Vision Down Under

时间:2022-10-13 05:58:14

President Xi had been to Australia four times before his first state visit in November. His brief visit this time round to Hobart, Tasmania, also meant Xi has now visited every major Australian population center, and every state.

Xi addressed the Australian parliament in Canberra on November 17 with an unusually warm speech according the bilateral relationship the status of a “comprehensive strategic partnership,” rather than the“strategic partnership” he has spoken of before. Later, Xi stood beside Prime Minister Tony Abbott for the signing of a much-anticipated Free Trade Agreement (FTA), speaking of a need for a Sino-Australian relationship which was “more visionary and imaginative.”

So why the gushing remarks?

Since 2009, China has been Australia’s largest trading partner, overtaking Japan. Australia supplies over half of China’s iron ore and a significant amount of coal. But it is also the destination for increasing amounts of Chinese State and non-state investment. Reports issued by KPMG and the University of Sydney China Studies Centre’s “Demystifying China” series over the last four years show that Chinese direct investment across Australia has been both rising and diversifying. Chinese enterprises are now investing in Australian property, agribusiness and finance, and leaning away from mining and resources. In many ways, Australia stands literally at the coal face of trade engagement with the world’s second biggest economy.

This intensifying trade and investment linkage means that, in many ways, the bilateral relationship has had to be put in a wholly new context, one which is more complex and more dynamic. Analysts and commentators in the past were fond of referring to the Australian dilemma of relying on China for their economic interests, and America for security. But the Xi visit made clear that there is now no easy division. The preservation and strengthening of economic interests is vital to security, and security is central to a good economy. If we see them as part of the same spectrum, rather than occupying different realms, then the challenge that Australia now faces, together with many others, is having a clear idea of where its interests lie and what sort of diverse international partnerships it needs to preserve these.

It is to this issue that President Xi’s words of needing “more imagination” were most likely a reference. Australia can sometimes be perceived as slavish in its observance of US leadership in foreign policy. This has been an issue since the Rudd premiership in 2009 agreed, for the first time ever, to have US marines stationed on a rotating basis in Darwin. Questions resurfaced last month when Australia initially expressed interest in being part of the Asia Infrastructure Investment Bank Beijing was setting up, and then reportedly withdrew due to US pressure. Xi’s visit was a good reminder that Australia needs to think beyond a region and a world where straightforward following of the US is sufficient. China’s economic fortunes are now so tightly tied to Australia’s that a fall in growth north travels south almost instantaneously.

This quest for a more subtle, sophisticated framework within which Australia can engage with China is best seen through the prism of the Free Trade Agreement which was finalized on 17th November. The FTA is, in fact, a broad outline of common areas where more specific discussions and deals will now be able to take place. In essence, it maps out a broad area of consensus between the two countries where they feel it is in their mutual interests to work more closely with each other, and allow better access to their respective domestic markets. It sets the stage for future economic engagement better, but still means that real practical business has to be undertaken. Companies from both sides, with government help, now have to go out and do the real work.

Australia has grown complacent on easy returns simply sending huge amounts of resources into the Pacific, and receiving huge payments from China in return. In 2013, raw materials exports alone accounted for almost 90 per cent of the Australian exports to China, with services making up less than 6 per cent. As the need for resources in China changes, and the more service orientated, urban economy there develops in the coming years, Australia has to rethink the very basis of its relationship, and the FTA at least allows that process to start. Sydney is a major finance centre, and 80 per cent of the Australian economy is made up of the service sector. It is a creative, innova-tive, globalized economy, one with a highly educated work force, and some of the best universities in the world. It is not surprising therefore that realigning the bilateral relationship to be service sector orientated rather than simply resource based is far more sustainable and needs to start happening now.

This means enhancing the ability of Australian finance and service sector companies to operate in China, and finding partnerships there. The opportunities on offer for direct Chinese currency trading, for instance, which was also agreed in the November 17 agreement, and the chance for Australian banks to open branches more easily in China and to engage in yuan-denominated trading are all crucial. So too are the provisions in the FTA framework for insurance, tourism and other companies to do more in China. Australia currently has an edge, but both sides need to be willing to see it wielded. They cannot continue to be complacent. The initial yuan trading settlement agreement signed in 2013 with Sydney as a hub has garnered less enthusiasm from Australian companies than it might have.

If the Australia leg of President Xi’s visit was dramatic and eyeopening for many Australians, allowing them to see the leader of their largest trading partner first hand for the first time, then his visit to New Zealand was lower key. New Zealand has one of the most straightforward relations with China. It signed its own FTA over six years ago, and is a major agricultural supplier. It suffers few issues over security or economic partnership that its larger neighbor does. In many ways, New Zealand’s challenge in China is simply raising its profile. In this respect it too needs to diversify its dealings with the People’s Republic beyond the agribusiness sector. There has not been a high level visit from China to the country for many years, so this was a major opportunity to show Asia’s leading economy that New Zealand is more than a remote provider of dairy produce and the place where the Hobbit films are being made.

This visit has been one of Xi Jinping’s most successful. In the space of seven days, President Xi signed a major environment deal with the US at APEC in Beijing, attended the G20 in Brisbane to discuss maintaining sustainable global growth, and then reframed the Australia and New Zealand relationship with his country. The real issue now is whether local politicians in these two countries have the imagination and energy to lift their heads from their domestic concerns and really take up the challenges of driving towards a new relationship.

Because of parochial interests and ideological differences, Mr Abbott, widely painted as a climate change , did not wish to discuss the environment at the G20, despite the summit giving prominence to the issue. Xi Jinping, fresh from a groundbreaking commitment to a carbon cap, found little enthusiasm for the subject even though Abbot appeared keen to engage on almost every other topic.

This was a dark cloud over an otherwise glowing few days. In the sustainability field, China and Australia have huge common interests and a lot more they could potentially share. Abbot’s visible lack of imagination and vision at precisely the time when even pragmatic President Xi was asking for dialog may prove his undoing. For now, it may well go down as a major missed opportunity.

But for the rest, this was a hugely successful visit, and one that has set a new tone for regional dynamics which will have impact for years to come.

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