THE HON.

TONY ABBOTT MHR

LEADER OF THE OPPOSITION FEDERAL MEMBER FOR WARRINGAH
**CHECK AGAINST DELIVERY** 24 July 2012

ADDRESS TO AUSTCHAM BEIJING CHINA

E&OE.

WORKING HARDER ON A COMPLEX RELATIONSHIP In just over 30 years, hundreds of millions of Chinese have entered the middle class acquiring TVs, motor cars, extensive wardrobes, and air-conditioned homes. They have become better educated, more thoroughly informed and more widely travelled. For the first time since 1949, Chinese people can more-or-less decide how they work and where they live, even outside the country, although they still cant choose their government. Its been a great watershed in human development as well as one of the most remarkable economic transformations in human history. China is tracking to be the worlds largest economy, perhaps within two decades. Thanks to China, the world now enjoys reliable and inexpensive consumer goods plus the benefits of selling its own products into an increasingly sophisticated Chinese market. Inevitably, the rise of China has brought challenges as well as benefits. The United States now has a more effective potential rival as well as a better potential partner. On the other hand, a US presence is now more welcome to the smaller countries of our region. On balance, the complications of economic advance seem much preferable to those of stagnation. Australia has played an important part in the rise of China. Our iron ore furnishes much of its steel, our coal and gas now powers much of its industry, and our universities and colleges help to train many of its people. Our friendship with China is more recent than that with Japan and less developed than that with the United States but it is increasingly important for us and far from insignificant for the Chinese.
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Australia has never made the mistake of thinking that becoming better friends with one country automatically means becoming worse friends with another. Prime Minister John Howard understood that you could make a new friend without losing an old one. He famously declared that we do not have to choose between our history and our geography and managed the relationship with China so that we didnt have to choose between our interests and our values either. Its important to appreciate that the relationship between Australia and China hasnt simply been an economic one. Modern Australia is an immigrant society to which Chinese people have been coming almost since the arrival of the First Fleet in 1788. It seems that the first Chinese person to arrive in the then-colony of New South Wales was Ahuto, a carpenter, who came as a free settler in 1803. The founder of Australias wool industry, John Macarthur, employed several Chinese. The first Chinese to achieve some prominence was Mak Sai Ying who became publican of the Lion Inn in Parramatta in 1829. Thousands of Chinese joined the gold rushes from the 1850s, feeding Australias first resources boom. By the time the six colonies formed a new Commonwealth, at the turn of the last century, more than 100,000 Chinese had come to Australia. By then, though, the gold had dwindled. Many of the Chinese miners had gone home. Others had become craftsmen, market gardeners, grocers and cooks. They had settled in Australias growing cities and established small businesses. Notwithstanding the limitations of official policy or occasional private prejudice, Australians have always been an easy-going people ready to think well of others and to take them as they find them. Parliamentary support for a restrictive immigration policy didnt prevent Chinese-speaking Senator Thomas Backhap from being a well-respected MP. There were Chinese Australians in the armed forces, such as Private Bill Sing, a sniper at Gallipoli, who won the Distinguished Conduct Medal. Since immigration restrictions were finally lifted in the 1960s, hundreds of thousands more Chinese people have settled in Australia as students, skilled workers and professionals. No less than Britons, Greeks, Italians, and Vietnamese, they have felt the gravitational pull of the Australian way of life. Their ready integration into the life of our country should give Australia and China a level of comfort and familiarity in dealing with each other.

Australias cultural self-confidence has come from testing our ideas and our ways of doing things against those of others and changing ours whenever they have been found wanting. The Chinese restaurant, long ubiquitous in Australias suburbs and towns, was an early sign of our readiness to absorb foreign ways and make them part of our own. Many of the 700,000 Australians of Chinese ancestry have come via Singapore, Malaysia or Hong Kong and could readily appreciate Australias British heritage. These days, Australians of Chinese background abound in our professions and dominate the academic results of many of our best schools. Dr Victor Chang was one of Australias finest cardiologists. Professor John Yu, a former Australian of the Year, is one of our foremost paediatricians. Their emphasis on the importance of family, hard work and education; their business acumen and their instinct, in Prime Minister Menzies phrase, to be lifters not leaners, make them model citizens. Im proud that the first Chinese-born member of an Australian parliament was a member of my party: Helen Sham-Ho MLC. So was the first Chinese-born member of the national parliament, Senator Tsebin Tchen. With their respect for tradition and aptitude for business, Chinese people should be natural liberal conservatives. Australias conservative political leaders have good Asia credentials. It was Menzies who first referred to Asia as the near north rather than the far east. It was the Menzies government that launched the Colombo Plan for the future leaders of Asia to study in Australia. It was the Holt government that ended the embarrassment of the white Australia policy. Since Deng Xiaoping first introduced market reforms and opened China to the world, Australian governments of both sides have striven consistently to cultivate the best possible relations with China. The Howard governments approach to foreign policy, including relations with China, was to avoid giving other countries gratuitous public advice in favour of trying to work together on matters of mutual interest. As health minister in the Howard government, I visited Beijing (twice), Shanghai, Hong Kong and Chengdu in 2006 and 2007. I was keen to work with my then-Chinese counter-part, Minister Gao, to maximize precautions against a possible bird flu pandemic. At my colleagues invitation, I visited Sichuan province and was, so Im told, the first Australian MP since Bob Hawke allowed to cuddle a baby Panda bear. Should the Coalition win the next election, my goal would be to maintain this consistency.
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The Coalition is committed to 40 per cent of school leavers studying a foreign language and a two-way street version of the Colombo Plan where Australias future leaders study in Asia and vice versa. We wont neglect the development of northern Australia, which could be a food bowl for Asia; and, to this end, will shortly release a position paper based on over 12 months of consultation. It should go without saying that geography wont keep Australia prosperous even in the coming Asian century. Australias moment could easily be missed through complacency. Hence, an incoming Coalition government would repeal the carbon tax and the mining tax, cut $1 billion a year from business compliance costs and boost workplace productivity. As the problems of Europe and elsewhere demonstrate, you cant cure a crisis caused by too much debt and deficits with more debt and deficits. Government, like families and businesses, has to live within its means. Of course, Australias attitude to press freedom, the conduct of the courts and human rights more generally is very different to that of Chinas. As a sovereign nation, Australia has a duty to speak for its citizens and its values but respectful representations are normally the most effective ones. The human rights dialogue that the Howard government established with China in 1998 has provided a useful forum for our government to put its case. Whatever disagreements Australia has with China, its important to acknowledge the vast improvement in living standards that Chinese people have enjoyed since the 1970s. In the long term, China should prosper even more if its people enjoyed freedom under the law and the right to choose a government, despite the difficulty of managing this transition in a country with a tumultuous history. Regardless of their political orientation, the more people work together the more they usually end up learning from each other. Japan, Korea and Taiwan, as it happens, drawing on the West, have adopted for themselves liberal democratic constitutions while adapting them for local conditions. China has substantially kept its commitments to keep two systems within one country for Hong Kong. Different systems didnt prevent the Howard government from negotiating a $25 billion deal to deliver gas from the North-West Shelf to China, by far our biggest ever commercial deal to that time. This could only have been achieved on the basis of the mutual trust and respect that existed between the Australian and Chinese governments. Of course, it was also the Howard government that began negotiations on a free trade agreement with China. At the time, it was the first FTA that China had embarked upon with a major developed country.

Since then, New Zealand has successfully concluded its FTA in just three years while Australias agreement remains a work-in-progress despite seven years of negotiations. The proposed FTA with Japan has also stalled. As part of its commitment to freer trade more generally, spurred on by New Zealands experience, an incoming Coalition government would renew our pursuit of these bilateral agreements. The Coalition unambiguously welcomes foreign investment. Indeed, people often forget how vital its been for the development of Australia. Without Japanese and American investment, Australia would have a much less robust mining and resources sector. Without British investment, our agricultural sector would have been under-developed. Without American and later Japanese investment, there would be no Australian motor industry. To maintain public support for foreign investment, Australians need to understand that it is clearly in our national interest; just as investors need to be confident that Australia remains a good place to invest thats not subject to sovereign risk. An incoming Coalition government would welcome Chinese investment on the same basis that we welcome investment from other countries. It would, of course, have to pass a national interest test and the scrutiny of the Foreign Investment Review Board. The Board looks very carefully at sovereign investment but it does that for all countries, not just China. Chinese investment is complicated by the prevalence of state-owned enterprises. It would rarely be in Australias national interest to allow a foreign government or its agencies to control an Australian business. Thats because we dont support the nationalization of business by the Australian government, let alone by a foreign one. Still, for every bid that the Board turns down, such as the Singapore stock exchanges attempted takeover of the ASX, there are literally dozens of investments that are approved (often with conditions like keeping an Australian headquarters and directors) such as Yancoals recent merger with Gloucester Coal Ltd. The Coalition understands the importance that other countries place on security of supply and, in government, would avoid self-indulgent gestures such as suspending live cattle exports to Indonesia in panic over a TV programme or cancelling uranium sales to India to appease the Greens. Even in its watered-down version, the mining tax has adversely altered the profitability of investment in Australia. Its wrong to single out one sector for differential tax treatment. Its wrong to send the message that success is punished.
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Above all else, its wrong to break faith with people who have trusted Australia not to be a place where the rules are changed after the game has started. Thats why, along with repealing the carbon tax and restoring border protection, repealing the mining tax will be an urgent priority for an incoming Coalition government. With much greater economic strength comes more influence in the wider world and greater global responsibilities. Australia appreciates Chinas desire to live behind secure borders with friendly neighbours because thats what we expect for ourselves. We accept the modernization of Chinas armed forces because thats what all countries want for their military. On the other hand, no big country is entitled to get its way with smaller ones just because it can. In Australias experience so far, a stronger and more confident China has been a better friend to us and theres no reason why this shouldnt be the case with other countries too. Of course, the more successful a country is, the more capacity it has to throw its weight around; but it also has less reason to do so and more to lose from the attempt. Australias strong military relationship with the United States should be seen more as a means of building trust than picking sides. American policy is certainly not infallible but its interventions abroad are invariably in favour of democracy and human rights, not against them. As far as Australia is concerned, our alliances are for collective peace, stability and security, not just for that of our alliance partners. Under a Coalition government, Australia will do what it can to ensure that territorial disputes in the South China Sea are managed peacefully in accordance with international law. We will continue our economic relationship with Taiwan within the One China policy. We will be a strong voice for human rights confident that, over time, the better angels of our natures will everywhere assert themselves. As prime minister, I would hope for political reforms to match Chinas economic liberalization while acknowledging the governments right to maintain order and respecting Chinas growing place in the world. We already have a strong relationship with China based on shared interests. Over time, I hope that it might be based more on shared values. The next Coalition government will stand up for Australias interests and values but our objective would be engagement rather than containment and cooperation rather than strategic competition.

An initiative like the Australia-America Leadership Dialogue, which has done so much to deepen and develop that friendship, could be even more valuable for an inevitably more complicated relationship such as that with China. Because of our shared history and values there are easy returns from the work Australians do on our bonds with America. To get anything like comparable returns with China, we will have to work much harder. It will take time and much further evolution for our friendship with China to approach the warmth that we take for granted with America. But it is worth the effort and it must be made. Some would like to see Australia actually choose between America and China. Thats a choice we should never have to make. If we ever needed to, I suspect that the world would be in a dark place. China is a good friend of Australia and it can be a better one. For my part, I will do whatever I can to build this friendship and to foster the relationships between China and other countries that are so important for the future of the world. My first overseas trip as prime minister would be to Jakarta and my second would include Beijing. Indonesia and China, after all, are the countries which matter most for our border security and our economic security which are the Australian governments first duty to preserve.

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