Annual Report 2008-2009

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Your location: Performance > Outcome 1 > Output 1.1 > 1.1.1 North Asia

OUTPUT 1.1: Protection and advocacy of Australia's international interests through the provision of policy advice to ministers and overseas diplomatic activity

1.1.1 North Asia

On this page: Overview :: Japan :: China :: Republic of Korea (ROK) :: Democratic People's Republic of Korea (DPRK) :: Mongolia :: Outlook


Photo - See caption below for description
The longstanding and complementary Australia–Republic of Korea relationship has been taken to a new level by Prime Minister Rudd and President Lee, Foreign Ministers Stephen Smith and Yu Myung-hwan and by Trade Ministers Simon Crean and Kim Jong-hoon. Here the two leaders confirm the warmth of relations to the media after discussions in Canberra on 5 March 2009. They issued a Joint Statement on Enhanced Global and Security Cooperation and announced an agreement to launch negotiations towards a bilateral free trade agreement.
Photo: Auspic
Enlarge image :: Photo gallery

North Asia is a region of major strategic and economic importance to Australia. North Asia’s markets account for just over half of Australia’s exports. The region’s continued stability and prosperity bear vitally on Australia’s national interests.

The department strengthened Australia’s ties with North Asia and promoted the Government’s political, economic and strategic objectives in the region. We facilitated high-level exchanges including visits to China, Japan and Korea by the Prime Minister. We supported a visit to Australia by the President of the Republic of Korea, during which Australia and Korea issued a joint statement on security cooperation. The department supported visits to Japan and China by the Minister for Foreign Affairs, and four visits to China by the Minister for Trade. We hosted visits to Australia by Korea’s Foreign Minister and Trade Minister and by Japan’s Foreign Minister.

We promoted Australia’s economic interests, including through ongoing negotiations for free trade agreements (FTAs) with China and Japan. The department also commenced negotiation of an FTA with the Republic of Korea.

We continued to advance Australia’s security interests in the region, including support for the denuclearisation of the DPRK.




  Exports Exports     Imports Imports  
Goods and services (a) 2007
Trend growth 2003–2008
Trend growth 2003–2008
Japan 34,655 53,183 16.3   20,031 22,833 4.0
China 27,731 37,086 27.3   30,247 36,707 18.6
Republic of Korea 15,328 20,236 16.3   6,415 6,986 7.0
Taiwan 6,464 8,742 14.9   4,529 4,736 6.1
Hong Kong, China 4,395 4,653 1.0   3,073 3,290 5.4
Other (b) 93 60 1.1   21 20 4.0
Total North Asia 88,666 123,960 18.0   64,316 74,572 10.5

(a) Goods data on a recorded trade basis, services data on a balance of payments basis
(b) Goods data only. Services data is not published by the ABS for these countries
Sources: DFAT Stars database and ABS Catalogue 5368.0


The department helped reinforce Australia’s significant ties with Japan, a key partner in North Asia. Australia and Japan share common values and a comprehensive economic, security and strategic partnership. The year 2008 was a record year for bilateral trade with Japan, which regained its position as Australia’s largest trading partner.

The department supported high-level visits to Japan that contributed to building the bilateral relationship and promoting Australia’s strategic and economic interests. We played a major role in supporting the visit of the Prime Minister, Mr Rudd, in July 2008 to attend the G8 Leaders’ Outlook Meeting in Hokkaido.

The Minister for Foreign Affairs, Mr Smith, visited Japan in December 2008 to attend the ‘2+2’ Meeting of Australian and Japanese foreign and defence ministers to advance security and defence cooperation. The ‘2+2’ meeting reaffirmed the commitment by the Australian and Japanese prime ministers in their June 2008 joint statement to promote bilateral security cooperation and peace and stability in the Asia-Pacific region and beyond. A key outcome of the ‘2+2’ meeting was agreement to begin discussions in early 2009 on a possible legal framework between the governments of Australia and Japan for information sharing. The department also coordinated Australia’s whole-of-government review and update of the bilateral security and defence cooperation Action Plan to reflect progress under the 2007 Australia–Japan Joint Declaration on Security Cooperation and set new goals.

Mr Smith welcomed the Japanese Foreign Minister, Mr Hirofumi Nakasone, to Australia as a Guest of Government in April–May 2009. The ministers discussed the G20, the Australia–Japan FTA negotiations, nuclear non-proliferation, whaling, collaboration in development assistance, including in the Pacific and in Afghanistan, and expanding people-to-people links. During his visit, Mr Nakasone met the Prime Minister in Melbourne.

The department hosted consultations on East Asia and the Pacific with senior officials from Japan’s foreign ministry.

The Minister for Trade, Mr Crean, promoted Australia’s trade and economic objectives in discussions with his counterpart, the Minister for Economy, Trade and Industry, Mr Toshihiro Nikai, at multilateral meetings, including the World Economic Forum in Davos in January 2009 and at the OECD Ministerial Council meeting in June 2009. Mr Crean also advocated the potential gains from successful conclusion to the World Trade Organization (WTO) Doha Round, our interests in promoting regional economic integration and Australia’s strong commitment to concluding with Japan a comprehensive free trade agreement.

To enhance Australia’s robust economic ties with Japan, the department facilitated the establishment of a new trade and economic ministerial dialogue with Japan, which Mr Crean announced on 26 June 2009. The inaugural dialogue meeting will occur in the second half of 2009. We supported Mr Crean’s advocacy of bilateral and multilateral trade issues. The department held three negotiating rounds with Japan on a comprehensive FTA (see sub-output 1.1.7).

Photo - See caption below for description
Parliamentary Secretary for International Development Assistance, Mr Bob McMullan, with the then Prime Minister of Japan, Mr Taro Aso, during the Pacific Islands Leaders Meeting (PALM) Five (V) Summit in Japan on 22 May 2009.
Enlarge image :: Photo gallery

Goods and services trade between Australia and Japan was valued at $76 billion, a 39 per cent increase on 2007. Merchandise exports to Japan rose by 59 per cent to $50.8 billion, mainly due to increased prices for resources such as coal and iron ore. Agricultural exports increased by 11 per cent to $5.8 billion. Japan remained our largest export market and was our largest market for coal, liquefied natural gas (LNG), beef, and dairy products. Merchandise imports were valued at $20.2 billion. Major imports were passenger motor vehicles and transport vehicles. In addition, Japan was Australia’s third-largest source of foreign investment.


FIGURE 5. Australia’s trade in goods and services with Japan

FIGURE 5. Australia’s trade in goods and services with Japan

The department coordinated a fifth round of the biennial Australia–Japan Conference. Held in Tokyo on 19 November 2008, the conference brought together senior representatives from politics, business, academia and the media. The conference was co-chaired by Sir Rod Eddington, Chairman of the Australia–Japan Business Cooperation Committee, and Mr Akio Mimura, Chairman of the Japan–Australia Business Cooperation Committee. The then Japanese Prime Minister, Mr Taro Aso, delivered the keynote address. The conference generated and promoted new ideas in support of the bilateral relationship.

We undertook intensified diplomatic efforts for reform of the International Whaling Commission and urged Japan to end ‘scientific whaling’ (see sub-output 1.1.9).

The department supported the Australia–Japan Foundation in its work to foster mutual understanding and goodwill between the peoples of Australia and Japan (see sub-output 3.1.2).


Photo - See caption below for description
Minister for Trade, Mr Crean, and the National Development and Reform Commission (NDRC) Chairman, Mr Zhang Ping,
meet to discuss the Australia–China FTA, in Beijing on 31 March 2009.
Enlarge image :: Photo gallery

The department supported a constructive bilateral relationship with China based on significant shared interests. We engaged with China on such important international concerns as the G20 response to the global economic crisis, climate change, nuclear non-proliferation and the WTO Doha Round. The department facilitated a busy program of high-level exchange, including visits to China by the Governor-General and the Prime Minister.

Australia’s economic and trade relationship with China continued to grow, despite the global economic slowdown. China was Australia’s second-largest two-way trading partner in 2008, with trade in goods and services reaching $73.8 billion, comprising 13.2 per cent of total Australian trade. Australia’s merchandise exports to China grew by 36 per cent to reach $32.3 billion. The department continued to work towards a free trade agreement (FTA) as a means of deepening the economic relationship (see sub-output 1.1.7). The department supported four visits by the Minister for Trade, Mr Crean, to China to promote Australia’s trade and economic interests in China’s rapidly developing inland regions and advocate Australia’s interests in the FTA negotiations.

The department coordinated the March 2009 visit to China by the Minister for Foreign Affairs, Mr Smith, for the second Australia–China Strategic Dialogue with his counterpart Mr Yang Jiechi. The dialogue covered global security issues and discussed ways in which China and Australia can work together in regional and multilateral forums to support shared objectives.

In the lead-up to, and during, the 2008 Beijing Olympics and Paralympics, we provided extensive support to the large number of Australians who attended the Games, including team members, Business Club Australia participants and spectators.

The department also facilitated visits to Australia by Chinese Communist Party Politburo Standing Committee members, Mr Zhou Yongkang (November 2008) and Mr Li Changchun (March 2009). These visits were aimed at increasing awareness of Australian perspectives within the Chinese leadership.

Under the Special Visits Program, the department hosted a visit by Professor Zhu Feng, the Deputy Director, Centre for International and Strategic Studies, Beijing University, to enhance awareness of Australia’s perspectives on strategic issues.

The department convened the 12th round of the Australia–China Human Rights Dialogue in February 2009 in Canberra, in which a wide range of concerns and issues were discussed (see sub-output 1.1.9).

The department organised the third annual High-level Economic Cooperation Dialogue in Canberra on 22 October 2008, co-chaired by Mr Crean with the Chairman of China’s National Development and Reform Commission, Mr Zhang Ping. The wide-ranging discussion covered bilateral trade and cooperation in clean energy and energy security, minerals and energy resources, transport and infrastructure, two-way investment and our respective economic reform agendas.

Iron ore remains Australia’s biggest export to China, almost doubling in value in 2008 to $18 billion. The department worked with industry to facilitate this trade, including by highlighting the importance of market principles as the basis for trade.

Agricultural exports remain an important component of bilateral trade. China is the largest market for Australian wool, worth $1.4 billion in 2008. We continued to pursue greater access for Australian agricultural products, contributing to finalising several export protocols. The department assisted Australian companies involved in commercial disputes in China.

FIGURE 6. Australia’s trade in goods and services with China

FIGURE 6. Australia’s trade in goods and services with China

The department facilitated the fourth Australia–China Business Council (ACBC) Canberra Networking Day at Parliament House in March 2009. Ministers and senior officials discussed with ACBC members key priorities in Australia’s policy approach to China, and future prospects for the business relationship in the context of the global economic crisis.

The department supported the work of the Australia–China Council in building understanding in China of contemporary Australia’s scientific, technological and educational outlook (see sub-output 3.1.2).


The department supported Australia’s economic and trade interests in Taiwan. In 2008, Australia’s exports to Taiwan reached $8.7 billion, making Taiwan our ninth-largest export market.

We led Australia’s delegation to the 13th round of the annual bilateral economic consultations, which contributed to advancing our trade interests in energy and resources, investment, science and technology, and education. The department supported separate talks with Taiwan on energy and minerals, electronics, and agriculture, and assisted in the signing of a memorandum of understanding (MOU) on cooperation in industrial property.

We conducted an active and successful public diplomacy program focused on promoting Australian expertise in science, technology and the arts, including through sponsoring visits by high-profile Australians in these fields.

FIGURE 7. Australia’s trade in goods and services with Taiwan

FIGURE 7. Australia’s trade in goods and services with Taiwan

Hong Kong

The department worked closely with the Australian business community to advance our commercial interests in Hong Kong, which remains a premier business base in southern China and a major source of investment. In 2008, exports to Hong Kong reached $4.7 billion and two-way trade was $7.9 billion.

A highlight was the conclusion of a bilateral MOU on cooperation in wine-related business, signed by the Minister for Agriculture, Fisheries and Forestry, Mr Tony Burke, on behalf of Australia during a visit to Hong Kong in April. The MOU will help lift the profile of Australian wine in Hong Kong and boost Australia’s share of the Hong Kong wine market.


We continued to support Australia’s commercial and other interests in Macau through the regular consular visits and community outreach programs conducted by the Hong Kong Consulate-General.

Republic of Korea (ROK)

The department contributed to strengthening our bilateral relationship with the ROK, building on our shared values, substantial and complementary economic ties and common strategic interests.

The department led a whole-of-government effort towards closer bilateral, regional and multilateral cooperation with the ROK, resulting in a joint statement and action plan on enhanced global and security cooperation announced by the Prime Minister, Mr Rudd and the ROK President, Mr Lee Myung-bak, in Canberra on 5 March 2009. Specific areas of cooperation include law enforcement, border security, counter-terrorism, disarmament and non-proliferation, defence and disaster response.

The department continued to promote the benefits of a comprehensive free trade agreement (FTA), contributing to the agreement announced by the Prime Minister, Mr Rudd, and the President, Mr Lee, to begin FTA negotiations. The Minister for Trade, Mr Crean, and the ROK Trade Minister, Mr Kim Jong-hoon, launched the first round of FTA negotiations during the fifth Australia-Korea Ministerial Joint Trade and Economic Commission in Melbourne on 18 May 2009. The two trade ministers also discussed a broad range of bilateral, regional and international trade issues. Mr Crean sought the relaxation of measures affecting Australian horticulture exporters and investment (see sub-output 1.1.7).

In addition to supporting ministerial engagement on trade and economic issues, the department worked with other agencies and industry to support Australia’s expanding commercial interests in the ROK. To help Australia retain market share following the resumption by the ROK of US beef imports, the department cooperated with Meat and Livestock Australia and the Department of Agriculture, Fisheries and Forestry (DAFF) to promote the clean, safe image of Australian beef. We also worked closely with DAFF on a number of agricultural market access issues, and continued to support efforts by Australia’s LNG industry to increase sales to the ROK.

FIGURE 8. Australia’s trade in goods and services with the Republic of Korea

FIGURE 8. Australia’s trade in goods and services with the Republic of Korea

The ROK maintained its position as Australia’s third-largest export market. Australian exports to the ROK grew dramatically in 2008, increasing 32 per cent to $20.2 billion, due to the higher value of iron ore and coal sales, which accounted for almost half of merchandise exports. Services exports in 2008 were valued at $1.8 billion. The ROK was Australia’s seventh-largest source of visitor arrivals and third-largest source of overseas student enrolments.

The department supported the visit to Australia by the ROK Minister for Foreign Affairs and Trade, Mr Yu Myung-hwan, in January 2009 for talks with Mr Smith. Under the Special Visits Program we hosted a visit by the ruling ROK Grand National Party chair, Mr Park Hee-tae, and six other members of parliament. The visit was important in advancing our bilateral objectives and reinforcing the priority Australia places on its relationship with the ROK.

The department provided secretariat support to the Australia–Korea Foundation in its efforts to broaden and deepen relations with the ROK by enhancing mutual understanding and collaboration between the two countries (see sub-output 3.1.2).

Democratic People’s Republic of Korea (DPRK)

The department continued to work closely with the United States, Japan, the ROK and other countries in support of international efforts to find a peaceful resolution to the DPRK nuclear issue. The Government condemned both the DPRK’s launch in April 2009 of a long-range ballistic missile and its apparent underground nuclear test in May 2009. We urged UN Security Council members to respond strongly to the nuclear test and welcomed the Council’s unanimous adoption on 12 June 2009 of Resolution 1874 condemning the test and strengthening sanctions against the DPRK.

We coordinated whole-of-government action to implement Australia’s obligations under Resolution 1874, as well as continuing implementation of the earlier Resolution 1718 passed in response to the DPRK’s 2006 missile test. Australia also maintained autonomous sanctions comprising restrictions on travel to Australia by DPRK nationals, a ban on port entry by DPRK-flagged ships and financial sanctions against 12 entities and one individual linked to the DPRK’s weapons of mass destruction (WMD) programs.

We engaged the DPRK directly to urge it to abandon its nuclear weapons program, including during visits to Pyongyang by Australia’s non-resident Ambassador (based in Seoul) in August 2008, March 2009 and June 2009. These delegations also urged the DPRK to work to improve relations with Japan and the ROK, and raised Australia’s concerns about the DPRK’s human rights record.

While bilateral development assistance to the DPRK remained suspended, Australia continued to provide humanitarian assistance, without linkage to political considerations, for the North Korean people through UN agencies and the Red Cross. The value of this assistance totalled $6.75 million in 2008–09.

Our work in support of the Six-Party Talks included consultations with its members on possible future regional security mechanisms. With the breakdown of the talks, the prospects of any mechanism developing soon are low.


Photo - See caption below for description
Her Majesty Empress Michiko (of Japan) views the Emily Kame Kngwarreye exhibition accompanied by Australian Ambassador to Japan, Mr Murray McLean OAM, the Deputy Director of the National Art Center, Tokyo, Mr Osamu Fukunaga and Australian Embassy interpreter, Mr Kazuyuki Hirasawa, in Tokyo, July 2008.
Photo: The Yomiuri Shimbun
Enlarge image :: Photo gallery

We continued to support Australia’s expanding relationship with Mongolia. The opening of Mongolia’s Embassy in Canberra in October 2008 enabled closer engagement. We worked with industry in support of Australian commercial interests in Mongolia, particularly in the resources and energy sector.


The department will work with North Asian partners to promote regional stability and Australia’s economic interests.

We will strengthen Australia’s strategic engagement in the North Asian region, building on existing joint cooperative arrangements and bilateral dialogues. The department will engage these governments on major international priorities for Australia, such as climate change, global financial governance, regional architecture, nuclear non-proliferation and whaling.

The department will promote Australia’s business interests in these important markets, which continue to be affected by the global economic crisis. The department will pursue a successful outcome to free trade agreement negotiations with China, Japan and the ROK.

We will maintain close engagement with regional partners and the United States and fully implement relevant United Nations Security Council resolutions in order to help encourage the DPRK to return to pursuing a negotiated settlement of the nuclear issue.


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