Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Hansard source

I thank the member for Oxley for his question. I know the keen interest that he takes in the relationship between Australia and China, in particular the trade relationship. China is Australia’s largest trading partner, and two-way trade with that country is $58 billion. So far as the relationship is concerned, this government on coming to office reappraised the approach in terms of China and decided it needed a new focus and a new vigour.

The previous government had entered into discussions around a free trade agreement, but these talks had been stalled for some three years. The unfreezing of the discussions with China was fortuitous and timely because the fact is that the global financial crisis has impacted on economic growth around the world. China is no exception, but the reality is that, whilst there will be an impact on China’s growth rate, China will still have a robust and strongly growing economy.

The IMF has said that from 11.9 per cent growth over the last calendar year, it expects China’s growth to be 9.7 per cent this year. So it is slowing, but it is still very strong. In fact China will continue to be one of the fastest-growing countries in the world. It is important to also understand the composition of and contributions to China’s growth. It is mostly domestically driven. In 2007 only two per cent of that close to 12 per cent was as a result of net exports. In the first nine months of this year, net exports have contributed only 1.2 per cent to China’s economic growth.

So China still remains terribly important in terms of our trade equation, and that is why following the initiative of the Prime Minister in engaging his counterpart in unfreezing the free trade talks and the discussions that have flowed from that—two more rounds of discussions; another one next month—we are pleased to say that we are well on track to progressing that FTA. Also, we are pleased to be hosting here tomorrow the chairman of the National Development and Reform Commission, a very significant body in terms of the economic growth and the future development and infrastructure spend in China. The chairman, Zhang Ping, and I will be conducting more discussions on mutual cooperation, how we can advance the trade relationship and how we can together face the challenge of the global financial crisis that is confronting both economies. I am confident that we can build on this very strong relationship, but it does require engagement at the political level. This is something that Australia has engaged in in great detail, from the Prime Minister down. Many of the ministers have made visits to China. We have received many delegations from China. So I am confident this relationship will stand us in good stead.

Whilst I am on my feet I might also indicate that the significance of the continuing growth, albeit slowed, in the Asian region is another significant reason why the recently concluded FTA with the ASEAN region will also hold Australia in good stead. We do not know what is around the corner in terms of the impact, but I can say that we have significant cushions. Our trading relationship is an important part of that cushioning effect, and we will do what is necessary to advance the trading interests between us and China and between us and the ASEAN region.

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