a repair job required with China.

First, China will need to be reassured that Australia once again offers a stable investment environment and that there will no longer be sovereign risk issues such as the imposition of mining and carbon taxes.

We will also ensure that Australia is seen as a reliable supplier of goods and services and we will reassure China that there will be none of the kneejerk panicked reactions of the Gillard government such as the ban on live cattle exports without warning or consultation.

While this ban did not directly affect China, the live cattle export ban dismayed many of our trading partners who feared disruption to other commodities should that trade become subject to political controversy.

An Australia-China Free Trade Agreement will also be a priority for a Coalition Government.

There are great opportunities for Australia that will come from China’s ongoing economic development.

However there are also many challenges, and managing those will require sensitivity and a deeper understanding that can only come from committed long-term engagement.


Copyright 2007