Interview on RN Breakfast with Fran Kelly

Fran Kelly: More signs emerging that Australia's frosty relationship with China of late isstarting to thaw. Foreign Minister Marise Payne will travel to Beijing thisweek for official talks with her Chinese counterpart, the first on Chinese soilin more than two years. It will cap off a tricky period which has seen the twocountries at loggerheads over Chinese political interference in Australia,Beijing's growing influence throughout the South Pacific, and the FederalGovernment ban on Huawei from building the local 5G network. Trade MinisterSimon Birmingham is in China at the moment attending the huge internationalImport Expo, which is being viewed as an attempt by Beijing to allay foreignconcerns about China's trade practices. Simon Birmingham joins us now fromShanghai. Minister, welcome back to Breakfast.

Simon Birmingham: Goodmorning, Fran. It's good to be with you.

Fran Kelly: You are the first Australian minister to set foot on Chinese soil in anofficial capacity in more than a year. Foreign Minister Marise Payne will alsobe in China this week. Is this a big reset in the bilateral relationship? Isthe diplomatic freeze over? Is that how you see it?

Simon Birmingham: Itis certainly a positive week for the Australia-China relationship. It's apositive week because, indeed, I am here in Shanghai with more than 200Australian businesses and companies that are selling goods, services, valuableproducts to China. We are strengthening the relationship that, at an economiclevel, has gone from strength to strength over recent decades and has reallybeen supercharged since the China-Australia Free Trade Agreement was signed byour Government a few years ago. So we do see really strong progress in that andit is a positive, absolutely, that Marise Payne, our Foreign Minister, will behere later this week for the Strategic Dialogue with her counterpart, ChineseMinister Wang Yi.

Fran Kelly: There's no doubt though there's been irritants inthe relationship and tensions in the relationship in the last couple of years,particularly after the foreign interference laws were unveiled by theTurnbull Government – that really seemed to rile Beijing. New Prime MinisterScott Morrison has tried to recast the relationship last week, as Malcolm Turnbulldid actually in the last days of his leadership. Scott Morrison has said thatAustralia wanted, quote, independent relationships with both China and the US,but one that's based on friendship. Do you get the sense that Beijing ishappier with Scott Morrison as Prime Minister than it was with MalcolmTurnbull?

Simon Birmingham: No, Fran, I wouldn't characterise it in those terms. But,certainly, each leader will bring their own style. And, of course, each tradeor foreign minister will, too. We do want to have respectful, positiverelationships with all nations where we possibly can. There will be, in termsof friendly nations, such as our relationship with China, points of differencesfrom time to time. They will continue to occur on occasion. And Australia won'tcompromise our approach in terms of putting Australia's national interestsfirst around investment decisions, security decisions, or the like. But weought to be able to work constructively through those sorts of issues in arespectful way with China, and we trust that China will do so with us as well.Because we are two successful, mature countries who can play a really strongleadership role in our region. In an economic sense, the cooperation betweenAustralia and China that has helped provide for strong economic activity in ourregion hasn't just been good for our two nations, it's been good for manyothers in terms of generating more prosperity and lifting people out ofpoverty.

Fran Kelly: There's no doubt about that. But it's also clear that China didn'tthink some of Australia's moves in the last year or two had been respectful.But the Chinese Foreign Minister Wang Yi told Julie Bishop back in May that ifAustralia wanted to normalise relationships it had to, quote, take off thetinted glasses and take a proactive approach to China's development. Hasthere been a shift in Australia's thinking towards China and will we see ourgovernment be as critical, publicly critical, on issues perhaps like the SouthChina Sea and the influence Beijing could be exerting, or endeavouring toexert, over Australian politics and universities?

Simon Birmingham: Wella respectful relationship is one where you don't change your position but, ofcourse, you are always mindful of the way in which you approach publiccommentary about one another. Our position in terms of security matters is welloutlined in our Foreign Policy White Paper and there aren't any changes in thatregard. We urge for appropriate dialogue at every opportunity. We urge forproper engagement in the region that respects the sovereignty of other nations.We welcome the opportunity to work in terms of growing investments within ourregion, including infrastructure that can help other nations grow and to fosterfurther economic growth. But, as we've always said, that investment needs to besustainable for those nations, it needs to be undertaken in ways that respect thesovereignty of those nations.

Fran Kelly: Minister, China is engaged in an escalating trade war with the US.There are about 150 Australian companies at the Trade Expo in Shanghai whereyou are. Do you think those companies could actually benefit from the tradedispute between Beijing and Washington? This is perhaps why China is reachingout to trading partners like Australia.

Simon Birmingham: Well in a short-term sense thereare always possible opportunities when one country jacks up the tariffs onanother, for a third country to step in with more cost-competitive goods to beable to fill that void. But that is a short-term thing. For the two largesteconomies in the world to be engaged in a trade war, to be going down aprotectionist pathway, is bad for overall global economic growth. And that'swhy we've been very clear in our position all along that we do not approve orsupport the US actions of increasing tariffs in a unilateral way on Chinesegoods. We would urge the parties to engage in dialogue. We appreciate there aresome genuine issues that underpin this. But we welcome the fact that, justyesterday, President Xi in his speech to open the Import Expo made it veryclear that China is committed to working through the World Trade Organization andthe usual rules-based system. But to improve some of those rules, we encourageChina to engage and to look at some of the terms that, for example, Australiaand other nations have successfully negotiated through the recent Trans-PacificPartnership agreement that modernise e-commerce and digital trade and reallyprovide a platform for addressing, perhaps, some of those US concerns. And wehope that ongoing dialogue, that President Trump has indicated will occurbetween China and the US, can head off any further increase in those tariffsand ideally see the removal of those that have been put on to date.

Fran Kelly:You were in the audience, Minister, for the address by President Xi,promising to open up the Chinese economy, further cutting import tariffs,dealing, as you say, directly with some of those issues raised by the US: theimport tariffs, the intellectual property theft, for instance. Do you believePresident Xi that China will be more open? I mean they have been promising thisfor a long time and it's still very difficult for Australian companies to getaccess to that market.

Simon Birmingham: Chinahas taken enormous steps over the 40 years since President Deng Xiaopingannounced the process of opening and reform, but especially over the lastcouple of decades. And, indeed, in terms of access to the Chinese market forAustralian goods and services and businesses, as I said at the outset that'sbeen supercharged by the China-Australia Free Trade Agreement. And we want tomake sure that we take every opportunity within that agreement to keep buildingupon the relationship. There were very positive announcements yesterday byPresident Xi about education, healthcare services – they would be furtheropened up. We welcome that. Of course, Australia already has enormous educationtrade in China, in particular with Chinese students coming to Australia. Butthere are great opportunities for Australian education institutions to be ableto do more in-country, in China. And we hope that those opportunities arerealised. We also welcome the fact that President Xi indicated there would befurther protections in relation to intellectual property, and that wassomething I know that many in the audience greeted warmly yesterday.

Fran Kelly:Minister, I'm not sure how many sideline conversations you've had with peopleyet, but China was unhappy when the Australian Government bannedHuawei from having anything to do with the new 5G network. Last week, MikeBurgess, the Director-General of the Australian Signals Directorate said thathigh risk vendors, which was interpreted as code for Huawei, would threatenAustralia's national interest and critical infrastructure if it was allowed tohelp build the 5G network. Have you been lobbied in Shanghai to reverse the banon Huawei?

Simon Birmingham: Noton this trip, Fran. I had in previous discussions with some Chinese officials.But we've been very clear all along the decisions taken in relation to the 5Gnetwork aren't targeted towards any particular company or country. They've beentaken in terms of adopting a principled stance, that is just very clear that wewon't sanction companies who may be under the direct influence or control of aforeign government. That's a clear approach the Government has taken in termsof its stance. And we emphasise, though, that Australia is a very open countrywhen it comes to foreign investment. We will say 'no' occasionally to certaininvestments that may not be seen to be in Australia's national interest. Wewill say 'no' in terms of setting rules that limit, as we have in this case,some of the instances in which investment may occur. But ultimately, we arestill a very open and welcoming country when it comes to foreign investment. Wehave seen that grow in terms of Chinese engagement in Australia as well as,increasingly, Australian investment in China, which is to be welcomed and wehope will continue.

Fran Kelly: Simon Birmingham, thank you very much for joiningus.

Simon Birmingham: Thank you, Fran.