After establishing diplomatic relations with the People's Republic of China in 1972, Australia established an embassy in Beijing in 1973.
The Australia-China bilateral relationship is based on strong economic and trade complementarities, a comprehensive program of high-level visits and wide-ranging cooperation. In 2014, the Australian Prime Minister and Chinese President agreed to describe the relationship as a "comprehensive strategic partnership".
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 Australia and China are committed to constructively managing differences if and when they arise. Australia adheres to its one-China policy, which means it does not recognize Taiwan as a country. We maintain unofficial contacts with Taiwan promoting economic, trade and cultural interests.
Australia's growing diplomatic network in China includes the embassy in Beijing and consulates in Shanghai, Guangzhou, Chengdu and Hong Kong, with a new consulate planned for Shenyang in 2018. There are also 11 Austrade offices across greater China, assisting Australian businesses to enter markets and promote Australia as an investment, tourism and education destination. Australian state governments are represented in China's leading commercial centres. Australia and China share around 100 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. The apex of this structure is the annual leaders' meeting between our Prime Minister and the Chinese Premier. Other dialogues cover bilateral, regional and global issues, including foreign and strategic relations, trade and economic cooperation, international security, human rights, law enforcement, development cooperation, climate change and consular matters.
Significant developments in the bilateral relationship are often announced in joint statements after leaders' meetings or in speeches by Australian Prime Ministers, including:
Our international security engagement with China aims to improve mutual understanding, foster open communication and enhance cooperation. 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.
Law enforcement and related national security concerns, including on cyber issues and counter-terrorism, is a growing area of bilateral engagement as our level of economic and people-to-people exchange expands. The ministerial and officials dialogues on these issues include a High-Level Security Dialogue with the Chinese Communist Party's Central Commission for Political and Legal Affairs, first held in April 2017.
Australia's approach to managing differences on human rights in China aims to be constructive and is based on dialogue. Australia raises a wide range of issues with China including freedom of expression, freedom of religion, treatment of political prisoners and ethnic minorities, Tibet, torture, the death penalty, women's and children's rights, and the rights of legal practitioners and civil rights activists. 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.
Australia has largely phased out bilateral aid to China. A small number of ongoing projects provide targeted assistance, including a human rights technical cooperation program and a program helping to strengthen the health system in the Tibet Autonomous Region. In recognition of China's growing role as an aid donor, Australia and China signed a Memorandum of Understanding (MoU) on development cooperation in 2013, which was then renewed in 2017. The MoU facilitates Australia and China cooperating on shared development objectives on issues of regional or global importance. The first project under the MoU, targeting malaria in Papua New Guinea, began in 2016.
Climate change is an emerging area of cooperation between Australia and China. We have a Bilateral Climate Change Partnership initiated by a 2004 MOU and enhanced by a 2014 MOU, which provides for an annual Ministerial Dialogue and practical, collaborative projects in areas of mutual interest.
Trade and Investment
China is Australia's largest two-way trading partner in goods and services (valued at $155.2 billion in 2016, up 3.7 per cent on the previous year). China is our largest export market ($93 billion in 2016) and our largest source of imports ($62.1 billion in 2016). The Government is pursuing a number of initiatives to strengthen and diversify this relationship.
The China-Australia Free Trade Agreement (ChAFTA) entered into force on 20 December 2015. The Agreement will enhance the growing trade and investment relationship between our highly complementary economies. It will ensure the competitiveness of Australia's agricultural and manufacturing industries, protect and ensure the competitiveness of our services providers and attract greater investment in Australia. Over 86 per cent of the value of Australia's goods exports to China enter duty free following ChAFTA's entry into force, rising to 96 per cent when ChAFTA is fully implemented. Australian services providers benefit from new access to China's significant and growing services sector.
The Government has been promoting its open investment regime and Foreign Investment Review Board process, which continues to attract Chinese investors. The stock of Chinese direct investment in Australia has grown in recent years reaching $41.9 billion in 2016 (our fifth largest direct investor). The majority of investment has been in resources but is now moving into agriculture, tourism and infrastructure.
Increasing numbers of Australian businesses are entering the Chinese market with great success. However — like all cross border commercial activities — the benefits of doing business in China are coupled with considerable risks. The 'Doing Business in China' initiative continues to inform Australian companies about how to manage the risks and offers best-practice guidelines to dispute resolution.
Chinese business visitors will benefit from the increased flexibility offered by a new three-year multiple entry visitor visa, which was announced by the Government in April 2015. Australia commenced a 10 year validity visitor visa trial for eligible applicants in China in late 2016.
Australians are increasingly purchasing products from China through online shopping sites. If you buy from an online seller based overseas, you should be aware that you may experience practical difficulties in obtaining a remedy from them. Refer to information provided by the Australian Competition and Consumer Commission (ACCC) regarding shopping online.
In November 2014 during President Xi Jinping's visit to Australia, the Bank of China (Sydney branch) was designated as Australia's official RMB clearing bank and was subsequently launched in February 2015. It was also announced during the President's visit that Australia would receive a RMB 50 billion RMB Qualified Foreign Institutional Investor (RQFII) allocation for Australia's financial institutions to be able to invest in Chinese portfolio assets. In April 2015, the People's Bank of China and the Reserve Bank of Australia's renewed their bilateral swap agreement, which can be activated by either party, and allows for the exchange of local currencies between the two central banks of up to A$40 billion or RMB 200 billion. Each of these announcements should help support trade and investment and continue to enhance financial cooperation between our two countries.
Information on doing business and opportunities in China
Community and cultural links continue to develop strongly and play a vital role in the Australia-China relationship. Chinese migration started in the middle of the nineteenth century and Chinese is now the second most spoken language in Australia after English. Chinese Australians have contributed significantly to the development of Australia and also promote people-to-people links with China. In addition to immigration, education, trade and tourism bolster these links.
Australia is one of the most popular destinations for Chinese students wishing to study overseas. China is Australia's largest source of overseas students. In 2016 more than 157,000 Chinese students studied in Australia, with the number of enrolments by Chinese students growing more than 15 per cent over last year.
In the other direction, China is a key destination for the New Colombo Plan, encouraging increased flows of students between our countries. The initiative will help to lift knowledge of China in Australia and strengthen people-to-people and institutional relationships, through study and internships undertaken by Australian undergraduate students.
China is Australia's highest spending inbound tourism market and our second largest market by arrivals after New Zealand. In 2016, there were around 1.2 million visits to Australia from Chinese nationals, both contributing to the Australian economy and increasing understanding about Australia in China.
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. The ACC was established by the Government in 1978 to foster people-to-people relations between Australia and China and celebrates its 40th anniversary in 2018.
In 2014, Australia and China established a 1.5 track leadership forum, the Australia-China High-Level Dialogue (HLD). The HLD aims to enhance mutual understanding by bringing together senior Australian and Chinese government representatives with business, academic, and social leaders to discuss key issues impacting on the relationship. These can include political and strategic issues, economic policies, and social and cultural developments. Following the inaugural HLD in December 2014 in Beijing, the dialogue was held for the third time in November 2016 in Beijing. Australia's delegation was led by the Hon Peter Costello AC.
High-level visits and meetings
Recent high-level engagement includes:
In May 2017, Trade and Investment Minister Steven Ciobo attended the Belt and Road Forum in Beijing.
In April 2017, Foreign Minister Julie Bishop and Attorney General George Brandis held bilateral meetings with Politburo Committee member Meng Jianzhu in Canberra to launch the inaugural High-Level Security Dialogue.
In March 2017, Prime Minister Malcolm Turnbull hosted Premier Li Keqiang for the annual leaders meeting, held in Canberra.
In February 2017, Foreign Minister Julie Bishop and Chinese Foreign Minister Wang Yi held the fourth Foreign and Strategic Dialogue in Canberra.
In September 2016, Prime Minister Malcolm Turnbull attended the Eleventh East Asia Summit in Vientiane, Laos, where he met Premier Li for the annual leaders meeting.
In November 2016, the Hon Peter Costello AC led Australia's delegation to the third Australia-China High-Level Dialogue in Beijing.
In September 2016, Prime Minister Malcolm Turnbull met with President Xi on the margins of the G20, in Hangzhou, China.
In April 2016, Prime Minister Malcolm Turnbull held bilateral meetings with President Xi Jinping and Premier Li Keqiang and hosted a gala lunch for Australia Week in China 2016. Trade and Investment Minister Steven Ciobo led Australia Week in China 2016 — Australia's largest ever business mission. Other attendees included Tourism and International Education Minister Richard Colbeck, Special Trade Envoy Andrew Robb and state premiers and chief ministers.
In February 2016, Foreign Minister Julie Bishop and Chinese Foreign Minister Wang Yi held the third Foreign and Strategic Dialogue in Beijing.
In November 2015, Prime Minister Malcolm Turnbull attended the Tenth East Asia Summit in Kuala Lumpur, Malaysia, when he met Premier Li for the annual leaders meeting.
In November 2015, the Hon Peter Costello AC co-chaired the High-Level Dialogue with Mr Li Zhaoxing, Honorary President of the Chinese People's Institute of Foreign Affairs, in Sydney.
In August 2015, Trade and Investment Minister Andrew Robb led a senior business delegation to China to pursue opportunities created by ChAFTA.
In August 2015, Chairman Xu Shaoshi of China's National Development and Reform Commission visited Australia for the second Strategic Economic Dialogue.
In June 2015, Chinese Commerce Minister Gao Hucheng visited Australia to sign the China-Australia Free Trade Agreement (ChAFTA).
In November 2014, Chinese President Xi Jinping visited Australia.