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People's Republic of China country brief

Bilateral relations

The bilateral relationship continues to grow in breadth and depth. It is soundly based on strong economic and trade complementarities and assisted by a comprehensive program of high-level visits and other activities.

In April 2013, Australian and Chinese leaders committed to new consultative arrangements to guide the future of the relationship. These included annual leaders’-level meetings, as well as annual ministerial-level meetings on foreign, strategic and economic issues.

Australia and China have a growing range of common interests, with increasing collaboration in multilateral and regional forums. Significantly, Australia will chair the G20 in 2014 and China will chair APEC in the same year.

Our bilateral political engagement is extensive, though both sides acknowledge that Australia and China have different histories, societies and political systems, as well as differences of view on some important issues. Both are committed to managing differences when they arise constructively and on the basis of mutual respect. Australia adheres to its one-China policy, which means it does not recognize Taiwan as a country. We maintain unofficial contacts with Taiwan primarily to promote our legitimate economic, trade and cultural interests.

Australia and China concluded a joint statement on the bilateral relationship during then Vice-Premier Li Keqiang's visit to Australia in October 2009. The joint statement reaffirmed the two sides' willingness to enhance cooperation in various fields, and promote the expansion of the relationship. China and Australia share important common interests in promoting peace and stability in the Asia-Pacific region, and in the joint statement the two sides agreed to strengthen coordination in the United Nations, the G20, APEC, the East Asia Summit, the Pacific Islands Forum and other multilateral mechanisms and institutions. The joint statement also reaffirmed Australia's and China's commitment to open trade and investment policies, and to advancing economic cooperation.

Australia's growing diplomatic network in China is one of our most extensive. It includes the embassy in Beijing and consulates in Shanghai, Guangzhou, Chengdu and Hong Kong Australian state governments are also widely represented in China's leading commercial centers. There are over 80 sister-state/province and sister-city relationships.

The breadth of the bilateral relationship is also demonstrated by the range of consultation mechanisms that Australia and China have established to advance cooperation and manage differences. Dialogues cover bilateral, regional and global issues, including trade and economic cooperation resources, aid, defence, regional security, disarmament, human rights, climate change and consular matters.

Our defence engagement with China aims to improve mutual understanding, foster open communication, and to enhance cooperation. Over the past few years, we have strengthened our defence relationship with China through senior-level dialogue, educational exchanges, reciprocal naval ship visits, and humanitarian assistance and disaster relief exercises

Our approach to managing differences on human rights in China aims at being constructive and is based on dialogue. The Australia-China Human Rights Dialogue is an important forum for frank exchanges on human rights and for identifying areas where Australia can help China implement international human rights standards, including through our human rights technical cooperation program. The most recent round of our bilateral Human Rights Dialogue took place in Canberra in July 2012. We raised a wide range of issues including freedom of expression, freedom of religion, treatment of political prisoners and ethnic minorities, Tibet, torture, the death penalty, re-education through labour, women's and children's rights, and the rights of legal practitioners and civil rights activists.

Australia recognizes that China has made progress over the past 30 years and that the Chinese people enjoy a greater degree of personal freedom than before, but our views on human rights still differ. The Chinese also acknowledge these differences, and that there are continuing human rights failings in China that need to be addressed.

Australia also regularly expresses its concerns to China about human rights in Tibet. The Australian Government has called on the Chinese Government and the Dalai Lama's representatives to resume substantive dialogue and to work towards an agreed outcome. The Dalai Lama has visited Australia several times in his capacity as a spiritual leader and Nobel Peace Prize Laureate.

People-to-people links and cultural links are developing strongly and play a vital role in the Australia-China relationship. The Chinese community in Australia is an important part of our people-to-people links with China, and high growth in tourism and education has bolstered these links. China is our second largest source of visitor arrivals (626,000 arrivals in 2012). Australia is one of the most popular destinations for Chinese students wishing to study overseas (largest source of overseas student enrolments with 149,758 in 2012).  Diverse cultural activities are raising the profile of Australia, encouraging tourism and business, and fostering cultural ties between the countries.

Australia-China engagement in education, science, business and culture brings significant economic, social and cultural dividends to both countries and adds value to the bilateral relationship. The Australia-China Council (ACC) promotes such engagement. ACC was established by the Australian Government in 1978 to foster people-to-people relations between Australia and China. The function of the Council is to make recommendations to the Australian Government through the Minister for Foreign Affairs on strengthening the Australia-China relationship in ways that support Australia's foreign and trade policy interests. The Council's core activities are:

  1. Providing policy advice to the government, and promoting bilateral relations among its network of stakeholders in the strategic priority areas of Economics and Trade, Society and Culture and Education and Science
  2. Supporting and funding sustainable, long-term and high-impact projects that directly contribute to the strengthening of Australia-China relations and which support the Government's foreign and trade policy objectives
  3. Supporting a network of 30 Australian Studies Centres located in leading Chinese metropolitan and regional universities through the Australian Studies in China program. BHP Billiton Chair of Australian Studies at Peking University and the new Foundation for Australian Studies in China — a unique partnership between government, corporate and university sectors to advance Australian studies and education in China.

40th Anniversary of Diplomatic Relations between Australia and China

On 21 December 2012, Australia and China marked 40 years of diplomatic relations. The signing of the Joint Communiqué establishing diplomatic relations in 1972 marked a significant turning point in the bilateral relationship, paving the way for the comprehensive, constructive and cooperative relationship we have today.

A range of events and initiatives celebrating the anniversary were held over the course of the year. These were hosted by business organizations, cultural and sporting groups, government departments, universities and youth and media organizations from both countries. The Australian Prime Minister hosted a gala dinner at Parliament House, Canberra on 12 December and the Chinese People's Institute for Foreign Affairs hosted a commemorative dinner in Beijing on 14 December.

Australia China Forum

The Australia-China Forum was established through a Memorandum of Understanding signed on 7 April 2011. The aim of the Forum is to enhance mutual understanding between Australia and China by bringing together some 30 Australian and Chinese government representatives and private citizens with a deep knowledge of the bilateral relationship, to discuss and debate key issues impacting on the relationship. This can include political and strategic issues, economic policies, social and cultural developments.

Organizing institutions for the Forum are, on the Australian side, the Centre on China in the World at the Australian National University (ANU) and, on the Chinese side, the Chinese People's Institute of Foreign Affairs (CPIFA). The Forum is a one and a half-day event, held once a year in Australia and China alternately. The inaugural Forum was held in 2011 at the ANU in Canberra. CPIFA hosted the second meeting in 2012 in Beijing. The third meeting is expected to be held in Australia.

Economic and Trade Relations

The bilateral economic and trade relationship continues to expand. China is now Australia's largest two-way trading partner in goods and services (valued at A$125.1 billion in 2012), our largest export destination (A$78.7 billion in 2012), and our largest source of imports (A$46.3 billion in 2012). Resources accounted for almost 87 per cent of our merchandise exports to China. The prospects for continued growth in our trade relations are good.

Australia's services exports to China, valued at A$5.7 billion in 2012, are dominated by educational and recreational travel. China is Australia's largest source of overseas students, with 118,832 students studying in Australia in 2012.

China's increasing middle class and urbanized population — whose income is on average three times that of rural areas — is demanding more sophisticated services, providing opportunities to diversify our trade relationship and to take advantage of Australia's services strengths. The Australia-China 2.0 trade mission in August 2011 recognized the opportunities to further develop bilateral trade in services. A bilateral Services Sector Promotion Forum was established in 2012 and will build on China's interest in our services expertise.

China's new middle class is also beginning to move away from traditional staple foods and towards higher protein foods such as beef, lamb and premium horticultural products. There are strong prospects for further cooperation between Australia and China in the agriculture sector.

Continued population growth and rising affluence, particularly in our own region, has made food security a priority for many governments. With this in mind, Australia and China undertook a joint study on how we can cooperate in agricultural investment and technology to help address global food security concerns. This was the first time the Australian and Chinese governments had worked jointly on such a report, reflecting a shared belief about the importance of food security. The joint study was released in Australia and China on 20 December 2012.

Australia's foreign investment policies are welcoming and transparent. China has been ranked in the top three sources of proposed investment (behind the US and UK) for the past three consecutive years. China's direct investment in Australia reached A$16.7 billion in 2012.

Australian FDI in China remains at low levels (2.3 per cent of Australia's total FDI in 2012). However, it has also increased significantly to reach A$8.4 billion in 2012 (A$847 million in 2005).

In April 2013, Australia and China announced the start of direct trading between the Australian dollar and the Chinese renminbi (RMB), making it easier for both large and small Australian businesses to buy and sell into the Chinese market, and encouraging greater two-way investment.

The Australia-China Free Trade Agreement negotiations Australia-China Free Trade Agreement negotiations commenced in May 2005. The last formal negotiating round, the 19th was held on 4-6 June 2013. Australia looks forward to concluding a high-quality FTA with China which serves Australia's trade and investment interests.

While Australia’s growing business and consumer links with China are overwhelmingly positive, in recent years increased activity has resulted in higher numbers of commercial disputes. In response, in April 2013, working in partnership with peak industry bodies, the Australian Government launched the ‘Doing Business in China’ commercial disputes resolution initiative. The initiative informs Australian businesses and individuals of the opportunities, but also the risks, of engaging in business in China, and how best to manage them.

To further enhance cooperation, in April 2013, the Australian Government signed a Memorandum of Understanding with the Government of the Guangdong Province of China establishing the Australia-Guangdong Business Cooperation Council. Guangdong was chosen for its’ deep economic links with Australia and the Council aims to deepen Australia-China economic cooperation through enhanced business sector dialogue. There are approximately ten business representatives from each side who sit on the Council, all of whom have substantial interests in Australia-Guangdong bilateral trade and investment. The inaugural meeting of the Council will be held in late 2013.

On 27 August 2013, the Australian Government announced the launch of the China Country Strategy. This country strategy takes forward the objective of the Australia in the Asian Century White Paper: for Australia to build stronger and more comprehensive relationships with key countries in the region, in this instance China. The strategy identifies opportunities for community, business and government to participate in and contribute to deepening our engagement with China.

Updated September 2013