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Ambassador Ma Zhaoxu's Keynote Speech at "ChAFTA Melbourne Night" Hosted by ACBC and CCCA
2015/09/29

China-Australia Relations at a New Starting Point

The Hon Steven Ciobo, Minister for International
Development and the Pacific,
The Hon Mr. Bruce Atkinson, President of the Legislative
Council of Victoria,
The Hon Matthew Groom MP, Minister for State Growth of
Tasmania,
The Hon. John Brumby, President of ACBC,
Consul-General Mr. Song Yumin,
Ladies and Gentlemen,

I am delighted to attend "ChAFTA Melbounre Night" hosted by ACBC Victoria and CCCA Melbourne. Today marks the 100th day of the official signing of ChAFTA on 17 June. In the Chinese tradition, a celebration event should be held for the 100th day of a new-born baby. It has made this evening all the more relevant and befitting, as ChAFTA is just like a new-born baby of the two countries. As a comprehensive, high-quality and balanced agreement, ChAFTA is a milestone in our bilateral ties, marking a historic high in strengthening political trust and practical cooperation between China and Australia.

ChAFTA is a win-win agreement for three reasons. It will lend fresh impetus to trade growth. It will create new opportunities to expand two-way investment. It will open up new horizons for people-to-people exchanges. The sooner ChAFTA comes into force, the quicker it will benefit producers and consumers in both countries. As a Chinese saying goes, "It takes ten years to grow a tree". ChAFTA took both countries ten years to negotiate. It represents a hard-won and historic opportunity that should not be allowed to slip through our fingers. As Minister Andrew Robb recently gave an example, Blackmores, an Australian health product company, saw its sales to China skyrocketed to $75million this year from just $2 million the previous year. But that might be just like a peanut starter before a meal, if one thinks about a world of difference ChAFTA will make after it comes into force. Only then tariffs as high as 35% for Blackmores' exports to China will be completely removed and the company foresees a further ten-fold increase in its sales to Chinese consumers. Blackmores' happy experience is just one of many success stories of Australian businesses exploring Chinese markets. Fortune favors only the prepared minds.

Ladies and Gentlemen,

Chinese President Xi Jinping has just paid a historic state visit to the United States. It is another significant interaction between Chinese and American heads of State after their in-depth discussions in 2013 in California and in 2014 in Beijing. Contrary to some media speculations, it turned out that the catchword of this visit is cooperation. As president Xi stressed, if China and the US join hands together, it will create "one plus one greater than two effect". The cooperation of the two countries will serve as an anchor of global stability and propeller of world peace. As President Obama said, he had reached consensus with President Xi on further strengthening bilateral cooperation across the board. He believed that the United States and China need to cooperate and are able to maintain cooperation. The two sides should expand cooperation in an inclusive spirit so as to make both countries stronger. China and the United States should continue to uphold the principles of non-conflict, non-confrontation, mutual respect and win-win cooperation, and take more resolute actions to enhance coordination and cooperation in bilateral, regional and global dimensions so as to manage differences and sensitive issues. Both leaders recognized that China and the United States have broad common interests in the Asia-Pacific. The two sides should deepen dialogue in Asia-Pacific affairs at various levels, build a relationship featuring positive interaction and inclusive cooperation in the Asia-Pacific, and work with other countries in the region to promote peace, prosperity and stability in this part of the world. In the China-US Presidential Joint Statement on Climate Change, China announced allocation of 20 billion RMB yuan, an equivalent of about 4.5 billion Australian dollars, to set up "Climate Change South South Cooperation Fund" and China's target of cutting carbon intensity by 60-65% below 2005 levels by 2030. China plans to launch a national carbon emissions trading market in 2017. It is by no means easy for a developing country like China to take those measures. There are still 200 million Chinese people living under the World Bank poverty line. China has made huge contribution to international response to climate change and has won worldwide acclaim. To judge China's emissions reduction effort by the standard of developed countries obviously runs counter to the universally accepted principle of "common but differentiated responsibilities" and is not fair.

The whole Asia-Pacific region stands to gain from stronger China-US cooperation, Australia in particular. As important countries in the Asia-Pacific, China, the United States and Australia are partners, not rivals. We have common responsibility to promote regional peace, stability and prosperity. We cannot deliver on this goal unless we work together focusing on our common interests rather than those distracting differences. Some of you may have noted the recent trilateral military exercise in the jungle of the Northern Territory with active participation of Chinese, American and Australian soldiers. It was already the second of its kind in just one year. It is a clear indication of the strong commitment of the three countries to strengthen mutual understanding and trust not only among their peoples but also their armed forces.

Ladies and Gentlemen,

Economy was another hot topic on the agenda of the China-US summit that attracted attention from far and wide. The world economy is not without challenges or uncertainties to say the least. Despite the complexity and volatility in the international environment and some downward pressure, the Chinese economy is still operating within the proper range. In the first half of 2015, the Chinese economy grew by 7%. It was neither easy nor insignificant for a 10 trillion US dollar economy. Its absolute growth volume is still larger than those in double-digit growth years. What's more, Chinese economic structure continues to improve. The services industry now accounts for almost half of total GDP. Consumption contributes to 60% of economic growth. China aims for not only fast but also quality and efficient growth. We are now stepping up efforts to shift our growth model, make structural adjustment and place greater emphasis on developing an innovation and consumption-driven economy. Meeting the challenges head-on, China will see its economy transformed and become even more dynamic, resilient and sustainable in the long run.

Being the second largest economy in the world, a stable Chinese economy is not only good for its own people, but also for the whole world. According to IMF statistics, in the first half of this year, the Chinese economy contributed to 29% of total growth of the world. Due to sluggish trade worldwide, commodity prices have been declining. That's why the value of China's imports decreased. But its physical volume still increased. Looking forward, China will adopt a more proactive import policy and place greater emphasis on the quality of imports and exports. China's overseas investment is on a steady increase. China's new initiative of "Silk Road Economic Belt" and "the 21st Century Maritime Silk Road" is aimed at promoting global cooperation, expanding China's opening up and pooling the comparative strengths of all countries. It will help build a global community of shared interests and win-win progress. China has been and will continue to be a major source of stability and growth for the world economy.

Ladies and Gentlemen,

China-Australia ties have been as strong as ever. There are at least nine No. 1s that we can claim for this relationship. China is Australia's largest trading partner, export market, source of import, source of trade surplus, market of agricultural export, destination of services export, source of foreign investment between 2013-14, source of tourism value and source of overseas students. According to the 2014 Australia-China trade report issued by ACBC, direct trade with China has contributed 5.5 percent to Australian GDP, doubling that of agriculture, forestry and fisheries combined. Nearly 200,000 Australian jobs depend on direct exports of Australia to China. Chinese tourists now contribute seven billion Australian dollars to the Australian economy each year. For every five dollars spent by foreign tourists in Australia, one dollar comes from Chinese tourists.

Chinese President Xi Jinping paid a successful state visit to Australia in November 2014, opening a new chapter in our comprehensive strategic partnership. A few weeks ago, Premier Li Keqiang sent his congratulations to Prime Minister Malcolm Turnbull, stating that China is ready to deepen mutual trust, expand cooperation and enhance multilateral communication and coordination between our two countries, so as to better serve our two peoples and promote development and prosperity in the region. Our bilateral ties are poised to grow even stronger from a new starting point. In his positive response to Premier Li's message, Prime Minister Malcolm Turnbull reaffirmed Australia's commitment to advancing the comprehensive strategic partnership between the two countries.

The signing of ChAFTA and Austalia's sign-up to the AIIB underline significant progress in bilateral cooperation. The two countries have reached concensus in docking China's 21st Century Maritime Silk Road initiative with Australia's White Paper to develop its North. Recently, the two countries signed protocols to allow China's import of live cattle from Australia. Australia's export of live cattle to China is expected to reach one million in the next decade, accounting for three quarters of total Australian live cattle export. The first batch of more than 100 live cattle will soon take to the air from Victoria and head to Chongqing, China.

Trade and investment cooperation has been strengthened and upgraded. Resources and energy sector maintains steady growth, while cooperation is booming in areas such as services, agriculture and infrastructure. In spite of a less-than-perfect economic environment, China-Australia trade was 12.6 billion Australian dollars in July, up 12% year on year, of which 7.4 billion Australian dollars were Australian exports to China, accounting for 34.45% of total Australian exports for the month. The first two quarters also saw an increase of iron ore exports to China by 22.3% and 6% respectively. For a hundred tons of iron ore that China imports, 63.6 tons is from Australia. Australia exports of barley, wool and natural gas also soared by 45%, 10% and 125% respectively in the first half of 2015.

In the coming five years, China is estimated to import a total of 10 trillion US dollars worth of merchandise from around the world, and make outbound investment of more than 500 billion US dollars. Australia still has a great deal of potential to tap in increasing exports to China and attracting Chinese investment.

The China-Australia relationship is not about buying and selling. It has grown far beyond economics and trade. Mutual trust and mutual benefit are like two indispensable wheels of a cart that help the relationship move forward. One could not expect a smooth ride with one wheel much bigger than the other. I am happy to see that these two wheels have both been reinforced and are now moving our relations forward. Mechanisms like annual bilateral meetings between heads of government, Foreign and Strategic Dialogue, Strategic Economic Dialogue and others have served to enhance understanding and trust between our two countries.

Military to military exchanges also contribute to mutual trust between China and Australia. A few days ago, I welcomed special guests of Pandaroo China-Australia joint exercise at our Embassy's National Day Reception. The Pandaroo joint exercise is just one of the many important mil-to-mil exchange programs we are running today between our two countries. A new round of Defence Strategic Consultation is to be held soon in Australia. A senior Chinese delegation is going to attend the "Sea Power Conference" here, and China's naval hospital ship Peace Ark will visit Australia soon.

More importantly, there is now growing popular support for this relationship. A recent poll shows that over 70% of Australians support closer ties with China. Chinese tourists made 100 million overseas visits last year, of which only 1% were bound for Australia. This figure alone says a lot about what can be done in China-Australia cooperation in tourism sector. Currently, around 240,000 Chinese students are studying in Australia. Likewise, many Australian students applaud the New Colombo Plan under which they are given chances to study in China. With the number of Australian students pursuing education and internships in China reaching 900 by 2016, China is set to become the most attractive destination under the New Colombo Plan.

Ladies and Gentlemen,

Premier Andrews completed a successful visit to China days ago. It was reported as a very fruitful visit, not only because a series of important agreements were signed, like the cultural agreement which will bring huge benefits to Victoria, but also because Premier Andrews had tried himself with some fascinating Chinese cultural experiences. I heard that he went to the traditional food street in Beijing and enjoyed a plate of Chinese dumplings to his heart's content. But obviously he took a serious decision not to go for another traditional Chinese specialty called fried scorpions. In his speech before the visit, Premier Andrews said that relations between Australia and China are "not about transaction, but about mutual trust". I highly appreciate his vision and wisdom. China and Australia are different in history, culture, value, social systems and stage of development. It is only natural that we may not see eye-to-eye on all issues. And it is essential to address our disagreement on the basis of mutual respect and equality, accommodating each other's core interests and major concerns. Our relations will only grow deeper and stronger when our mutual trust continues to strengthen.

Two years ago, when I visited Victoria for the first time since I came to Australia as Chinese Ambassador, I urged both sides to seize the opportunity and built a second "new gold mountain" for China-Australia and China-Victoria relationships. I believe, moving on the two wheels of mutual trust and mutual benefit, China-Australia relations as well as exchanges and cooperation between China, Victoria and Tasmania and all other states will grow from strength to strength, and the second "new gold mountain" will get even higher.

In two days time, we will embrace the 66th anniversary of the founding of the People's Republic of China. Please allow me to conclude by sending the best wishes to our relationship. May China-Australia relations grow ever deeper and stronger! May the friendship between our peoples last forever!

Thank you!

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