Sydney, 23 May 2005

The visit of the Chairman of China's National People's Congress, His Excellency Mr Wu Bangguo

INTRODUCTION

Distinguished guests, ladies and gentlemen.

On behalf of the Australian Government, and the Prime Minister, it is a great honour and delight to welcome, the Chairman of China's National People's Congress, His Excellency Mr Wu Bangguo, to Australia and this important forum.

I know that the Prime Minister, Mr Howard is looking forward to meeting with Chairman Wu in Canberra tomorrow to further discuss our broad and thriving relationship.

I would also like to welcome Madam Zhang Ruizhen (Chairman Wu's wife) to Australia

I would also like to welcome Ministry of Commerce Vice Minister Wei Jianguo and hope that this visit will cement his new friendship with Australia.

And Her Excellency Madam Fu Ying, China's Ambassador, who is already a good friend, and a champion of deepening the bilateral relationship.

His Excellency, Mr Re Di,Vice Chairman, National People's Congress

Mr Dai Bingguo, Minister, Central Foreign Affairs Office of China

I would also like to acknowledge my former federal ministerial colleague, Mr Warwick Smith, now Chairman of the Australia-China Business Council (ACBC) and Executive Director of Macquarie Bank.

Warwick and the ACBC kindly agreed to facilitate today's meeting on behalf of the Department of Foreign Affairs and Trade and China's Ministry of Commerce. He will also speak on Australia's capabilities in banking and financial services.

Finally, I would like to welcome Dr Alan Thomas, Australia's Ambassador to China …

… Alan is accompanying Mr Wu during his visit to Australia.

Today's forum is an important opportunity for business people from our two countries to discuss practical areas of future economic and trade cooperation...

… and there is much business to be done between our two economies.

In particular, today's topics draw on the strong complementarities between us...

… with Australia well placed to provide the services and resources China needs for its continued economic growth and development.

Bilateral Trade

In the last decade, merchandise trade between Australia and China has more than quadrupled to $29 billion …

… and in 2004, China emerged as Australia's second largest merchandise export market and second largest source of merchandise imports.

Australia is a significant supplier to China of mineral and energy resources, natural fibres and other agrifood products.

And China is a major supplier of consumer products to Australia.

The strong growth in bilateral trade highlights the complementarities between our two economies, our respective comparative advantages and our geographic proximity.

Australia and China are natural trade partners.

Trade between our two countries is set to grow further with the first shipments of LNG under the groundbreaking $25 billion Guangdong LNG deal set to commence next year...

… and Australian companies and consortia are expected to be successful in future Chinese contracts for long-term supply of mineral and energy resources.

As well, we are seeing many smaller Australian exporters finding niche markets in China for their products.

Of course, trade between our two economies is not limited to goods alone.

Growing people-to-people links between our two countries have been underpinned by the rapid growth in Chinese students and tourists coming to Australia.

China is our largest source country of overseas enrolments in Australia...

… and in 2004, China provided over 68,000 of the 322,000 foreign student enrolments in Australia - an increase of more than 17 percent over the previous year.

Tourism links between our two countries are also expanding rapidly and prospects for greater cooperation

… tourist arrivals from China in 2002-03 exceeded 220,000...

… and by 2013, China is expected to be the largest source of foreign tourists for Australia.

For many Australians there is a very personal connection with China.

The China-born community in Australia exceeds 140,000 - with many more Australians of Chinese ancestry.

In fact, after English, Chinese - in one dialect or another - is the most widely spoken language in Australia.

Australia and China will continue to play an important role in each other's economic development.

Deepening bilateral engagement

Our bilateral engagement is supported by frequent high-level contact between our two countries.

The Prime Minister has made five visits to China since assuming office in 1996 - most recently in April.

And Australia has hosted visits by Mr Wu's predecessor as Chairman of the National People's Congress, Li Peng, in 2002…

… by former Chinese President Jiang Zemin in 1999, the first visit to Australia by a Chinese head of state …

… and by current Chinese President Hu Jintao in 2003.

During President Hu's visit, Australia and China concluded a forward-looking trade and economic framework...

… which included provision for a FTA feasibility study.

As you all know, that study has now been successfully completed...

… paving the way for the commencement of FTA negotiations…

… which were announced by Premier Wen Jiabao and Prime Minister Howard during the Prime Minister's recent visit to China.

The negotiations will be comprehensive, covering goods, services and investment, and be completed as a single undertaking.

These negotiations are a significant development in our already strong and growing bilateral relationship.

As the feasibility study concluded, an FTA with China would enhance output and employment in both countries and in all Australian states and territories ...

… boosting the Australian economy by an estimated A$24.4 billion over a ten year period.

The FTA will also help shape our future trading relationship with the world's fastest-growing major economy...

… with China's economy, in the last two years, accounting for a quarter of the world's total economic growth.

I am pleased that the first meeting on the FTA negotiations will take place this afternoon between my department and the Ministry of Commerce.

Later in our program today, there will be presentations from both countries on the FTA, followed by an opportunity for the audience to ask questions.

In addition to starting the ball rolling on the FTA, the Trade and Economic Framework concluded during President Hu's visit also set the agenda for deepening our economic integration over the next 5-10 years …

… including through a commitment to strategic cooperation across a broad range of key sectors, including agriculture, mining and services.

Trade in services is a particularly exciting area for future cooperation - which we will hear more about after the morning tea break.

China is a good partner for Australia. Equally, Australia is a good partner for China.

Australian firms have been at the forefront in applying global advances in technologies across a diverse range of industries including banking and financial services, the development of minerals and energy resources, and engineering and construction services.

During his visit, Mr Wu has already had the opportunity to see for himself Australian ingenuity in the development and transportation of iron ore and natural gas resources in Western Australia …

… and Australia's HIsmelt process, which allows direct iron-smelting of cost-effective, environmentally-friendly iron at a smaller scale for steel producers around the world.

Australia welcomes China's investment in HIsmelt …

… and investment in other areas.

Australian firms are in a strong position to assist China as it meets its own development challenges.

One example of this assistance is the long term energy partnership.

During his visit to Perth, Mr Wu witnessed the signing of a training program to help provide China with the skilled labour force necessary to commence LNG imports next year.

China and Australia have good cooperation in resources and energy.

We would like to broaden the base of our cooperation to include areas such as services, which will be discussed later this morning.

Multilateral and Regional Cooperation

Australia's cooperation is not just limited to bilateral initiatives.

As you know, China has a key role to play in the WTO and APEC.

As a key developing country WTO member, China plays a positive role in building a consensus among developing countries to major reforms in trade in agriculture products - market access and production-distorting subsidies.

Australia and China have a strong mutual interest in working together to ensure that agriculture, services trade and a range of other market access issues are addressed comprehensively in the Doha round.

In APEC, Australia and China have cooperated closely.

Last year, within APEC, Australia and China worked together to hold workshops on how to negotiate substantive and meaningful free trade agreements …

… and on encouraging developing economies to adopt international standards.

And within APEC we have discussed a range of issues important to the region including structural reform, corporate governance, anti-corruption, terrorism and secure trade.

Conclusion

The future is bright for Australia-China economic and trade cooperation.

Our two countries have a fantastic opportunity to deepen economic integration and play a major role in each other's and the region's future development.

The presentations after morning tea will address some key areas for increased cooperation, trade and investment between our two countries.

Mr Wu has seen first hand some of the ways that our two countries are already cooperating.

And there is great potential to explore cooperation in many more areas.

Unfortunately, my Parliamentary obligations in Canberra mean that I will have to leave immediately after Mr Wu speaks.

However, I look forward to seeing Mr Wu again tomorrow, in Canberra.

And would now like to ask him to present the keynote address for today's Forum.

Ladies and Gentlemen,

The Chairman of China's National Peoples Congress, Mr Wu Bangguo.