People's Republic of China country brief

Bilateral relations

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

In April 2013 Prime Minister Gillard (accompanied by Foreign Minister Carr, Trade Minister Emerson and Minister for Employment and Workplace Relations Shorten) visited China and in meetings with Chinese leaders agreed to establish a strategic partnership that sets up new bilateral architecture to guide the future of the relationship.

Our bilateral political engagement is extensive, though both sides acknowledge that Australia and China have different histories, different societies and different political systems, as well as differences of view on some important issues. Australia and China 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 recognise Taiwan as a country. We maintain unofficial contacts with Taiwan primarily to promote our legitimate economic, trade and cultural interests there.

Australia and China concluded a joint statement on the bilateral relationship during Vice-Premier Li Keqiang's visit 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 and Hong Kong, with Chengdu to open in 2013. The Australian Government has also committed to opening a further consulate, in Shenyang, at a future time.  Australian state governments are also widely represented in China's leading commercial centres. 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. The two sides maintain a number of bilateral dialogues to advance cooperation and manage differences. Dialogues cover bilateral, regional and global issues, including trade and economic cooperation, the global economic crisis, 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. In April 2013, the Prime Minister announced a strengthening of our bilateral defence links with China through increased defence cooperation between the Australian Defence Force and the People’s Liberation Army to build trust, confidence and transparency for the future. 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. Indicative of the importance both countries place on bilateral defence ties, in December 2012 the Chief of the Defence Force travelled to Beijing to meet his counterpart, General Fang Fenghui, Chief of the General Staff of the People's Liberation Army, to conduct the 15th annual Defence Strategic Dialogue. The Dialogue agreed a robust forward program of defence engagement including practical exercises, strategic policy discourse, maritime engagement, and opportunities to deepen people-to-people links at all levels.

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. The next round of talks is planned to be held in 2013.

Australia recognises 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. In 2011, Chinese visitor arrivals surpassed 540,000. Australia is one of the most popular destinations for Chinese students wishing to study overseas. 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 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 organisations, cultural and sporting groups, government departments, universities and youth and media organisations from both countries. The highlight of the year were gala dinners hosted by the Prime Minister at Parliament House, Canberra on 12 December and another hosted by the Chinese People's Institute for Foreign Affairs on 14 December in Beijing.

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, and to promote the sound and steady development of our bilateral relationship.  It does this 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.

Organising 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 alternatively. The inaugural Forum was held on 2-3 November 2011 at the ANU in Canberra. CPIFA hosted the second meeting on 15-16 November 2012 in Beijing.

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$127.8 billion in 2011-12 FY), our largest source of merchandise export destination (A$76.8 billion in 2011-12 FY), and our largest source of merchandise imports (A$43.4 billion in 2011-12 FY). Resources accounted for almost 90 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 2011-12 FY, are dominated by educational and recreational travel. China is Australia's largest source of overseas students, with more than 136,372 students studying in Australia on a student visa in August 2012.

China's increasing middle class and urbanised 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 take advantage of Australia's services strengths.  The Australia-China 2.0 trade mission led by Trade Minister Emerson in August 2011 recognised the opportunities further to 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.

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

The joint study was led for Australia by the Department of Foreign Affairs and Trade, with input from relevant federal agencies (including the Department of Agriculture, Fisheries and Forestry), State and Territory governments and the private sector.  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$13.4 billion in 2011.

Australian FDI in China remains at low levels (1.9 per cent of Australia's total FDI in 2011).  However, it has also increased significantly to reach A$6.4 billion in 2011 (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 Australian businesses, large and small, to buy and sell into the Chinese market, and encouraging greater two-way investment.

The Australia-China Free Trade Agreement negotiations commenced in May 2005.  The last formal negotiating round, the 18th was held on 19-21 March 2012.  Australia would welcome a high-quality FTA with China which serves Australia's trade and investment interests.

Updated January 2013