Why China Matters Jennifer Macklin - Deputy Leader of the Opposition Shadow Minister for Education, Employment, Training and Science

Speech

Transcript - Mitchell Galleries, State Library Sydney - 19 February 2003

Check Against Delivery

One of the great things about the Australian Labor Party is that we are steeped in history.

Australia's oldest political party and one of the world's longest-lived as well.

Some have said we might have been better served to have had a little more success and a little less history.

But whatever view you take of that we come to few matters without experience and a record.

In the case of China we approach this great nation and its relations with Australia with more than just a passing acquaintance.

The story of Gough Whitlam's mission to China in 1971 is at the centre of modern Australian politics and foreign policy.

And at the centre of that story is our host tonight, Professor Stephen Fitzgerald.

Gough's mission almost 32 years ago marked the start of a truly Australian foreign policy.

His message was clear and simple. Australia was mature and strong-minded enough to maintain its traditional and enduring relationships and at the same time build new and different relationships in its own region, in its own neighbourhood.

Labor is proud of the foreign policy achievements of this country in the period since that visit by Whitlam in 1971.

The mission I will lead to China next week is designed to build on those initiatives, broaden them and maintain their vitality.

Despite this context and the significance of our relations with China, it is legitimate to ask why, at this time, with the threat of war over the disarmament of Iraq, Labor is putting such effort into building strong ties with the Chinese government.

The simple answer is security and jobs.

China is already an economic giant in our region and is a central force in the Asia Pacific.

China is now Australia's third largest trading partner after the United States and Japan.

Trade between our two countries has been growing at a phenomenal rate. Between 1995 and 2001 total Australian exports to China grew at an average annual rate of 16 per cent. Last financial year total trade in goods and services between our two countries reached more than $19 billion. The massive North West Shelf liquid natural gas project is estimated to be worth up to $25 billion to Australia over the next 25 years, and there should be many more such projects in the future.

Though our relationship so far has been driven largely by commerce, security issues are becoming increasingly important. In the face of the global terrorist threat nations must work together to achieve security and peace.

China is an emerging global power and its views and interests are integral to efforts to achieve security within the Asia Pacific region.

A strong, mature and close relationship with China is critical to Australia's future.

It was to ensure that the great progress made in the past 32 years is maintained that Simon Crean travelled to China last year to meet with Zhu Rongji. He went there to set the foundation for a new, closer economic and political partnership between Australia and China.

In his discussions with the Premier and senior Chinese Party officials Simon Crean set out what Labor intends to do to build a strong bilateral relationship with China, including:

• Setting the foundations for a future Australia-China treaty,
• Identifying and expanding areas where the two economies complement one another,
• Fostering a closer dialogue between national leaders; and
• Providing a vehicle for closer bilateral relations.

The delegation of senior Labor members I am leading to China next week will be the first of a series of exchanges and seminars to develop a deeper bilateral relationship between our two countries.

Labor wants stronger and deeper political, economic and cultural ties with China because good relations with China are important for Australia's long-term economic and security interests.

Timing of visit

Next week's visit could not be more timely.

Not least because of the emergence of a new generation of leadership in the Chinese Communist Party, headed by General Secretary Hu Jintao.

These are the leaders who have been set the awesome task of taking China forward through one of the most spectacular and significant periods of growth and change in world history. China's economic potential is much talked-about, but Hu Jintao and his colleagues have the job of making it a reality. The challenges they face are enormous and I will talk later of the areas in which Australia could make a useful contribution.

Next week's visit is a critical opportunity to build upon relations between China's new leadership and Australia's alternative government.

The delegation's visit to China is taking place against a backdrop of mounting international uncertainty. The drive to disarm Iraq, nuclear tension on the Korean peninsula, the pervasive threat of terrorism – each poses a significant threat to regional and global peace and security.

The horrific Bali bombings, in which so many innocent people from across the world were killed and injured, including so many young Australians, have driven home to us all just how vulnerable we can be to terrorist attack.

As my colleague Kevin Rudd pointed out last week, Australia is possibly the most exposed Western nation in the world.

The Bali attack showed just how real is the threat posed by al Qaeda throughout South-East Asia.

Australia's involvement in both the War on Terror in Afghanistan and peacekeeping activities in East Timor - both supported strongly by Labor - has antagonised some people.

But the policies being pursued by the Howard Government regarding Iraq and regional security have only served to heighten the threat to Australian security.

Labor believes that the only way to achieve real peace and security isn't through going it alone, but by building close and supportive relationships within our region and internationally.

Our starting point is to seek security with our region, not from our region.

The global threat of terrorism requires an international response. The best protection we can have from such attacks is through collective security – nations working together closely and cooperatively in their security, policing and intelligence work to make sure they never happen again.

As the largest nation in the region China has a key role to play in helping to defuse the threat to regional stability and security by North Korea's nuclear rearmament program.

And the expanding economic ties between China and Taiwan - Taiwanese investments in China now worth about $US100 billion and include 50,000 enterprises on the mainland –hold the promise of a peaceful resolution to this difficult issue.

Of course the Australian Labor Party, which was at the forefront more than 30 years ago in advocating the One China policy, remains committed to that position, and we understand and appreciate the serious political issues surrounding the future of Taiwan.

China's importance for Australia

No-one doubts the importance of China, not just within the Asia-Pacific region but also on the global stage. A few basic facts tell the tale. China's economy is massive. Last year its GDP reached $US1.6 trillion and if its current average annual growth rate of 7.5 per cent is sustained, by 2020 it is likely to become the world's single largest economy.

While there are serious challenges confronting China in maintaining its pace of economic development, it is already a very significant trading partner for Australia.

A key aspect of the growth in trade between our two countries has been the complementary nature of our economies.

Australia is a major supplier of the raw materials – particularly iron ore, crude oil, copper and wool - China needs to fuel its expanding industries and the foodstuffs its citizens want.

For its part China is a major supplier of manufactured goods including clothing, footwear and electrical appliances and equipment to the Australian market.

But Australia's greatest potential export to China – services based on the skills and expertise of our people – remains largely untapped.

It is true that exports to China of education and tourism, among other services, are growing, despite the handicap of massive Howard Government funding cuts to education.

In my own electorate La Trobe University has become a significant exporter of education services to China.

In addition to the 400 Chinese students studying business, commerce, health, management, English and information technology at La Trobe's campuses here in Australia, another 3500 attend courses offered by the university in 25 cities across China and the Hong Kong Special Administrative Region.

But the growth of services exports to China has been hampered by barriers such as restrictions on the entry of foreigners into many service industries. That is why China's entry to the WTO is of such significance. It will bring China directly into negotiations aimed at liberalising the global trade in services so that Australians and others can participate in the growth and strengthening of the Chinese services sector.

For Australia the benefits will be two-fold. Not only are the potential earnings from services exports to China huge but, because they involve person-to-person contact, they help build the relationships and networks that deepen and strengthen ties between countries.

Social welfare expertise

One area of Australian expertise that could be of considerable value to China is in the provision of social welfare services.

A central task being undertaken by the Chinese government is the reform and privatisation of the state sector of the economy. Much of the growth of the Chinese economy is now driven by private and foreign business. Despite this, in 2001 China's 174,000 state-owned enterprises continued to comprise a large but financially weak proportion of the nation's industry.

The great challenge for the Chinese government in reshaping the state-owned enterprises sector is in dealing with the dual roles these businesses have fulfilled.

Their purpose has been not only to produce goods and services but also to provide job security and welfare support.

In its reform of state owned enterprises the Chinese government wants to separate these functions and establish an effective social welfare system.

Over many years Australia has developed a strong, highly targeted welfare system that includes unemployment assistance, retirement incomes and a national health program.

Regional development

The Chinese government has also attached great importance to development across China.

It has set itself the challenge of ensuring that all parts of the country share in the economic boom that has so far swept along the country's eastern seaboard.

In what has been described as one of the greatest mass migrations in history, more than 150 million people have left the rural hinterland seeking work in the booming cities along China's east coast.

The Chinese government has committed an enormous amount of money and effort to lift the level of economic activity in the central and western provinces.

Australia has experienced similar problems of concentrated economic growth.

Our country is vast but most activity is confined to pockets on the east and west coasts.

Australian governments have had to develop ways to ensure that the fruits of economic development are shared equally by all, such as through state grants and other mechanisms of fiscal equalisation. This hard-won expertise could be useful to China as it grapples with ways to share the benefits of economic growth across such a vast area and population.

Judicial system

Institutional and legal reform on the scale now contemplated in China is a huge and complex task.

Australia has a highly evolved legal system marked by the separation of powers between those who develop laws and those who enforce them. It is a system that serves to protect the rights of individuals in relation to the state.

This system is fundamental to the organisation of our society. It is also central to the effective operation of a market economy.

These legal and political institutions not only give private citizens and firms – both foreign and domestic – confidence in the legal and business environment but also help head off problems in the relationship between the state and individuals, such as arise in cases of moral hazard and corruption.

A federal Labor government will join in active dialogue on these issues with China and provide any assistance the Chinese government may request in helping to entrench the credible rule of law, including training and technical advice. Any experience Australia can bring to bear on this task will serve our own interests as well as those to which China is committed.

Our discussions in China will undoubtedly touch upon the issue of human rights.

Labor's position on these issues is well known. For instance, we have consistently urged the Chinese government to give international human rights organisations, humanitarian groups and independent journalists access to Tibet.

Labor believes that by establishing and continuing a dialogue on human rights we can not only raise individual human rights cases but can also contribute to the development and strengthening of legal frameworks that protect and promote human rights in our region and beyond.

2008 Olympics

Labor congratulates China in its success in securing the Olympic Games in Beijing in 2008. The Chinese government has already put enormous effort into ensuring these Games will be a high point in the history of the Olympic movement.

Massive construction projects are already well underway, as are the detailed logistical plans needed to host such a large and important event.

From our experience hosting the 2000 Olympics we know what a great commitment it is to stage the Games.

A federal Labor government would provide any assistance or expertise the Beijing authorities may find useful in helping prepare for the event.

(Though we may draw the line at giving away the secrets of our success in winning medals.)

Asia: Howard's low priority

When it came to office the Howard Government immediately set about disavowing the policy of engagement with Asia that the Hawke and Keating governments had pursued so purposefully.

What that has meant is a progressive disengagement from Asia and a retreat to more familiar and less challenging relationships with the United States and the United Kingdom.

This is no more evident than in the Foreign and Trade Policy White Paper Advancing the National Interest released by the government last week.

The Paper emphasises the fundamental importance of strengthening Australia's links with the United States, including the negotiation of a free trade agreement.

In the Paper Australia's regional relationships, including that with China, are viewed solely through the prism of United States interests in East Asia.

On defence and security issues we are to be the United States' deputy sheriff in Asia, and when it comes to trade and economic affairs we will be their deputy manager. So much for national independence.

John Howard has set up a false dichotomy between a strong relationship with the United States and engagement with Asia. It is not either/or. It can be, indeed it must be, both.

Australia is a close ally of the United States. We have not always agreed, but the strength of our relationship means the bond endures – a bond that was built on the security arrangements put in place by the Labor Party during the Pacific War.

Indeed, Gough Whitlam in that mission 32 years ago made it plain Labor supported, as it does today, the ANZUS alliance,

But as that visit demonstrated so dramatically, a strong, independent Australia, heavily enmeshed in Asia economically, politically and culturally, brings more to its alliance with the United States, not less.

Tragically for this country the Howard Government has dragged in the welcome mat and put up the "too busy" sign to many of our Asian neighbours.

This was demonstrated dramatically last year when the government scrapped the National Asian Languages and Studies Strategy for Australian Schools. The $30 million program was intended to build an understanding of Asian language and culture in future generations of Australians. What the government saved in axing the program Australia has paid for in the symbolic message it sends out to our neighbours, that we are not really interested in you.

The $5 billion cuts the Howard Government has imposed on higher education will also damage the level of Asian expertise in Australia. Our Asian experts are being poached overseas in growing numbers. For instance, La Trobe University researcher Meg Gurry predicts that by 2007 no university will offer teaching explicitly on India, Pakistan or Afghanistan. That cannot be good for our security.

In all his priorities John Howard has served to make Australia an outsider in our own region.

We are now paying a high national price for this policy folly.

Australians want a strong and significant role for their country in the region, because they know how important regional associations are for our own economic welfare and national security.

The Howard Government has no credible policy for engagement with Asia to sit alongside its drive for closer ties with the US.

The emergence of regional trade blocs in Europe and North America has fuelled uncertainty in East Asia about how best to proceed.

There are a number of different models for the liberalisation of regional trade under consideration by countries including China, Japan, South Korea and the ASEAN nations. One thing all these models have in common is that they do not involve Australia.

At a time when Australia should be pursuing options to expand trade with all our major trading partners the Howard Government is concentrating its efforts on a preferential Free Trade Agreement with the US.

Labor argues that a US Free Trade Agreement would be of comparatively limited economic benefit to Australia.

China's economic expansion has been matched by its growing stature as a regional and global power. As a permanent member of the United Nations Security Council China has a pivotal role in securing global peace and prosperity. Its recent accession to the World Trade Organisation reflects China's increasing stature in the international community of nations.

China has also emerged as the pre-eminent power in our region. It has developed strategic partnerships with most countries along its periphery, including Russia, South Korea, Japan, ASEAN. It has initiated free trade negotiations with ASEAN, and is deeply involved in the ASEAN Plus Three dialogue. Australia has a crucially important role to play with China in all these endeavours.

Labor's foreign policy approach

Labor believes that regional engagement is critical in achieving our foreign policy goals of security, prosperity and the creation of a just and secure world order.

As a nation we are historically steeped in the culture and traditions of the West. But geographically we are part of the Asia Pacific.

Though we have strong economic, political and cultural links with countries across the globe, Asia is integral to our future security and prosperity. It currently takes 53 per cent of our merchandise exports and is rapidly emerging as a major market for our services.

Asia holds enormous potential for economic growth, and Australia is uniquely placed to be a part of that future.

But Labor is concerned to build relations based on more than just commerce, important though that is.

To be both prosperous and secure Australia's relations within the region must include broad political and cultural interactions.

At a government level this means fostering educational and technical links, contributing to regional forums based on common interests and acting to bolster regional stability and security.

There is also great scope for encouraging personal and informal ties through sporting events, cultural exchanges, family ties and educational links.

My own experience has shown me the value of such ties. As a relatively sheltered 16-year-old girl from country Victoria I went to Japan as an exchange student for a year.

It was a fantastic experience that opened up the world and developed a fondness for my adopted home in East Asia that remains with me to this day.

I understand the challenges that Australia faces in building strong, meaningful relationships within Asia.

I know how much work and effort has gone in over the past 30 years to bring our relationship with China to the point where it is today. There are few who have done more in this regard than Professor Stephen Fitzgerald, and I thank him for the opportunity to speak with you tonight.

Our relationship with China in the past has not always been an easy one. At times our nations have differed and there will be differences in the future.

Australia will always have disagreements with China, given that our national security circumstances are different, our political traditions are different, just as our human rights records are different.

But there is also much we share in common and Labor is committed to establishing a framework for our relationship that will strengthen our shared interests and our common objectives both in the region and beyond.

Thank you.