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Transcript of press conference: Diaoyutai State Guesthouse, Beijing: 25 June 1993

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PM: Well, I think I would like to begin by saying that the visit to Beijing has been most worthwhile from my point of view. Australia's relationship with China is important for two broad reasons. First, we

already enjoy a substantial economic relationship with China and the weight of the relationship will steadily increase as the economic reform process continues in China, but, of course, that is proceeding rapidly. Secondly China has very considerable influence in regional and international

affairs and this will increase as its economy and international trade both grow.

So the visit is also very timely from the point of view of advancing Australia's interests. The radical reform of the Chinese economy is providing many opportunities for Australian companies to develop new businesses here. It is important that the dialogue between our Governments is kept up and

supported in appropriate ways, new possibilities for joint ventures and other commercial collaboration. The trade policy environment in the Asia-Pacific region is currently very fluid and because of China's increasing role in regional trade it is

important that our Governments stay in touch at the highest level and coordinate our strategies wherever possible.

I have so far had three sets of discussions with the Chinese leadership. As you know a formal meeting yesterday and a long discussion over dinner last night with Premier Li Peng and a meeting this morning with Vice Premier Zhu Rongji. Straight after this Press Conference I will have a meeting and working lunch with President Jiang Zemin. At the meetings so far I think I'd describe them as both lively and most worthwhile. One characteristic of the Chinese leadership I very much respect is that they all have a clear-sighted view of their country's interest and they think very much in the




So I think it is very important to approach China on a realistic and businesslike basis which takes full account of our joint interest from a long-term perspective. And very clear from my meetings is that the Chinese Government values the relationship

with Australia and welcomes our moves to integrate more closely with Asia. Yesterday Premier Li Peng talked about projections for the Chinese steel industry and of the important role they expect

Australia to play as a supplier of raw materials to their economy. He and other Chinese leaders have also responded positively to my message about how Australia has strong technological capability in various fields which will be useful to China. Some of these capabilities are shown in the joint venture signings which have also coincided with my visit.

As you know I have also had extensive discussions about APEC. I have been heartened by the Chinese Government's firm support for APEC's trade

harmonising and liberalising role. They have also reiterated their close interest in the proposal to establish a process of periodic meetings between APEC leaders. They recognise the great potential of this proposal and have indicated their willingness to talk more about the delicate question of how Taiwan and Hong Kong might be allowed to participate.

We also talked about China's accession to the GATT and the sort of reforms Australia and other Contracting Parties hope to see in China's trade regime. At the top of our agenda are the tariffs and quotas on wool and I had an extensive discussion this morning with Vice Premier Zhu Rongji on that very subject and we have agreed that we will now engage in a round of bilateral talks on this issue.

Human rights were dealt with briefly at the formal meeting yesterday with Premier Li Peng but last night at dinner I talked with him at some length about the human rights situation in Tibet. With

Vice Premier Zhu Rongji I had a most worthwhile discussion on China's interest in establishing strategic long-term relationships with Australia in the development of China's steel industry and wool and textile industry. Vice Premier Zhu said we will take into serious consideration, that's China will take into serious consideration, the removal of tariffs and quotas on wool in the context of the development of an Australia-China wool industry. He said an agreement is a good idea to create a new world market for low cost high quality woollen wear.


That was, we were agreeing that China has unique opportunities as a manufacturer to supply the world with low cost high quality premium quality garments based on Australian wool and it is a joint opportunity we have. So I think the discussion I had with him this morning shows the quality of the partnership China is seeking to establish with Australia.

So, overall, I think I would have to say that this has been a most rewarding time in our dialogue with the Chinese leadership. The changes occurring in the Chinese economy are exciting and the potential

for expanding Australia's economic relationship with China is very great. In all I think a couple of days well spent. Now I would be glad to take any questions.

J: inaudible ... Zhu Rongji .... inaudible

PM: Well I ..inaudible.... I think a good relationship with him, I like him. He has the characteristic of all Chinese leadership, a long-run view of China's interests and therefore a long-run view of interests with other countries and I think working with

someone with those kind of perspective's gives you a real chance to think in long terms about such things as the development of the steel industry and primary based industry, the opportunities we have together

in respect of wool and also the broader questions like APEC, regional strategic issues, it is an opportunity to talk to somebody about the whole picture but you can also get half the picture in great detail.

J: inaudible

CJ: Mr Prime Minister, I am from Guangming Daily. An Australian republic also interests Chinese readers so I would like to ask a question on Australian republic. Australian officials believe that a republic is a milestone in the evolution of Australian nationhood and national identity. Would you like to make some comment on this?

PM: Well I am happy to reiterate what I have often said in Australia that the more confident Australia is of its identity the more psychologically set-up it is to project itself as it is into this region the better will be its integration with this region. So, Australia's own identity and the clarity with which Australians view themselves has not just a social

and political import but has a very strong economic import to it and to anybody who has visited this


part of the world I don't think anyone can be left with other than the view that this is the place -this is the area of the world where Australia's interests are inextricably linked in economic trade,

political and strategic terms. And we are better appearing in this region as we are, people governing ourselves representing ourselves as the unique country we are.

J: You mentioned Prime Minister that you discussed human rights at dinner last night with Mr Li Peng, what points did you put to him, what were his responses, were you satisfied with those responses,

and what might flow from those discussions.

PM: Well it was a private discussion with him, but I said that in relation to Tibet that Australia, that our relationship between our countries, is a good relationship; that Australia accepts Chinese sovereignty over Tibet but the question of cultural and religious accommodations of the Tibetan people

is an issue in Australia which we think if dealt with appropriately can diminish concerns in our country about the Tibetan people. The Premier gave me an indication of his thinking about the subject, some history of the relationship and we will, I think, now have a better understanding of each other's view and it's again something which I think

a subject which will - probably in terms of this modality of looking at each other's human rights -is a subject which we can keep in play.

J: I'm from the International Trade and Economic Society. The question I would like to ask the Premier is about in Australia's integration with the Asia-Pacific region, what sort of preferential policies do you think can be applied in terms of areas such as customs, market access and so on.

PM: Well I think this is a role we see for APEC. That is, we have to approach the region in trade liberalising terms. Now, we can improve bilaterally access for products and harmonisation of investment rules, in legal frameworks but far better to do it multilaterally. Now this morning with the Vice Premier Zhu Rongji we talked about doing some of that in relation to wool, bilaterally but is better to approach the whole subject multilaterally and outside the GATT context. And you have got to remember that APEC has always been seen by us as a complement to GATT so that basic trade framework comes from GATT but then building on that the possibility of diminishing inhibitions to trade under an APEC umbrella - so that we do get this


close integration of our economies so therefore the opportunities are enhanced and the philosophy of our trade and business picks up.

J: You talked about building a businesslike relationship with China. Are the days over when Australia can talk about having a special relationship with this country?

PM: Well I don't believe in special relationships. I have always thought that was naive for people and we had supposedly had one with Japan which I never believed in and we supposedly had one with China, I never believed in that. I believe in having solid, real, tangible businesslike arrangements but with a

long term focus. But that is not to say that any of these relationships can't be lubricated by friendship and knowing each other better, of course. That is an entirely important component of any relationship. But the belief that nations have, at this distance and with cultural differences, special relationships beyond other countries is, I think, unwarranted and it's also to some extent unhealthy. You end up with a better relationship if you accept the fact that we all have interests and we try and make them meet in the appropriate places.

J: Prime Minister how do you reconcile the statements from the Premier, Li Peng, yesterday that the strongest point of the APEC proposition and the statement last week to Dr Mahathir in support of the economic (inaudible) Do you see the Malaysian position as a sticking point and how would you propose to bring Malaysia into the APEC process?

PM: Well I think there are benefits for Malaysia, the whole of the ASEAN group in the APEC process, but the East Asia Caucus excludes the US which is a major market for many of the North Asian and South

East Asian economies. Therefore, I don't think our proposal - it has benefits which APEC offers and in practical terms the East Asia Caucus proposals and the fact that way offers leadership, economic leadership of the area pretty much to Japan which is not going to be a point of coalescence, I wouldn't think, with China or other major economies in the

area. Now, Japan is our largest trading partner, we have a superb relationship with it but, again, I think Japan would probably take a reserved view about any proposal which excludes the United States, so the breadth of APEC is, I think, its strength and

I think proposals have got to be basically measured against that.


J: (inaudible)... delegates on the subject of...(inaudible)...after your meeting with the Chinese leadership as enthusiastically an idea that you should be...(inaudible)...

PM: No. I mean, I think you have got to understand what we are trying to do here. I mean, this is the creation of an even greater market encompassing half the world's GDP to operate pretty much in economic and trade terms as the G7. And these things are not created overnight. You have got to be naive in the

extreme to think that any one Minister or Prime Minister could visit a nation or country like China which has very clear and acceptable claims of sovereignty in respect of Taiwan and Hong Kong and believes that, presto, they're going to agree to

sign up to a new world body with very substantial executive responsibilities. I mean, like anything that's worthwhile this will be something we will have to work on and I think that the magnitude of it needs to be comprehended where people try and fix a position on the expedition of some of these issues.

I mean, this is a thing of substance and like all things of substance where a larger power like China is involved it will think hard about things. But the

interesting thing is that Premier Li Peng said he wanted our ministries to work on this and I got very much the same readout from Vice Premier Zhu Rongji this morning. Saying that this was something we would have to work on.

J: In the context of the Olympic Bid you said not so long ago that Sydney was 'the' choice because it was a pageant every day there whereas Beijing was not exactly fun city. Just how bad have you found Beijing and under what circumstances could you see Beijing possibly winning and what advantages does Beijing have over Sydney?

PM: Well, I didn't come here for fun. I came here to work. And to treat seriously this relationship. Now, I think Premier Li Peng and I have the right approach to this - that we are friendly rivals

and that the relative merits of our bids will be assessed but again that's a matter for a body in which I don't have any participation.

J: In your talks on wool could you just clarify how ambitious your plans are for .joint ventures. For example, are you just looking purely at the opening up of the wool market of China to Australia, any special arrangements, joint ventures or, in particular, government to government organised arrangements to facilitate this vision you've got?


PM Well look, its clear that we have the ingredients of a new world market if we could put it together, but it is a very big if and it would take some doing. It would have to at least begin by access of Australian wool to the market which then transforms it. We

obviously can't make garments here without the wool. And so therefore there would have to be some change there.

Now, I think what Vice Premier Zhu Rongji said today was that they were prepared to look seriously at removing tariffs and quotas in the context of the development of an Australia-China, if you like, wool

industry. Now, having said that, there would be many sub-questions that one would have to look at; how would such a market be created; how would it work in practical terms; would Australia be involved

in any of the downstream processing? `These are the questions. But, again, it is quite an exciting prospect but whether it could be realised is another matter. Like most things which are valuable, they're mostly difficult, so we look at the principle and then we move from there to see if we can delineate it into something practical.

J. After your talks with the Chinese leadership are you now persuaded that China's economic, political liberalisation is irreversible or do you still see uncertainties that might throw things, including Australia's relations economically, off course.

PM: Well I think there is a very clear and obvious determination in China to continue this process of economic reform and integration with the rest of the world and I do think these are processes which are very hard to reverse because once the people put the

investments in and the economy relies upon the product and the current account relies upon the earnings there is a certain, well, a certain I think imperative that keeps it going.

And obviously the more that China adapts to international conventions in trade and commerce, the more likely those conventions are to have some greater pervasive impact upon its economy and society as a whole. I think it is obviously a good direction for China and I think the Chinese

leadership have been quite wise in piloting that change and I might say this, in economic terms, has obviously been a great success.

J: Yesterday you spoke at some length on multi-culturalism in Australian. Is there a perception of (inaudible) in Australia that is hurting our relationship with Asia in both the cultural and economic terms.

PM: Not that I am aware of in China. I think that certainly in the official family people know about our large migration program and the fact that half the intake comes from Asia. And I think they're also conscious of a substantial Chinese population

in Australia by virtue of the business that is being done from the Chinese community in Australia with Hong Kong and the seaboard provinces of China. So I think people understand that those things exist and that therefore I think it is understood that Australia has a non- discriminatory migration program and that Australia is truly a multi-cultural country.

J: I understand that your Government has been reviewing its defence sanctions taken against China in 1989. Can you tell us what the status of that review is? Are you in favour lifting the sanctions and did you discuss this with the Chinese?

PM: No, I had no discussions with them at all and the restrictions remain on Australia's defence relations with China following the events of June 1989 and basically these restrict the level of defence business to up to 2 star personnel, that's a Major-General, and prohibits shipments and defence sales. Now we periodically review these restrictions, but we're not doing that at the moment and I had no discussions about them on the visit.

J. Did you see China's continued support (inaudible)...., about the successful democratic process in Kampuchea?

PM: No. Kampuchea wasn't discussed. But obviously China's played an important role in the elections in Cambodia and we now have a United Nations sponsored election result and the Parties are now talking to one another in terms of the ongoing viability of the Government and so in a sense that discrete task has been undertaken and we now look to some discussion about a programme of a scheduled withdrawal

following what I think has been a successful execution of the United Nations mandate.

J. What are the risks in taking wool downmarket as a product?.....(inaudible)

PM Well wool is a fibre like any other fibre except it's got to be traded like any other fibre except that it does enjoy a premium quality because of its own technical properties. And that means that any garment made from wool is superior and mostly to a synthetic garment. Now I don't think that anything

in terms of volumes of wool is going to change that. Maybe some of our problems in Australia have come from the view that it should have a premium beyond the willingness of the consumers around the world to meet it and we watched the price rise to 800 cents per kilo for Australian wool and then found that the market wouldn't sustain that price.

What the industry needs, I think, is volume, and it also needs price. And that's why issues in the wool industry are complex, but they will not be solved by simple acquisition scheme of the kind we had before

because in the end it is a competitive world market for fibres and if somebody thinks they can beat the market they might do it for a while, but in the end the market works, as it did in wool. So as I say there is a prospect here and quite an exciting one were we able to put some basic building blocks of that into place. But, again, we will proceed cautiously in looking at the issues, but I think both the Government of China and the Australia Government understand the potential - were one to be able to do it - of creating a new world market

in a commodity which at the moment basically exists by virtue of the fact that it has a premium price and is basically sold in the high fashion end of the world apparel market.

J. (Inaudible) Would you say that China's Relations with Australia has been fully normalised?

PM Well I think all visits help. We had difficulties with the relationship a couple of years ago, four years ago. In that time there have been many ministerial visits, I think nine over the course of this year. Nine Australian Ministers have been here. I had the pleasure of meeting Vice Premier

Zhu Rongji in Canberra last year. I have now come here. That seems pretty normal to me. We'll watch the relationship grow, continue to grow, but again, it will be helped by the greater trade and travel between our two economies, of people and by

businessmen and business opportunities and by institutional changes which even up our economies. All this can only make the Australian-Chinese relationship stronger in the future. Thank you very much.