Chapter 1 - Introduction and conduct of the inquiry
Referral of the inquiry
1.1
On 8 December
2004, the Senate referred the matter of Australia's
relations with China
to the committee for inquiry and report by 15 September 2005. On 13 September 2005, the Senate granted an extension to the
committee's reporting date to 10
November 2005. The first report, tabled on 10 November 2005, concentrated on the trading,
commercial, social and cultural links with China.
This subsequent report, which forms the second part of the committee's report
on Australia's
relations with China,
builds on Part 1 but is primarily concerned with the political and strategic
aspects of Australia's
relationship with China.
Timing of the inquiry
1.2
This is the third inquiry conducted by a Senate committee
into Australia's
relationship with China.
In 1984, the former Senate Standing Committee
on Industry and Trade inquired into prospects for Australia–China trade. In
1996, the Senate Foreign Affairs, Defence and Trade References Committee
examined the wider bilateral relationship including the political relationship,
trade and investment links and social and cultural ties. Since then Australia's
relationship with China
has continued to develop and grow.
1.3
As noted in the report tabled last year, the committee
believes that at a time of such rapid economic and political development in China
and the broader region, it was timely to review Australia's
relationship with China.
The following terms of reference recognise that economic, political and strategic
factors are intertwined.
Terms of reference
1.4
The terms of reference for the committee's inquiry into
Australia's
relationship with China
are set out below:
- Australia's
economic relationship with China
with particular reference to:
- economic developments in China
over the last decade and their implications for Australia
and the East Asian region;
- recent trends in trade between Australia
and China;
- the
Australia–China Trade and Economic Framework and possibility of a free trade
agreement with China;
- ongoing
barriers and impediments to trade with China
for Australian businesses;
- existing strengths of Australian business in China
and the scope for improvement through assistance via Commonwealth agencies and
Australian Government programs;
- opportunities
for strengthening and deepening commercial links with China
in key export sectors;
- Australia’s
political relationship with China
with particular reference to:
- China’s
emerging influence across East Asia and the South
Pacific;
- opportunities for strengthening the deepening
political, social and cultural links between Australia
and China;
- political,
social and cultural considerations that could impede the development of strong
and mutually beneficial relationships between Australia
and China; and
- Australian responses to China’s
emergence as a regional power with particular reference to:
- China’s
relationships in East Asia, including in particular the Korean
Peninsula and Japan;
- the strategic consequences of a China-ASEAN free trade
agreement;
- China’s
expanded activities across the South West Pacific.
Conduct of the inquiry
1.5
The committee sought views from a range of people and
organisations including: sectors of the business community who have or would
like to establish commercial links with China; Chinese companies who have
business ties with Australia; mutual friendship associations both here and in
China; organisations and associations interested in fostering links between the
two countries; academics with expertise in East Asia and the South Pacific; and
people who are concerned about Australia's future relations with China.
Advertisement
1.6
The committee advertised the terms of reference and
called for submissions in The Australian on a number of occasions
leading up to the close of submissions on 24 March 2005.
Submissions
1.7
The committee received 81 public submissions which are
listed at Appendix 1. A late submission numbered P82 was received by the committee after it had presented the first
part of the report and is recorded at Appendix 1.
Public hearings
1.8
The committee held nine public hearings in Canberra,
Melbourne, Sydney
and Perth. A list of the
committee’s public hearings, together with the names of witnesses who appeared,
is at Appendix 2.
1.9
The last hearing held, on 13 September 2005, took the form of a roundtable where Australia's
leading experts discussed China's
emerging influence in the region. A copy of the agenda paper is at Appendix 4.
Members of the
roundtable giving evidence in Parliament House on 13 September 2005.
Background to the report
1.10
The first report detailed China's
emergence as an economic and political force on the world stage. It noted that Australia
has been drawn very strongly into China's
orbit of influence, that strong economic links now bind Australia
to China and
that many people-to-people links further buttress the relationship. China
has also indicated that it would like Australia
to be a partner as it continues to take a leading role in world affairs.
Structure of the report
1.11
Concerns were raised in the first report about the
extent of influence that China
may exert over Australia.
Some argued that 'China
matters more to Australia
in terms of trade than the other way around'.[12]
They fear that intent on maintaining good trading links with China,
Australia may
compromise on matters of principle so as not to upset the relationship.[13]
1.12
This second report is also concerned with China's
growing influence but takes a much broader perspective. It looks at China's
foreign policy and its military modernisation program and examines its effect
on other countries in the Asia-Pacific region and the implications for Australia.
It has 11 chapters:
Chapter 2 provides an overview of China's
foreign policy. It highlights the factors underpinning these policies, the Chinese
government's ambition of a 'peaceful rise', and other nations' response to China's
actions and rhetoric.
Chapter 3 looks at China's
rapidly expanding influence in East Asian bilateral and multilateral fora. It
reviews China's
key bilateral relationships in East Asia and the
implications of its recent participation in fora such as the East Asia Summit.
Chapter 4 examines China's
key bilateral relationship with the United
States. It considers the growing anxiety
among U.S.
strategists about what they perceive as China's
unfair trade advantages, undiscerning capture of foreign energy supplies and
new-found enthusiasm for regional multilateralism.
Chapter 5 considers the China–U.S. relations in the broader
regional context and seeks to understand the complex web of relations in East
Asia and how smaller countries, such as Australia,
are adjusting to changing circumstances as China
and the U.S.
work out their relationship.
Chapter 6 discusses China's
new defence policy which aims to increase the competency of its armed forces.
It explores China's
need for improved defence capabilities, the policies underpinning its military
program, and the way it informs the rest of the world about its defence
spending and strategic intentions. The committee is particularly interested in
the transparency of this information.
Chapter 7 focuses on the tensions across the Taiwan
Strait. It reviews the history of Taiwan's
present political status, the primacy of reunification in China's
foreign policy, the changing political environment in Taiwan
and China's
response to these developments. The chapter then considers some of the
difficulties facing both Australia
and the US in
their support for maintaining the cross-strait status quo.
Chapter 8 is concerned with China–Japan relations, another
area of growing tension in China's
foreign relations. It looks at several recent incidents including the dispute
over oil and gas resources, the Japanese Prime Minister's visits to the
Yasukuni Shrine and Chinese anger over a Japanese history textbook's
downplaying of Japan's wartime atrocities.
Chapter 9 explores China's
important role in multilateral efforts to resolve the North Korean nuclear
issue. It presents a chronology of the five rounds of 'Six-Party talks' from
August 2003 to September 2005 involving North
Korea, the U.S.,
China, South
Korea, Japan
and Russia. The
focus is on how China
has balanced its support for the Pyongyang
regime with the fears it shares with the U.S.
that North Korean nuclear weapons may lead to arms race in East Asia.
Chapter 10 concentrates on the diplomatic activities of Taiwan
and China in
the Southwest Pacific, especially in light of the one-China policy. It considers
the underlying motives for their presence in the region and the effect that it
is having on the islands' development. It looks in particular at the operation
of China and Taiwan's
aid programs and their involvement in the Pacific Islands Forum.
Chapter 11 concludes the report with an Australian
perspective on these issues. It asks: what are the strengths and opportunities
for the Australian government in its strategic and political relationship with China?
What are the potential problem areas for the Australia
government, particularly as its relations with third parties affect Chinese
perceptions and interests?
Acknowledgments
1.13
The committee thanks all those who contributed to the
inquiry by making submissions, providing additional information or appearing
before it to give evidence.
1.14
The committee takes particular note of, and commends, the
work of three interns who were placed with the committee secretariat or with the
committee's chairman and who produced well researched and high quality papers
on matters dealing with China and the region. The committee wishes Ms Thuy Thu
Le, Mr Daniel Macpherson and Mr Cameron Reid well in their chosen careers.
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