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Australia has been covered by a dual insurance for the past decade—it has both enjoyed economic development driven by close economic cooperation with China and also been protected under the framework of the U.S.-Australian Alliance. Entering 2014， the China-Australia relationship became tense at one point because the Tony Abbott administration chose to offend China’s sovereignty by supporting Washington and its Japanese ally’s stance on territorial disputes.
Things may yet change， however. Australian Prime Minister Tony Abbott showed sincerity and a desire to strengthen Sino-Australian strategic partnership in various areas when he visited Beijing in early April.
Establishing an FtA
The most positive aspect of Abbott’s China tour was the consensus on accelerating a Free Trade Agreement （FTA） negotiation process. Initiated in 2005， bilateral negotiations on the FTA have lasted 19 rounds so far. If the deal is signed， it would be the first FTA between China and a major developed economy， giving Australian agricultural producers easier access to the enormous Chinese market， while opening opportunities to Chinese investors Down Under.
“Now it comes to the phase of making political decisions. At this phase， the ChinaAustralia FTA can be inked at any minute once the leaders set their foot down，” Wang Zhenyu， a researcher on Asia-Pacific studies with Chinese Institute of International Studies （CIIS） said to Beijing Review. He explained that this is an arduous process because both sides are aggressively pursuing their own interests using a win-win approach.
Meeting with the visiting Australian Prime Minister in Beijing on April 11， Chinese President xi Jinping called on the two sides to speed up negotiations on a bilateral free trade deal， and expressed hope that Australia could offer good conditions for investment by Chinese enterprises in Australia. Abbott echoed that Australia is ready to work with China to accelerate talks for a free trade deal and welcomes Chinese enterprises to invest in Australia. The Australian Prime Minister promised in his electoral commitment last year that once he was chosen to lead the country， his government would end FTA negotiations with China within a year. In May， the 20th round of China-Australia negotiations will be held in Canberra.
Observers believed that investment is by far the biggest difference between the two sides in FTA negotiations. Abbott’s China tour seemed on track to break the bottleneck.
“The main issue for the FTA between China and Australia is inward investment from China and the conditions that might be placed on it，” Kerry Brown， Professor of Chinese Politics and Director of the China Studies Center at the University of Sydney， told Beijing Review.
“Frankly speaking， Australia has been alerted to Chinese investment in past years， especially in the agriculture and mining sectors. Besides， different interest groups in Australia hold different attitudes toward Chinese investment， so much so that the Australian Government has been in a difficult place to make relevant policy decisions，” said Wang. Comparing its investment arrangement with the United States， Australia is very discriminatory against investment from China. American investors can invest with a much higher amount in Australia in more areas， but when Chinese investment reaches a certain amount， it will be subject to a strict review process， he added.
With the goal of building a community with Asia and sharing development potential there， Australia has been expanding its economic cooperation with Asian nations. Previously， Abbott reached a basic agreement with Japan on its FTA on April 7， according to which Japanese automobile and Australian agricultural products can be sold to each other at cheaper prices. Japan is Australia’s second biggest trade partner in Asia. The two sides started FTA negotiations seven years ago. On April 8， Australia and South Korea signed a formal FTA during Abbott’s visit， ending their 88-month long FTA negotiations.
The economic complementarity between China and Australia will be higher than that between Japan and Australia. Australia’s trade volume with China exceeded that with Japan several years ago and became Australia’s No.1 trade partner. “China is one of the few economies that Australia would like to engage with greatest efforts，” said Wang. China is Australia’s largest trade partner and biggest export market， while Australia is Chinese enterprises’largest overseas investment destination country. According to statistics from the Chinese Ministry of Commerce， bilateral trade reached$136.44 billion in 2013， up 11.5 percent from 2012.
On the other hand， Australia is one of the key neighbors on which China’s development relies heavily， Wang stressed， hence， setting plans for an FTA in motion is a matter of necessity and urgency.
China and South Korea have the same interest in Australian agribusiness， so there will be potential overlap in that area， and the precedents that the South Korean deal might make will be useful， said Kerry Brown. But for the Chinese FTA， the issues are more complex because the bilateral trading and investment ties are more complex， he added. “So this is the reason why it will take more time to finalize， and also why it might have longer-term significance，”stressed Brown. If the FTA is signed， that will be one more developed country with which China has made such a pact， Wang said， pointing out that the FTA would be more meaningful in terms of quality and coverage and will add more momentum to the East Asia economic integration process now featuring the Regional Comprehensive Economic Partnership （RCEP） negotiation. The RCEP will include all 10 members of the Association of the Southeast Asian Nations and the six FTA partners—China， Japan， South Korea， India， New Zealand and Australia， in its initial stage. Conceived as a 21st century high-standard and comprehensive pact， the RCEP is expected to combine the next-generation trade and investment issues with East Asia’s traditional principles like comfortability， flexibility and eco-tech， Wang explained.
Besides， China will accumulate more experience in negotiating and practicing the high quality of the future China-Australia FTA， Wang added， This may to some extent make China more prepared for the Trans-Pacific Partnership free trade pact， in which Australia is a party.
Sincerity of cooperation
Unlike its stance on economic cooperation， Australia has shown less interest in improving political relations and strengthening mutual trust， which has enraged some Chinese observers. They criticized Australia’s tactic of making full use of advantage offered by both sides but refusing to pay.
Australia expressed sincerity in deepening a bilateral strategic partnership during Abbott’s China tour.
“It was a challenging visit， but Abbott managed to succeed in stressing the key issues—trade relations and the desire for both to have a peaceful， stable region for prosperity to grow，” said Brown.
Despite government shifts， Australia basically has tended toward building a “tripod” model as a national strategy during recent years. In such a stable structure， the country hopes to simultaneously develop its alliance with Washington， diplomatic independence and relationships with emerging Asian nations， especially China， to maximize its national interests. China’s vigorous economic development and growing global influence have attracted Australia to make active moves.
“The main ingredient lacking was any sense of a strong， distinctly Australian vision of where it wants China-Australia ties to go in the coming decade， when so many things are likely to change，”Brown included.
Wang pointed out that there are five factors that may influence the China-Australia relationship —the situation of the China-U.S. relationship， the security condition of East Asia， the development of bilateral economic cooperation， Australia’s performance of diplomatic independence and its tendency toward cultural superiority. Observers noticed that Australia’s stance on disputes between China and the United States and Japan， for example， is still a hot-button issue.
“Following the country’s tradition of U.S.-Australian alliance， the Abbott administration by far still follows U.S. steps，” Wang pointed out. In territorial disputes in East Asia， Abbott had expressed support to Japan， only because like Australia and South Korea， Japan is also an important link in the Washington-dominated Asia-Pacific security system， he said， which is not helpful to building a region with a new security concept. “That bias has been also harmful to the China-Australia strategic relationship， “Wang remarked.
Australia has strong alliances in Asia， and is increasingly an Asian power. This is something Australian leaders have long recognized， explained Brown. “On the whole， Australia seeks to be supportive of the U.S. position as the United States is its strongest and most important strategic ally，” he pointed out. “For this reason， it makes no final judgment on issues of sovereignty， and simply stresses the need for peaceful and patient negotiation between all parties involved.”
Brown attributed Australia’s stance to its national interest. “Australia has been for over half a century a country which has always stood at the side of the United States. There is no reason now to change this stance， though Australia has to think harder about the specific dynamics and nature of its relations with China.” He added，“At the moment， Australia figures into Chinese thinking mostly as a place to access important resources，” pointing out this is Australia’s challenge regarding China in the coming decade.
“Now that China and Australia are in a strategic relationship， China needn’t be too anxious about such a situation， or to act tit for tat in dealing with differences. It should treat the situation with a great power style and vision，” said Wang， pointing out that Australia’s attitude has been changing with the situation， albeit slowly. In the past years， Australia has made gestures to pursue more independent foreign policies， said Wang，“That change shall be encouraged while Australia should be reminded of its inappropriate acts.”
Things may yet change， however. Australian Prime Minister Tony Abbott showed sincerity and a desire to strengthen Sino-Australian strategic partnership in various areas when he visited Beijing in early April.
Establishing an FtA
The most positive aspect of Abbott’s China tour was the consensus on accelerating a Free Trade Agreement （FTA） negotiation process. Initiated in 2005， bilateral negotiations on the FTA have lasted 19 rounds so far. If the deal is signed， it would be the first FTA between China and a major developed economy， giving Australian agricultural producers easier access to the enormous Chinese market， while opening opportunities to Chinese investors Down Under.
“Now it comes to the phase of making political decisions. At this phase， the ChinaAustralia FTA can be inked at any minute once the leaders set their foot down，” Wang Zhenyu， a researcher on Asia-Pacific studies with Chinese Institute of International Studies （CIIS） said to Beijing Review. He explained that this is an arduous process because both sides are aggressively pursuing their own interests using a win-win approach.
Meeting with the visiting Australian Prime Minister in Beijing on April 11， Chinese President xi Jinping called on the two sides to speed up negotiations on a bilateral free trade deal， and expressed hope that Australia could offer good conditions for investment by Chinese enterprises in Australia. Abbott echoed that Australia is ready to work with China to accelerate talks for a free trade deal and welcomes Chinese enterprises to invest in Australia. The Australian Prime Minister promised in his electoral commitment last year that once he was chosen to lead the country， his government would end FTA negotiations with China within a year. In May， the 20th round of China-Australia negotiations will be held in Canberra.
Observers believed that investment is by far the biggest difference between the two sides in FTA negotiations. Abbott’s China tour seemed on track to break the bottleneck.
“The main issue for the FTA between China and Australia is inward investment from China and the conditions that might be placed on it，” Kerry Brown， Professor of Chinese Politics and Director of the China Studies Center at the University of Sydney， told Beijing Review.
“Frankly speaking， Australia has been alerted to Chinese investment in past years， especially in the agriculture and mining sectors. Besides， different interest groups in Australia hold different attitudes toward Chinese investment， so much so that the Australian Government has been in a difficult place to make relevant policy decisions，” said Wang. Comparing its investment arrangement with the United States， Australia is very discriminatory against investment from China. American investors can invest with a much higher amount in Australia in more areas， but when Chinese investment reaches a certain amount， it will be subject to a strict review process， he added.
With the goal of building a community with Asia and sharing development potential there， Australia has been expanding its economic cooperation with Asian nations. Previously， Abbott reached a basic agreement with Japan on its FTA on April 7， according to which Japanese automobile and Australian agricultural products can be sold to each other at cheaper prices. Japan is Australia’s second biggest trade partner in Asia. The two sides started FTA negotiations seven years ago. On April 8， Australia and South Korea signed a formal FTA during Abbott’s visit， ending their 88-month long FTA negotiations.
The economic complementarity between China and Australia will be higher than that between Japan and Australia. Australia’s trade volume with China exceeded that with Japan several years ago and became Australia’s No.1 trade partner. “China is one of the few economies that Australia would like to engage with greatest efforts，” said Wang. China is Australia’s largest trade partner and biggest export market， while Australia is Chinese enterprises’largest overseas investment destination country. According to statistics from the Chinese Ministry of Commerce， bilateral trade reached$136.44 billion in 2013， up 11.5 percent from 2012.
On the other hand， Australia is one of the key neighbors on which China’s development relies heavily， Wang stressed， hence， setting plans for an FTA in motion is a matter of necessity and urgency.
China and South Korea have the same interest in Australian agribusiness， so there will be potential overlap in that area， and the precedents that the South Korean deal might make will be useful， said Kerry Brown. But for the Chinese FTA， the issues are more complex because the bilateral trading and investment ties are more complex， he added. “So this is the reason why it will take more time to finalize， and also why it might have longer-term significance，”stressed Brown. If the FTA is signed， that will be one more developed country with which China has made such a pact， Wang said， pointing out that the FTA would be more meaningful in terms of quality and coverage and will add more momentum to the East Asia economic integration process now featuring the Regional Comprehensive Economic Partnership （RCEP） negotiation. The RCEP will include all 10 members of the Association of the Southeast Asian Nations and the six FTA partners—China， Japan， South Korea， India， New Zealand and Australia， in its initial stage. Conceived as a 21st century high-standard and comprehensive pact， the RCEP is expected to combine the next-generation trade and investment issues with East Asia’s traditional principles like comfortability， flexibility and eco-tech， Wang explained.
Besides， China will accumulate more experience in negotiating and practicing the high quality of the future China-Australia FTA， Wang added， This may to some extent make China more prepared for the Trans-Pacific Partnership free trade pact， in which Australia is a party.
Sincerity of cooperation
Unlike its stance on economic cooperation， Australia has shown less interest in improving political relations and strengthening mutual trust， which has enraged some Chinese observers. They criticized Australia’s tactic of making full use of advantage offered by both sides but refusing to pay.
Australia expressed sincerity in deepening a bilateral strategic partnership during Abbott’s China tour.
“It was a challenging visit， but Abbott managed to succeed in stressing the key issues—trade relations and the desire for both to have a peaceful， stable region for prosperity to grow，” said Brown.
Despite government shifts， Australia basically has tended toward building a “tripod” model as a national strategy during recent years. In such a stable structure， the country hopes to simultaneously develop its alliance with Washington， diplomatic independence and relationships with emerging Asian nations， especially China， to maximize its national interests. China’s vigorous economic development and growing global influence have attracted Australia to make active moves.
“The main ingredient lacking was any sense of a strong， distinctly Australian vision of where it wants China-Australia ties to go in the coming decade， when so many things are likely to change，”Brown included.
Wang pointed out that there are five factors that may influence the China-Australia relationship —the situation of the China-U.S. relationship， the security condition of East Asia， the development of bilateral economic cooperation， Australia’s performance of diplomatic independence and its tendency toward cultural superiority. Observers noticed that Australia’s stance on disputes between China and the United States and Japan， for example， is still a hot-button issue.
“Following the country’s tradition of U.S.-Australian alliance， the Abbott administration by far still follows U.S. steps，” Wang pointed out. In territorial disputes in East Asia， Abbott had expressed support to Japan， only because like Australia and South Korea， Japan is also an important link in the Washington-dominated Asia-Pacific security system， he said， which is not helpful to building a region with a new security concept. “That bias has been also harmful to the China-Australia strategic relationship， “Wang remarked.
Australia has strong alliances in Asia， and is increasingly an Asian power. This is something Australian leaders have long recognized， explained Brown. “On the whole， Australia seeks to be supportive of the U.S. position as the United States is its strongest and most important strategic ally，” he pointed out. “For this reason， it makes no final judgment on issues of sovereignty， and simply stresses the need for peaceful and patient negotiation between all parties involved.”
Brown attributed Australia’s stance to its national interest. “Australia has been for over half a century a country which has always stood at the side of the United States. There is no reason now to change this stance， though Australia has to think harder about the specific dynamics and nature of its relations with China.” He added，“At the moment， Australia figures into Chinese thinking mostly as a place to access important resources，” pointing out this is Australia’s challenge regarding China in the coming decade.
“Now that China and Australia are in a strategic relationship， China needn’t be too anxious about such a situation， or to act tit for tat in dealing with differences. It should treat the situation with a great power style and vision，” said Wang， pointing out that Australia’s attitude has been changing with the situation， albeit slowly. In the past years， Australia has made gestures to pursue more independent foreign policies， said Wang，“That change shall be encouraged while Australia should be reminded of its inappropriate acts.”