By Zhao Minghao Source: Global Times Published: 2017-3-27
During Chinese Premier Li Keqiang`s five-day visit to Australia from Wednesday to Sunday, the two sides agreed to deepen cooperation under the framework of the bilateral free trade agreement (FTA), especially in the service industry and investment.
The China-Australia FTA took effect in December, 2015. By far, the two countries are each other`s major trade partners. Bilateral trade volume reached $107.8 billion last year.
Against the backdrop of a sluggish global economy, China is seeking partners to push forward globalization and free trade. Australia has the same goals. Australian Prime Minister Malcolm Turnbull said in the Australian Financial Review that "as China transitions to a more sustainable, consumer-driven economy, Australia has a new historic opportunity - underpinned by ChAFTA - to meet Chinese demand."
Turnbull also spoke highly of Chinese President Xi Jinping`s speech at the Davos forum earlier this year and welcomed China`s robust defense of open markets.
During Li`s visit, China and Australia also agreed to establish platforms for dialogue on innovation, energy and high-level security. These will serve a complementary role to the annual prime ministerial meeting and facilitate results-oriented policy communications. Currently, the two countries have more than 40 governmental mechanisms and non-governmental platforms such as the bilateral CEO Roundtable Meeting.
The China-proposed One Belt and One Road initiative has garnered much attention in Australia. Australian enterprises such as mining company BHP Billiton believe the initiative means more business opportunities. Australian Minister for Trade, Tourism and Investment Steven Ciobo is expected to attend the Belt and Road Forum for International Cooperation in Beijing in May. The Lowy Institute, one of the most prominent think tanks in Australia, emphasized in its recent report that the Belt and Road initiative is largely motivated by China`s pressing economic concerns.
Chinese enterprises also believe Australia`s plan to develop the country`s northern part will also bring opportunities. In June 2015, the Australian government released Our North, Our Future: White Paper on Developing Northern Australia, which envisioned a blueprint for northern Australia in the next two decades. The region is closer to Asia and can better utilize Asia`s speedy economic development.
Chinese companies have a strong interest in participating in the development of northern Australia, especially the construction of basic infrastructure. For instance, the China State Construction Engineering Corporation and Australia`s Balla Balla Infrastructure Group have struck a deal to develop the Balla Balla mine, railway and iron ore export facility in western Australia.
As Australia hopes to decrease the country`s economic dependence on mining, Chinese enterprises have started agricultural cooperation with Australia, such as high-quality dairy products for which China`s growing middle-class has an exceptional demand.
However, a lack of strategic mutual trust between the two countries will impede bilateral economic cooperation. Canberra is worried that Beijing will seek to replace Washington`s dominant role in the Asia-Pacific region. Premier Li reiterated that China will "never seek hegemony and dominance," adding China needs a stable global environment to grow its economy.
How to cope with the US presided over by the country`s newly elected President Donald Trump has become a heated topic among Australian strategists. Many are concerned that the "America First" doctrine, advocated by Trump, will bring more uncertainties to Australia and the Asia-Pacific region.
There have been debates among Australian leaders over the Trans-Pacific Partnership agreement and the refugee crisis. Stephen FitzGerald, former Australian ambassador to China, believes that Australia should reassess its relations with the US.
US Vice President Mike Pence will visit Australia in April. Li stressed that China-Australia cooperation is not targeted at any third party. A stable Sino-US relationship suits the interests of regional countries including Australia. At a time when uncertainties are rising in the current international relations, Canberra should work on enhancing understanding between Beijing and Washington instead of acting rashly on issues such as the South China Sea disputes.
The author is a visiting fellow of Chongyang Institute for Financial Studies at Renmin University of China.