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Speech at Breakfast held by Committee for Economic Development of Australia

The Ambassador of the People's Republic of China to the Commonwealth of Australia H.E. Mr. Zhang Junsai delivered a speech at breakfast held by Committee for Economic Development of Australia on 15 June, 2007 at Hyatt Hotel, Canberra. The full text of the speech is as follows:

Mr Ivan Deveson, Chairman and National President of Committee for Economic Development of Australia,

Mr David Byers, Chief Executive of Committee for Economic Development of Australia,

Professor Glenn Withers AO, State President ACT of Committee for Economic Development of Australia,

His Excellency Mr. Prabhat Prakash, High Commissioner for India to Australia

Ladies and Gentlemen,


Good morning. I am honored to be invited at this breakfast to talk to you on China-Australia relations.


It has been 3 months since I came to Australia as Ambassador, but I am no stranger to this country. I worked in Canberra once and that was between 1997 and 2000.


I have noticed that my predecessors have talked on the same subject at several CEDA functions before. I hope my briefing today will give you some updated information.


It's true. Our bilateral economic relations have developed in a remarkably good momentum in recent years. I think I could feel it easier than lots of people. In 2000, when I completed my post here, the trade volume between the two countries only reached 8.45 billion US dollars. But in 2006, the figure has exceeded 33 billion US dollars, almost 3 times more than 7 years ago.


If we look from the beginning when China and Australia established the diplomatic relations 35 years ago, the increase in the bilateral trade is more exciting. From 1972, it took us 24 years to bring our trade volume to 5 billion US$. We doubled it in 6 years' time to 10 billion US$. Since then we have been increasing our trade in every two years from 10 billion US$ to 20 billion US$ and then to 30 billion US$.


As for people to people links, only 120,000 Chinese tourists visited Australia in 2000. Last year the figure was 300,000 with 150% increase.


The number of the registered Chinese students in Australia in 2000 was 9,000 and in 2006 the figure was more than 90,000. It was 9 times more. China has become Australia's NO. 1 source country of overseas student. One in every 4 overseas students in Australia comes from China.


The cultural exchanges have been closer as well. In 2006, the series of cultural activities entitled Experience the Chinese Culture in Australia comprised more than 60 performances, exhibitions, forums and etc and was estimated to have attracted 1.2 million Australians. This is China's ever largest and longest cultural programme in Australia.


I think there are two factors contributing to the robust developments of China-Australia relations.


First, frequent high-level exchanges have helped building mutual political trust between the two countries.


From China, we always look at China-Australia relationship from both strategic and long-term perspectives. We commit ourselves to further promoting and deepening China-Australia relations. Since reforms and opening-up 28 years ago, China has maintained political stability and fast-growing economic development. It provides solid foundations for China to develop the relations with foreign countries, including Australia.


From Australia, we have seen a bipartisan policy to develop friendly relations with China. China's development is viewed as an opportunity, not a threat. The idea of containing China is opposed. This is the political basis that enables the two countries to work together in all areas.


Second, the two countries have high complementarities in all fields, which continuously provides strong level of impetus for the development of our bilateral relations.


In the field of energy and resources, China is now in a period when its industrialization process is accelerating. So China is in strong demands of production materials. Australia has abundant energy and resources. Those as iron ore, natural gas, alumina, and uranium are all that China needs in huge volumes. In the last few years, the volume of resources that China has imported from Australia accounts for 60% of its total import volume from Australia. Take iron ore for example, last year China imported 127 million tons from Australia, accounting for 38.9% of the total volume of imported iron ore from the world.


In recent years, the comprehensive developments of China-Australia relations, especially our economic and trade relations have brought huge benefits to both countries.


On one hand, Australian exports of energy and resources to China significantly contribute to the sustainable development of China's economy. Australia now is China's largest supplier of iron ore and alumina, the second largest of coal and the fourth largest of copper. Australia is also an attractive investment destination to more and more Chinese enterprises. China's non-financial direct investment to Australia has reached 675 million US dollars by the end of 2006.


On the other hand, China's economic growth has brought substantial benefits to Australia. Those benefits have promoted continuous growth of Australia's GDP, fiscal surplus, per capita income and stock exchange index.


However, our cooperation goes well beyond energy and resources. China also brings opportunities to Australia in the areas of tourism and education. Let me give you some figures. The first is about tourism. A recent research report shows that more than 300 thousand Chinese tourists visited Australia in 2006 and they spent 1.5 billion AU dollars in total. That means an average per capita consumption is 5000 AU dollars. The report also predicts that there would be 1.2 million Chinese tourists coming to Australia by 2012 and their estimated consumption will be 6 billion AU dollars. But as China's national income keeps increasing, the Chinese tourists' per capita consumption would be definitely much more than the current level.


The second is about the Chinese overseas students. As far as I know, one Chinese student in Australia annually needs to spend 40,000 AU dollars in total with 20,000 AU dollars for student fees and the other 20,000 AU dollars for living costs. In 2006 there were about 90,000 Chinese students in Australia. If we presume every one of them study here for 4 years averagely, they will totally contribute 14.4 billion AU dollars to the Australian economy.


While summarizing all the achievements we had from our bilateral relationship, one might wonder whether this rapid development of the China-Australia relationship will keep its speed in the future as we have already reached a very high level. My answer is "Yes". There are 3 reasons.


Firstly, persistent development of China's economy is the massive drive to the China-Australia economic relations.


China's GDP increased by 10.7% in 2006 and it has been in two-digital increase for four consecutive years. China now is the fourth largest economy in the world. Since China adopted opening-up and reform policy 28 years ago, China's GDP has grown by an average of 9.5% per year. In 2006, China's foreign trade volume was 1760.7 billion US dollars, an increase of 23.8% than the previous year. China's foreign exchange reserve is 1066.3 billion US dollars.


China's economy has been more internationalized and integrated to the process of globalization. According to the statistics of the World Bank, the contribution rate of China's economy to the world economic growth is 13% in the past 5 years.


Secondly, the establishment of FTA will provide an important opportunity to the future development of the China-Australia economic relations.


So far the two sides have held 8 rounds of talks with some progress achieved. Given the difference of economic structures and the level of the developments, our two countries surely have their own areas of sensitivities. it's only natural that we may come across difficulties from time to time.


However, the leaders of both countries have reached the consensus on the establishment of FTA. So long as we adhere to the principles of 'mutual understanding and accommodation, mutual benefit and win-win orientation', we will certainly strike a comprehensive deal of high-quality and mutual benefits. Once we reach the agreement, it will greatly enhance the level and proficiency of our economic cooperation.


Thirdly, there are more and more new areas of cooperation between our two economies.


Recently, climate change and environmental protection have become global issues and a common concern for all countries. The G8 summit had a comprehensive discussion about it not long ago. This year's APEC leaders' informal meeting held on this coming September will also list it as one of the major topics.


To address the issue, the Chinese government established the national leading group a few days ago, as you may call it "task force". This group is headed by Premier Wen Jiabao and has released the national plan in dealing with the climate change.


Australia has advanced technologies in field of environmental protection, such as clean coal, carbon dioxide's capture and storage, etc. Our two countries are working closely in this field both bilaterally and multi-laterally. At the beginning of this year, we established the joint working group of the appliance of clean coal technology following the initiative by the Prime Minister of Australia. Our cooperation under the framework of AP6 has made good progress. We can expect to have more and more projects between the two countries in the future. This will provide huge business opportunities to both Chinese and Australian related industries.


Australia's financial institutions have gradually increased their investment to China. The Commonwealth Bank, the ANZ Bank and the Macquarie Bank have all established local branches or joined local financial institutions in China. Some 500 million AU dollars have been invested in China's financial sector. Since China is accelerating its financial reform and opening-up, China will definitely become one of the major overseas business destinations for the Australian related industry.


This year marks the 35 anniversary of the establishment of diplomatic relations between China and Australia. High-level exchanges between the two countries will be particularly frequent. Most recently, China's Deputy Premier Mr. Zeng Peiyan and Vice-Chairman of the National People's Congress Mr. Sheng Huaren visited Australia respectively. From the Australian side, the Ministers for trade, defence and health also visited China one after another. These exchanges of visits have highly promoted our cooperation in fields of trade, energy, health and parliamentary exchanges.


September this year, the Chinese President Mr. Hu Jintao will attend the APEC summit and pay a second state visit to Australia. The visit is of paramount significance for China-Australian relationship. We believe President Hu's visit will bring the China-Australia relations to a new high.


Thank you.

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