Comment: PM’s visit to China

Australian Prime Minister Julia Gillard’s popularity may be waning at home, but her recent trip to China achieved a number of important successes in strengthening the Australia-China relationship, writes Rowan Callick.

I have found myself caught up recently in speaking and writing about Victorian Opera’s mid-May production of the marvellous 1987 opera Nixon in China – only the second time John Adams’ work, with a stimulating and well-researched libretto by Alice Goodman, has been performed in Australia.
This, says Goodman, is “a heroic opera,” not a satire.
The heroism is that of people who are in their late middle age, and in the cases of Mao Zedong and Zhou Enlai, elderly men – “all with the ambition of their youth achieved or abandoned.” Instead of seeking comfort from their stature and achievements, they risk almost all, to link hands across a very great divide.
In Australia’s case, Gough Whitlam too risked much by venturing to China as opposition leader in 1971, ordering the forging of diplomatic relations as a foreign affairs priority as soon as he was elected in 1972, and then visiting an ailing Mao as prime minister in 1973.
In contrast, the recent visit of Prime Minister Julia Gillard to China entailed little risk or tension. She was not going to inject a note of controversy as her predecessor Kevin Rudd did at Peking University, when he mentioned human rights issues in Tibet, and offered to become a zhengyou, a true friend, to China.
But it did involve organisation and commitment.
Perhaps unsurprisingly, Gillard has joined the chain of prime ministers who, when their touch deserts them at home, find the world of international affairs more satisfying – and even at times more rewarding in domestic political, polling terms – than the embattled life in Canberra.
Business critics complained, with some justification, that she left it too long – two years – between visits.
But few could deny that it was a considerable success. Of course, by coinciding her visit with the Boao Forum, she traded off that considerable positive by diluting its impact because a dozen other national leaders were also inevitably coming to China at the same time, also hinged off the same event.
She nevertheless secured two crucial wins from the visit, whose value was vitally framed and reinforced by the presence in China of the most influential business delegations that had even gone there from Australia.
Every key sector, and pretty well every major corporation were represented at chair or chief executive level.
This underlined the understanding in Australia’s business world of the effects of the rebalancing of the Chinese economy, opening up new opportunities and new sectors for trade and investment.
The most important announcement during the visit, which Gillard made while speaking at the China Executive Leadership Academy in Pudong – one of six national-level party schools – was that Australia’s ANZ and Westpac banks would be permitted to convert the yuan and the Australian dollar directly for mutual business, rather than as before paying the costs of going through a third currency, overwhelmingly the US dollar.
This will start to make business cheaper and easier, especially for small and medium companies – the giant resources contracts are still likely to be settled in $US for some time to come.
The Prime Minister led a senior political delegation too. She was accompanied in China by Foreign Minister Senator Bob Carr, Trade Minister Craig Emerson, and Financial Services and Superannuation Minister Bill Shorten.
And the timing was telling. Gillard was among the first foreign leaders to hold talks with the new Premier Li Keqiang, in Beijing, and earlier with top leader and party general secretary Xi Jinping, who had recently added the title of president, at Boao.
Xi had urged that the relationship between the countries reach “a new level.”
And so, in Beijing, they did, at the meeting between Gillard and Li. The two agreed annual leaders meetings at the premier level, and ministerial-level economic and foreign and strategic dialogues. It is possible that these meetings may be set up in the margins of multilateral events both sides are already committed to attend – but the agreement means that they will take some priority, even then, when many countries are likely to be queuing to meet China’s leaders.
At the talks, the leaders also agreed to conduct joint research on carbon trading issues, Australia agreed to help Chinese travellers gain access to the “Smartgate” rapid passport clearances at airports, and the countries agreed to liaise on some aid projects, including on developing and testing drug resistant malaria, on HIV/AIDS, and on water resource management, perhaps starting in the Pacific islands.
And bilateral defence agreements were strengthened, including plans for the two navies to join in a hostile fire exercise. An inaugural Australia-China Military Friendship and Culture Week, to be held in Canberra in September or October this year.
This amounted to a more weighty package of achievements than expected from the visit.
From China’s perspective, the new arrangements underline the expectation – as portrayed in Xinhua news agency’s accounts – that Australia would as a result and over time, start to align its thinking and actions more with China’s.
Su Hao, a professor at China’s Foreign Affairs University, said that “although Canberra has cooperated with Washington’s pivot to the Asia-Pacific region, it has defined itself as an Asian country, realising that China is an important nation in Asia” – as signalled by Gillard’s Asia white paper.
Linda Jakobson, the Lowy Institute’s East Asia program director, who had been urging for some time the creation of a top-level forum, viewed as a positive development the fact that now Australian and Chinese leaders would “be forced to get to know each other a little, in different domains, too” – beyond the economics.
The business dynamics were exceptionally positive. The Australia China Business Council organised the third Australia China Economic and Trade Forum, in Beijing, and the Business Council of Australia also arranged the Senior Business Leaders’ Forum. Both are now settling into important platforms both for networking and for sending and receiving messages from counterparts, and attracted top Chinese participants.
The challenge now, will be to provide strong content for the new forums established in both political and business realms. Concluding a free trade agreement, now in its ninth year of negotiation, is at or near the top of nearly every list of priorities.
Trade Minister Emerson revealed soon after the China visit, to an agribusiness conference in Melbourne, that Australia’s long-held insistence on a comprehensive deal has recently been abandoned, in favour of a “mini-package,” an FTA lite, with Australia choosing as its priority to focus on agriculture, even though this was long held to be a sticking point for the Chinese side.
Emerson said that the Chinese reciprocal focus was on granting all Chinese companies, whether state owned or not, exemption from having to obtain Foreign Investment Review Board approval for any investment up to $1 billion. He said: “Now, we can’t do that. The community would not accept that, and frankly nor would the (opposition) Coalition.”
His words confirm how much there remains for the two countries to talk about, as we seek to move closer together. The platforms are now in place to help this happen – as long as the shared interests also extend to an acceptance of the need, from time to time, to compromise to achieve progress. 

party_time_web*Rowan Callick is Asia-Pacific editor of The Australian, and author of the recently published Party Time: Who Runs China and How (Black Inc)

 

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