China will tonight issue its strongest statement yet about the political impasse blocking Australia’s ratification of a free-trade agreement between the two nations, with ambassador Ma Zhaoxu warning the deal on offer “should not be allowed to slip through our fingers”.
Mr Ma will tell a meeting of business and political leaders in Melbourne that the free-trade agreement, which the Labor Party and unions oppose in its current form, represents a “hard-won and historic opportunity’’ and a high-water mark in political trust and practical co-operation between the two countries.
“The sooner the ChAFTA comes into force, the quicker it will benefit producers and consumers in both countries,” Mr Ma will tell the Australia China Business Council and China Chamber of Commerce in Australia.
His speech is timed to mark 100 days since the agreement was signed in Canberra.
“In the Chinese tradition, a celebration event should be held for the 100th day of a newborn baby,” he will say in his speech.
The diplomatically worded, though pointed, speech follows the opposition’s refusal to support the agreement unless a more stringent labor market test is inserted to prevent Chinese companies from importing cheap labor at the expense of local workers.
Implementing legislation to ratify the agreement is due to be debated when parliament resumes next month.
The China FTA is one of three major trade agreements the government hopes to conclude as early as the end of this year. Indian Prime Minister Narendra Modi has already contacted Malcolm Turnbull to make clear India’s desire for trade talks to progress and, tomorrow in Atlanta, Georgia, Trade Minister Andrew Robb will enter final negotiations over the Trans- Pacific Partnership with his North American counterparts.
Mr Ma in tonight’s speech is glowing in his characterizing of the proposed free-trade deal with Australia, describing it as a “comprehensive, high-quality and balanced agreement, a milestone in our bilateral ties, marking a historic high in strengthening political trust and practical cooperation between China and Australia”.
The ambassador’s speech goes further than remarks he made in Brisbane this month, when he described the FTA as achieving the highest level of trade liberalization and investment facilitation reached by any agreement made by China.
In tonight’s speech, he gives three reasons for describing the agreement as a “win-win’’.
“It will lend fresh impetus to trade growth; it will create new opportunities to expand two-way investment; it will open up new horizons for people-to-people exchanges,” he will say.
Reflecting on the decade taken to negotiate the agreement, he says: “As a Chinese saying goes, it takes 10 years to grow a tree.’’
To illustrate the opportunities on offer to Australian businesses, the ambassador borrows an example used by Mr Robb: the extraordinary sales growth of health product firm Blackmores into China. “Blackmores … saw its sales to China skyrocketed to $75 million this year from just $2m the previous year. But that might be just like a peanut starter if one thinks about a world of difference that ChAFTA will make after it comes into force. Only then tariffs as high as 35 per cent for Blackmores’ exports to China will be completely removed and the company foresees a further 10-fold increase in its sales to Chinese consumers.
“Blackmores’ happy experience is just one of many success stories of Australian businesses exploring Chinese markets. Fortune favors only the prepared minds.”
Mr Ma reveals that Premier Li Keqiang sent his congratulations to Mr Turnbull on becoming Prime Minister, “stating that China is ready to deepen mutual trust, expand cooperation and enhance multilateral communication and coordination between our two countries”.
“Our bilateral ties are poised to grow even stronger from a new starting point,” Mr Ma will say.
The ambassador will also note that Australia’s decision to sign up to the China-based Asian Infrastructure Investment Bank underlines significant progress in bilateral co-operation. The two countries have agreed to link China’s 21st century maritime Silk Road initiative with Australia’s white paper to develop its north. The two nations recently signed protocols to allow China’s import of live cattle from Australia.
The speech lists nine “No 1s’’ in the developing China-Australia relationship: China is Australia’s largest trading partner, export market, source of imports, source of trade surplus, market for agricultural exports, destination of services export, source of foreign investment in 2013-14, source of tourism income, and source of overseas students.
The ambassador cites research from the ACBC showing that direct trade with China has contributed 5.5 per cent to Australian GDP, double that of agriculture, forestry and fisheries combined, and almost 200,000 Australian jobs depend on direct exports to China.
Despite the slowdown in the Chinese economy, the ambassador says it still grew at 7 per cent in the first half of this year and, according to IMF statistics, contributed 29 per cent to total world growth.
“Due to sluggish trade worldwide, commodity prices have been declining,” he will say. “That’s why the value of China’s imports decreased. But its physical volume still increased.
“Looking forward, China will adopt a more proactive import policy and place greater emphasis on the quality of imports and exports. China’s overseas investment is on a steady increase.”