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Address by H.E. Ambassador Ma Zhaoxu At the ACBC ChAFTA Forum
2015/09/03

(1 September 2015,Brisbane)

Ms Nussara Smith, CEO of ACBC Queensland,

Consul-General Zhao Yongchen,

Mr Lance Hockridge, Managing Director of Aurizon

Distinguished Guests,

Ladies and Gentlemen,

It gives me great pleasure to attend the ACBC ChAFTA Forum. I wish to take this opportunity to thank you all for your long-standing support and contribution to China-Australia business cooperation. I also want to acknowledge and thank the ACBC and CCCA Queensland branches and the Chinese consulate general in Brisbane for your efforts and support for the forum. This event has given a good opportunity to our business communities to learn more about and make good use of this landmark agreement. You had in-depth, specific and professional discussions on ChAFTA this morning. I would like to contribute by sharing my observations with you on the subject.

Having gone through 21 rounds of negotiations in the course of 10 years, ChAFTA was finally signed in June in Canberra. It is a FTA that China has ever reached with other countries with the highest level of trade liberalization and investment facilitation, covering a wide range of areas such as goods, services, investment and regulation. We both aim high in our commitments. We have attained the goal of a comprehensive, quality and balanced agreement set by the leaders of our two countries. The signing of ChAFTA marks not only a milestone in our bilateral ties but also a new high in our mutual trust and cooperation. Just as President Xi Jinping wrote to Prime Minister Tony Abbott, ChAFTA will provide the two countries with a higher platform and stronger institutional guarantee for closer and mutually beneficial cooperation. It may also serve as a useful model for high-standard economic cooperation and trade arrangements in the Asia-Pacific region, boosting economic integration and common development.

Ladies and Gentlemen,

ChAFTA is a win-win agreement. It promotes closer and stronger business cooperation between China and Australia. And it offers unprecedented opportunities to the business communities in both countries.

Our trade will gain new momentum. After its coming into effect, all Chinese exports to Australia will ultimately enjoy zero tariff. 96.8% of the tax items of Australian goods exports to China will ultimately be tariff free. There will be a surge for many Australian exports such as beef, wool, wine, dairy products, and the same is true for Chinese products such as garments, electronics and chemicals. Some analysis estimates that the agreement will contribute 0.7 and 0.1 percentage points to Australia and China’s GDP growth rates respectively. Our two way trade will grow by more than $US 16 billion in just one year after ChAFTA comes into effect, roughly 10 per cent of the two-way trade volume in 2013. In the context of economic restructuring and downward pressure, ChAFTA will be a crucial driver for economic growth and employment to both countries.

ChAFTA will improve opportunities to investors in both countries. From day one of the agreement, the two countries will give each other the most-favored-nation treatment and further lower thresholds for investment review. Specifically, the Australian government will liberalize its screening threshold for Chinese investment from $248 million to $1078 million, except for investment by Chinese state-owned enterprises and in individual sensitive sectors. The two countries are also committed to further open up their services sectors to each other. Such substantive steps will give a strong boost to bilateral cooperation in such areas as energy, resources, finance, tourism, education, old age care and agriculture, spurring growth and creating jobs.

ChAFTA will also open up new horizons for our people-to-people exchanges. After the agreement enters into force, educational interactions and cooperation will be broadened and deepened. Australia is reputable for its educational sector and more Chinese students will have better access to Australian universities. Australia will issue work and holiday visas (462 visas) to enable eligible Chinese youngsters to get to know Australia better and enrich their experiences. Australia will also give temporary entry and stay to some Chinese in some special occupations that Australia really need, such as Chinese chefs, martial arts coaches, mandarin language tutors and traditional Chinese medicine practitioners. The New Colombo Plan takes off in China this year with more than 500 Australian students choosing to study and work in China. This figure will probably increase to 900 next year. Such closer people-to-people links will certainly enhance our mutual understanding and friendship and strengthen our comprehensive strategic partnership.

Ladies and Gentlemen,

The signing of ChAFTA is not the finish line of this long run. It is just a beginning. It is necessary to help people on both sides realize how ChAFTA is a mutually beneficial and balanced agreement and how it would boost economic growth and deliver benefits to every one of us.

Both our business communities need to appreciate and make full use of the rules of the agreement to explore new growth areas and maximize business opportunities and benefits.

Last but not least, more work needs to be done to complete domestic legal processes in both countries and to bring the agreement into force at an early date so that Chinese and Australian businesses and consumers could benefit from the agreement sooner rather than later.

Ladies and Gentlemen,

China-Australia ties are in an important stage of development. The two countries established a comprehensive strategic partnership last year during H.E. President Xi Jinping’s state visit to Australia. Following that, we have seen the signing of the landmark ChAFTA, and Australia joining the Asian Infrastructure Investment Bank (AIIB) as a founding member. These momentous events open up broad horizons for bilateral cooperation across the board.

It is also worth mentioning that China is carrying out the “One Belt, One Road” initiative in partnership with Australia and other countries. The Maritime Silk Road will connect China’s coastal cities, across the South China Sea, with the South Pacific. Australia is an important country along this route. China welcomes Australia’s participation in the Maritime Silk Road. The two countries have already agreed to work together to move forward the initiative for win-win results. I hope Chinese and Australian people and businesses from across the sectors will actively explore opportunities for cooperation in this joint endeavor.

Ladies and Gentlemen,

You may all share a keen interest in where the Chinese economy is heading since China is Australia’s largest trading partner and the two economies are highly complementary. Recently, there have been some short-term fluctuations in China’s stock market. But this has not changed the fundamentals of China’s economy. Indeed, recent world market volatility has added new uncertainties to global economic recovery. The impact is also felt in China's financial markets as well as imports and exports, adding new pressure to the Chinese economy. In the context of complex and uncertain situations abroad and deep-rooted challenges at home, China has pressed ahead with structural reforms and rolled out a host of targeted macro-regulation measures which are already paying off.

The Chinese economy is operating within an appropriate range and China continues to lead the world in terms of growth. In the first half of this year, 7.18 million new jobs were created and per capita real income grew by 7.6 %, faster than GDP growth. The quality of the Chinese economy is improving remarkably. Services have surpassed manufacturing and account for 48% of the total GDP. Consumption has contributed to 60% of China’s GDP growth. About 2 million businesses were set up in the first half of this year which means 11000 new businesses registered every day. E-commerce, robots and other innovative sectors have grown by 40-50%. While the traditional drivers for growth are not as strong, China has come up with new measures to bolster reform and opening up, including providing more public goods and services, and encouraging mass entrepreneurship and innovation to boost the growth momentum.

China is committed and has made remarkable contributions to global efforts in tackling climate change. Most recently, China has made serious pledges to cut emissions. China’s national actions by 2030 are as follows: to peak its carbon dioxide emissions around 2030; to cut carbon dioxide emissions per unit of Gross Domestic Product (GDP) by 60 to 65 percent from the 2005 levels; to increase the share of non-fossil fuels in primary energy consumption to around 20% and increase the forest stock volume by around 4.5 billion cubic meters compared to the 2005 levels. It shows that China’s economy is growing on a more sustainable course. China will continue to restructure its economy, step up reform and opening-up and go global faster in pace and broader in scope, from which the world would have even more to benefit.

Ladies and Gentlemen,

Before conclusion, I would like to inform you that China and Australia already signed a deal on live cattle trade (Protocol on Quarantine and Health Requirements for Cattle for Meat Purpose to be Exported from Australia to China). The first shipment of Australian live cattle will leave for China in the near future. I believe that after ChAFTA comes into effect, more and more Australian agricultural produce will find its way into Chinese markets. It is also my hope and belief that both our two countries will seize the opportunities to expand cooperation and usher in a brighter future for China-Australia relations.

Thank you.

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