Address by The Hon Tim Fischer MP, Deputy Prime Minister, Leader of the National Party, Minister for Trade, to the Australia-China Forum, Beijing, 8 September 1997.

Ladies and gentlemen.

I am delighted to be back in Beijing for my fourth visit this decade and my second visit as Deputy Prime Minister. I am also delighted that I have had the opportunity to meet with my colleague and good friend Vice Premier Zhu Rongji. This year our Prime Minister visited in March and we were fortunate to have the opportunity to host the Vice Premier when he visited Australia in May. I am here in China this time at his invitation.

I am sorry that I will not be able to stay longer on this occasion but I did think it was very important for me to be here for the Australia - China Forum.

This year's Australia - China Forum marks twenty five years of diplomatic relations between Australia and China: twenty five years of trade and more recently investment; twenty five years of enormous growth and development in China, and enormous growth and development in the friendship and cooperation between Australia and China.

I will not attempt to give you here today a full account of Australia's trade and foreign policies but what should be stated clearly is the high level of importance attached to our relationship with China.

Just two weeks ago, the Minister for Foreign Affairs, Mr Downer and I released a White Paper which described the China relationship as one of Australia's four most important relationships. This embraces the whole range of Australian interests that are engaged in China and foremost is our economic and trade relationship.

Australia and China are very different countries, with different histories, cultures and economic experiences but a common theme is the power of our complementarity. These complementarities are not new, but they have been brought into play by the development of our two countries. In China's case, its remarkable opening up to the world and resultant economic change and modernisation since 1978. For Australia, our increasingly purposeful commitment over the same period to engaging our economy with that of Asia and an equally strong commitment to domestic economic change.

I look back on the opening of this era in 1972 and at how unsophisticated we all were. Where few Australians spoke Chinese and not many Chinese spoke English. Where Australia's knowledge of China was truly limited and yet it was the dawning of a new era.

The engines of growth were igniting. And what we lacked in sophistication and formal knowledge was made up for by energy and goodwill.

Today thousands of Australians study Chinese language, economy, politics, law, business etiquette and philosophy.

Millions of Chinese study English, thousands study a wide range of disciplines in Australian universities and colleges, and hundreds more undergo English language and vocational training conducted by Australian institutions in China.

The ``engagement'' between Australia and China is truly multifaceted at all levels of society, at all ages. But what gives me the greatest excitement for the future are the numbers of younger Australians including China in their studies, who are graduating from universities and taking their place in Australian companies and in government - some living and working in China. Many will join your companies to enhance the Australia-China relationship over the next twenty five years.

Our trade relationship has shown enormous growth because of you and your companies represented here today. Both Australians and Chinese have contributed to the phenomenal growth in trade over the last quarter of a century.

You have taken the risks, travelled, learned of the other's business style, made good decisions, learned from the poor decisions and grown.

Through organisations such as the Australia-China Business Council and Chinese equivalents you have supported each other, learnt from each other's experience. It has been hard, rewarding, fulfilling and clearly successful.

This is the third Australia - China Forum following those held in 1993 and 1995. This year's forum focuses on four key sectors representing four of Australia's key industry strengths: information technology and telecommunications, food and food processing, transport and distribution, and financial services

Representatives of all these sectors are here at the forum to seek business opportunities and extend their commercial network.

Delegates to this forum represent small, medium and large sized companies.

One thing the Australian participants have in common however is the desire and commitment to initiate business with their Chinese counterparts. All have state of the art technology, quality of service and expertise that has given them an edge on other competitors elsewhere in the world.

They have been invited to attend this Forum because they have competitive advantage and are able to play a constructive role in China's development that will result in mutual benefit for both our countries.

The Chinese delegates have come from far and wide to attend this Forum. We have representatives from enterprises in Guangzhou, Shanghai, Beijing and other centres. They have been hand picked to attend because of their business achievements and desire to develop partnerships with Australian companies, potential partnerships that can offer them new and innovative opportunities to maximise their business potential.

In 1972 the amount of trade between Australia and China could be measured literally by the tonnage of wheat and other primary commodities.

According to Australian figures, since the first years of the diplomatic relationship in the early 1970's, two way trade has grown from A$158 million to over A$ 8 billion in 1996. Trade between our two countries in the past decade has grown twice as fast as our trade with any other major trading partner.

I would like you to indulge me for a moment while I take you back to a comparison of some trade figures.

In 1973, Australian exports to China of greasy wool totalled A$19 million. In 1996 exports of wool, including wool tops, totalled A$ 570 million.

In 1973 our exports of pig iron totalled A$12 million. In 1996 the figure for iron ore was A$ 570 million.

Wheat was our major export at that time totalling A$ 37 million. In 1973 the first contract for the sale of iron ore was concluded, providing for the supply of one million tonnes per annum over three years.

In 1973 Chinese exports to Australia of clothing and textiles was A$ 32 million. In 1996 this figure was over A$ 500 million. Footwear from China was A$ 2 million in 1973. In 1996 China exported A$ 280 million worth of footwear to Australia!

Australia is now China's ninth largest trading partner. In turn China is our fifth largest trading partner. The figures for China and Hong Kong combined make China our third largest export market.

If this trend continues, and there is no reason why it should not, by the year 2000, China will be our third largest trading partner after Japan and the United States.

Australian exports to China continue to be underpinned by wool, iron ore and coal. Personally, I am delighted that China continues to be our major ``foreign partner'' in the wool industry, coming as I do from a region in Australia that is noted for its wool production.

It is important to work constructively on new initiatives to improve the trade and investment environment between our two countries.

One of the agreements reached between Prime Minister John Howard and Premier Li Peng in April was to reinvigorate the Joint Ministerial Economic Commission, the highest bilateral mechanism for management of our economic relations. The JMEC Intersessional Meeting held in Canberra recently produced some very positive results. One of these was agreement on the commencement of negotiations for a model wool contract.

I have also recently met with a delegation led by the Vice-Mayor of Shanghai to discuss a number of major projects that will be of benefit to both Australia and China and develop the wool trade to maintain a strong momentum well into the future.

The trade fabric of our relationship is changing, not just in textiles.

Today, over 300 Australian firms are represented in China operating primarily in the major coastal cities. But Australians can also be found undertaking business in the more challenging interior of China. Their activities now go beyond primary products supply and take in a broad range of sectors.

Just some of these are building and construction, transport and distribution, airport landing systems, bond trading software, traffic control systems, high speed ferries, medical equipment, manufacturing, environmental management, education and vocational training, food processing, information technology, telecommunications, advertising and design and of course the important service sectors of law, banking and insurance.

Many of these are small to medium sized companies that have found successful niche markets as China's economy matures. And China will continue to require the sort of expertise and technical innovation that Australian companies are famous for.

To date, Australian realised investment in China totals A$1.5 billion. Contractual investment is A$ 5 billion.

China has made a number of strategic and significant investments in Australia. The Mt Channar iron ore mine and Portland aluminium smelter are two of the major ones, although investments are diversifying into other sectors such as manufacturing, real estate development, mineral exploration and wool processing.

The China International Trust and Investment Corporation is well represented in Australia, as are a growing number of other Chinese enterprises. China's investment in Australia totals A$ 1.5 billion.

Vice Premier Zhu Rongji during his address to the Australia-China Business Council in Australia this year spoke of the ``huge potential for cooperation'' between Australia and China.

Prime Minister John Howard during his visit to China earlier in the year has forcefully stated the potential for a new economic ``strategic partnership'' between Australia and China.

I could not agree more with these sentiments and believe that the opportunities are only limited by our ability to find the common ground for these partnerships and by our imagination.

While it can be said that China has only recently gone through its own modern industrial revolution, due to the rapid pace at which this has been undertaken, China is already prepared for what we may call the ``new age industrial revolution''.

The four focus sectors of this Forum are representative of the new age of industry. These sectors will form the platform upon which industry, communications and continued economic growth will be based. The revolutionary advances and developments in these industries are not only relevant to our modern world but crucial to its continued sustainability into the next millennium.

Australia has a reputation as a world class producer of technology and many Australian companies are leaders in their fields. China has also experienced huge growth in the manufacture of high technology, which is based on important scientific developments and solid research and development. I am sure under Dr Song Jian's guidance we can expect these important trends to continue.

Australia's strengths in banking, insurance, accounting and legal services add a new dimension to our already strong reputation as a reliable supplier of commodities.

Sponsorship of the Australia- China Forum by National Mutual, ANZ and others is a sign of the substantial commitment that these companies give to the Australia - China business partnership.

The Australian Government is committed to this partnership. Austrade operates three major offices in China - Beijing, Shanghai and Guangzhou. We also maintain ``outrigger offices'' in Dalian, Hangzhou and Nanjing. This network of assistance has been responsible for encouraging and maintaining the activities of much Australian business in China.

While governments can create the environment it is up to you, those who have been at the ``coalface'' during the past twenty five years, to maintain the successful trading relationship between our two countries.

I urge you to make the most of your time together over the next two days. To interact, ask questions, develop relationships and in the coming weeks to actively follow up and exchange information. To use this Forum as a genuine base for business and a key to unlocking opportunities over the next twenty five years.

Austrade, the Embassy, the sponsors and our speakers have worked very hard to create the business environment for the Forum. I thank you for attending the forum and wish you much success here and in the future.