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

Simon Birmingham: Good morning, Fran. It’s good to be with you.

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

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

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

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 trade or foreign minister will, too. We do want to have respectful, positive relationships with all nations where we possibly can. There will be, in terms of friendly nations, such as our relationship with China, points of differences from time to time. They will continue to occur on occasion. And Australia won’t compromise our approach in terms of putting Australia’s national interests first around investment decisions, security decisions, or the like. But we ought to be able to work constructively through those sorts of issues in a respectful 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 strong leadership role in our region. In an economic sense, the cooperation between Australia and China that has helped provide for strong economic activity in our region hasn’t just been good for our two nations, it’s been good for many others in terms of generating more prosperity and lifting people out of poverty.

Fran Kelly: There’s no doubt about that. But it’s also clear that China didn’t think 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 if Australia wanted to normalise relationships it had to, quote, take off the tinted glasses and take a proactive approach to China’s development. Has there been a shift in Australia’s thinking towards China and will we see our government be as critical, publicly critical, on issues perhaps like the South China Sea and the influence Beijing could be exerting, or endeavouring to exert, over Australian politics and universities?

Simon Birmingham: Well a respectful relationship is one where you don’t change your position but, of course, you are always mindful of the way in which you approach public commentary about one another. Our position in terms of security matters is well outlined in our Foreign Policy White Paper and there aren’t any changes in that regard. We urge for appropriate dialogue at every opportunity. We urge for proper engagement in the region that respects the sovereignty of other nations. We welcome the opportunity to work in terms of growing investments within our region, including infrastructure that can help other nations grow and to foster further economic growth. But, as we’ve always said, that investment needs to be sustainable for those nations, it needs to be undertaken in ways that respect the sovereignty 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 where you are. Do you think those companies could actually benefit from the trade dispute between Beijing and Washington? This is perhaps why China is reaching out to trading partners like Australia.

Simon Birmingham: Well in a short-term sense there are always possible opportunities when one country jacks up the tariffs on another, for a third country to step in with more cost-competitive goods to be able to fill that void. But that is a short-term thing. For the two largest economies in the world to be engaged in a trade war, to be going down a protectionist pathway, is bad for overall global economic growth. And that’s why we’ve been very clear in our position all along that we do not approve or support the US actions of increasing tariffs in a unilateral way on Chinese goods. We would urge the parties to engage in dialogue. We appreciate there are some genuine issues that underpin this. But we welcome the fact that, just yesterday, President Xi in his speech to open the Import Expo made it very clear that China is committed to working through the World Trade Organization and the usual rules-based system. But to improve some of those rules, we encourage China to engage and to look at some of the terms that, for example, Australia and other nations have successfully negotiated through the recent Trans-Pacific Partnership agreement that modernise e-commerce and digital trade and really provide a platform for addressing, perhaps, some of those US concerns. And we hope that ongoing dialogue, that President Trump has indicated will occur between China and the US, can head off any further increase in those tariffs and 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: the import tariffs, the intellectual property theft, for instance. Do you believe President Xi that China will be more open? I mean they have been promising this for a long time and it’s still very difficult for Australian companies to get access to that market.

Simon Birmingham: China has taken enormous steps over the 40 years since President Deng Xiaoping announced the process of opening and reform, but especially over the last couple of decades. And, indeed, in terms of access to the Chinese market for Australian goods and services and businesses, as I said at the outset that’s been supercharged by the China-Australia Free Trade Agreement. And we want to make sure that we take every opportunity within that agreement to keep building upon the relationship. There were very positive announcements yesterday by President Xi about education, healthcare services – they would be further opened up. We welcome that. Of course, Australia already has enormous education trade in China, in particular with Chinese students coming to Australia. But there are great opportunities for Australian education institutions to be able to do more in-country, in China. And we hope that those opportunities are realised. We also welcome the fact that President Xi indicated there would be further protections in relation to intellectual property, and that was something 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 people yet, but China was unhappy when the Australian Government banned Huawei from having anything to do with the new 5G network. Last week, Mike Burgess, the Director-General of the Australian Signals Directorate said that high risk vendors, which was interpreted as code for Huawei, would threaten Australia’s national interest and critical infrastructure if it was allowed to help build the 5G network. Have you been lobbied in Shanghai to reverse the ban on Huawei?

Simon Birmingham: Not on 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 5G network aren’t targeted towards any particular company or country. They’ve been taken in terms of adopting a principled stance, that is just very clear that we won’t sanction companies who may be under the direct influence or control of a foreign government. That’s a clear approach the Government has taken in terms of its stance. And we emphasise, though, that Australia is a very open country when it comes to foreign investment. We will say ‘no’ occasionally to certain investments that may not be seen to be in Australia’s national interest. We will 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 are still a very open and welcoming country when it comes to foreign investment. We have seen that grow in terms of Chinese engagement in Australia as well as, increasingly, Australian investment in China, which is to be welcomed and we hope will continue.

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

Simon Birmingham: Thank you, Fran.

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