It is broadly accepted that the Sino-Australian relationship is stronger and runs deeper than ever before. The two nations enjoy growing economic ties and China's expanding energy demand has made this growth even more explicit.

To assess the current nature of the Australia-China relationship, Global Times (GT) reporters talked to Warwick Smith, Chair of the Australia-China Council (ACC) under the Department of Foreign Affairs and Trade in Sydney, on inter-personal links, the prominence of the bilateral relationship and potentials for further development.

GT: Australia has been a main supplier for China's minerals and energy needs. How will mining links shape future trade?

Smith: It (the mining sector) is having a profound impact now on the relationship. But there is one thing that is really important. Resources are finite. What many of us are expecting is that the long-term benefits are the deep understanding, the intellectual connection … the development of services and expertise to build for the future. We're focusing on those things. We are good at solar energy, alternative energy, dealing with harsh environment and water. That will be a huge advantage to China over time. We want to broaden the relationship beyond just finite resources.

Australia basically is quite a small place. The interest China has in Australia has traditionally been around resources and education – although tourism is now rapidly increasing. The relationship has until now been mainly a trade relationship. As it broadens, we will get a deeper understanding for each other.

GT: How are Chinese investments being treated in Australia? Is there any discrepancy concerning China's State-owned enterprises that appear increasingly ambitious globally?

Smith: Australia is seen as a good place to invest. Despite what's happening in the rest of the world, Australia's economy has remained strong. Australia has always welcomed foreign investment. This country has been built on strong support of capital coming into it.

We all have rules. The rules we have here are long-standing ones. But these haven't done anything to diminish the increase in investment.

You have to measure this by the increase in investment by Chinese companies. This rise has largely been centered on resources and agriculture. There have also been some investments in manufacturing and property. I feel confident in saying that strong Chinese investments here will continue to grow in a variety of areas.

Sometimes there is a differentiation between how a State-owned enterprise and a free-standing company is dealt with. That's primarily determined on whether there is clear transparency about their intentions. Most investments have gone ahead.

GT: Through the White Paper on Australia in the Asian Century, the Gillard administration is locking Australia firmly into Asia's future. Meanwhile Canberra and Washington are enhancing their military alliance. Will these moves cause misunderstanding or disrupt ties? If so, why?

Smith: Above all, Australia and China are pragmatic. We know that we are strong trading partners. We are pragmatic about how we are going to develop that trade. We don't want to do anything to disturb that. There is deep compatibility between China and Australia, as manifested by a 40-year relationship. We don't think that anything should stand in the way of that relationship developing. 

Our largest trading partner is China. We want balance in our foreign policy. Historically we have had a very long partnership with the US. That continues. It doesn't affect trade arrangements. The long-term relationship with China gets stronger and stronger. That is why the ACC is focusing on those human links. We have a balanced approach to what we need in terms of foreign policy and a balanced approach in our trade growth.

GT: Should Australia's foreign policy be separate from its trade policy?

Smith: Whenever there is large growth and a major impact, there will always be some caution and reticence from those that think they will be affected. China needs to ensure the world sees its growth as a positive factor. Its growth is not something we need to be concerned about. It is not as though it is doing any other way than partnering with the rest of the world in managing that growth. That needs to be its message. But some interests will feel threatened. You have to understand that. You respond by trying to explain.

China's system of government is very different to Australia's. We respect the two systems and we have been able to develop a huge trade profile and a deeper understanding between China and Australia. So we are a case study in how a country can work together with an emerging economic power in a very positive way. What I have been saying for many years is that Australia has worked out how to get the balance right. It has kept its form of government, its long-term relationships with the UK and the US and emerging countries in balance. We have kept it all in balance. We are an example of how it can be done.

You have to keep all dialogues going. There is a lot about China that Australia doesn't understand and vice versa. But there is a lot of goodwill to get this right.

GT: There is an argument that Australia has to choose between China and the US. What do you think?

Smith: It is just a matter of balance and respecting the relationship and issues that we have with each other. We don't see China in any way as a threat. We see China as our partner in development both in terms of the relationship and business.

GT: Your Council has been supporting Australian studies in China for over 20 years. In what way does the ACC contribute to the unofficial relationship between the two?

Smith: The ACC is designed to deepen links between Australia and China. Our work focuses on several areas, but is primarily focused on education, science, arts and culture. We have Australian Studies Centers in about 25 universities around China, including Renmin University of China and Peking University. The goal is to provide an opportunity for Chinese students to understand more about Australia. It is very important to take a long-term view concerning the development of the relationship. We want to provide more in China about the specifics of Australia. That is a small contribution but overall, in a long period of time, it is a very positive way of taking a bit more of Australia into China.

Australian Studies in China Program
http://www.dfat.gov.au/acc/asp/index.html