On May 4, 2015, Australia's biggest-selling national newspaper The Australian published a signed article titled "China and Australia Will Grow Closer" by Chinese ambassador MA Zhaoxu. The full text is as follows:
China and Australia Will Grow Closer
China's economy is entering a "new normal", and so is the China-Australia economic relationship.
The growth trajectory of China's economy is of keen interest to many Australians who may be concerned about China's economic slowdown and its repercussions for Australia's economy. This is understandable since the two economies are highly complementary. But a closer look at China's new normal might lead to a different and more reassuring observation.
After three decades of high speed growth, China's economy is shifting toward a medium-high growth model, which has seen a 7.4 per cent growth last year and is to maintain a 7 per cent growth this year, still one of the world's fastest growing economies. Given that China's GDP exceeded $US 10 trillion last year, the increment will be more than $US 700 billion equivalent to nearly half of Australia's GDP in 2014. As Former Foreign Minister Bob Carr put it, "China growing even at 7 per cent is adding more dollars to its economy than it was a few years ago when it was growing at 10 per cent."
But China's economy should not be viewed only by its growth rate. Structural adjustments are now a vital part of China's economic story. China's new normal focuses on quality, efficiency and innovation that will guarantee economic sustainability. The economic structure is improving, most notably reflected by a fast growing service sector that accounts for up to 48 per cent of GDP and a higher level of domestic consumption. More inputs go into education, healthcare and other social services to deliver higher living standards. Overall, China's economic condition is changing for the better.
The Australian economy is in transition as well. And the new normal of the Chinese economy will continue to play a vital part in that process. Falling commodity prices and Chinese economic restructuring have prompted concerns about the fading of Australia's mining boom, which was driven largely by China's economic growth and strong demand for resources from 2008. The value of Australian iron ore exports to China did fall slightly last year due to the slump in commodity prices, but the volume remained high and reached a record of 548 million tones, increasing by 31.6 per cent on 2013. Demand for iron ore and coal will remain strong and Australia's resources exports to China will stay robust since China's dynamic industrialization and urbanization will continue for many years to come.
Furthermore, one should not neglect the fact that a new boom - in services, agriculture and infrastructure sector is gaining momentum. China's economic restructuring is generating greater demand for tourism, education, and financial services as well as agricultural produce and new technology. The China-Australia services trade reached $ 896 million in 2013. About 720,000 Chinese tourists traveled to Australia last year, constituting the largest source of tourism revenue to the Australian economy. Much more potential remains to be tapped. Statistics show that a total of 100 million Chinese tourists traveled abroad last year, and more than 500 million overseas trips are estimated to be made in the coming five years. Australia could get a bigger share of this huge Chinese market if the right measures are put in place. As with tourism, Australia's universities are also among the most popular destinations for Chinese students. China continues to be one of the largest export markets for Australian education services. Many more Chinese parents are planning to send their children to Australia for study.
Australia's business and financial services sector is well placed to benefit from the opening up of China's financial system and its efforts to internationalize Chinese currency, the Renminbi (RMB). Success stories like the Sydney RMB Clearing Bank and Australian financial institutions operating in the Shanghai Free Trade Zone will only encourage more followers. China is going to import more than $US 10 trillion worth of goods and services and invest more than $US 500 billion abroad in the coming five years, presenting new trade and investment opportunities to Australia's business community.
The significance of three major opportunities for China-Australia cooperations-the FTA, the Asian Infrastructure Investment Bank (AIIB) and the 'One Belt One Road' project-needs to be fully appreciated. On taking effect, the bilateral free trade deal will contribute another engine at full blast towards business cooperation. Some analysis indicates that bilateral trade will grow by more than $US 16 billion after the trade pact comes into effect, roughly 10 per cent of the two-way trade volume in 2013. The Asian Infrastructure Investment Bank, of which Australia has become a prospective founding member, will help fill the gap in funding infrastructure development across the region. For Australia, meeting investment demands in infrastructure will be a good starting point. China is now initiating the 'One Belt One Road' project, that is the Silk Road Economic Belt and 21st Century Maritime Silk Road. The Maritime Silk Road will link China and Australia through the South Pacific route, enabling the two countries to share their respective strengths in market, capital, technology and infrastructure development - opening up another front of trade and investment opportunites.
Seizing these opportunities is vital to both China and Australia. They are being grasped-with Chinese President Xi Jinping's successful state visit to Australia last year generating new momentum for further bilateral co-operations. The latest developments include the smooth progress towards the China-Australia FTA, the launching of the Sydney RMB Clearing Bank, implementation of the New Colombo Plan in China, and the ramp-up of Chinese tourist arrivals in Australia-Tasmania alone receiving 60 per cent more Chinese tourists than before. Links between local governments and China are also growing remarkably as premiers and chief ministers travel to China seeking stronger economic, cultural and people-to-people ties with their Chinese counterparts.
In conclusion, there are plenty of reasons to feel upbeat about the outlook of our respective economies. But being optimistic about the prospect is one thing, making it happen is another. It needs, especially, innovative ideas and bold action by and between both countries.