Opportunities and challenges: Australia's relationship with China

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Opportunities and challenges: Australia's relationship with China

10 November 2005

© Commonwealth of Australia 2005
ISBN  0 642 71549 1

View the report as a single document - (PDF 9029KB)

View the report as separate downloadable parts:

Members of the Committee (PDF 130KB)
Terms of Reference (PDF 192KB)
Acronyms and abbreviations (PDF 168KB)
Executive Summary and recommendations (PDF 1581KB)
China and its Provinces (PDF 84KB)
Chapter 1 - Introduction and conduct of the inquiry (PDF 761KB)
Referral of the inquiry
Timing of the inquiry
Terms of reference
Conduct of the inquiry
Public hearings
Visit to China
Structure of the report
Chapter 2 - Economic developments in China (PDF 406KB)
Background to China's economic development
Recent economic performance
Maintaining economic stability in a rapidly changing economic environment
Maintaining political and social stability as China opens up to the world
Inequality between rich and poor
China's energy and resources needs
Environmental degradation
External threats
China's growing importance and the need to understand the nature of change
Chapter 3 - Trading links between Australia and China (PDF 1106KB)
Background to Australia's trading relationship with China
Diplomacy and trade
China's growing importance as a trading partner
Complementarity in trade
Trade deficit with China
Chapter 4 - Barriers to trade (PDF 739KB)
From planned economy to market economy
Tariffs and import quotas
Doing business in China
The influence exerted by the Chinese government in the marketplace
State-owned enterprises (SOEs)
Corporate governance
Corporate governance—Australia
Legal and regulatory framework for foreign enterprises
Specific problems in the current legal system
Contract law
Intellectual property (IP)
Local government interference—'the mightiest dragon cannot crush the local snake'
Suitable mechanisms
Chinese companies in Australia
Barriers to trade with Australia
Chapter 5 - Trade in agriculture (PDF 465KB)
Recent developments in China's agricultural sector
Recent developments in China's rural incomes and trade policy
Australia–China trade in agricultural products
The role of Australian government agencies in agricultural trade with China
The impact of free trade on Australian agriculture
Quarantine and 'beyond the border' issues for Australian exporters
Chapter 6 - Trade in manufactured goods (PDF 604KB)
Recent developments in China's manufacturing sector
The changing composition of China's manufactured exports
The growth and impact of China's machinery and electronics exports
Australia–China trade in manufactures
The deficit with China in elaborately transformed manufactures (ETMs)
Australia's imports from China
Australia's exports to China
Australia's car and TCF industries
Attitudes of Australian manufacturers to China
Fair and unfair advantages
Responding to China's manufacturing sector
The committee view on prospects and options for Australian manufacturing
Policy recommendations
Chapter 7 - Trade in minerals and energy (PDF 384KB)
China's demand for minerals and resources
China's domestic capacity
Australia as a producer of minerals and resources
China's concern with dependency on overseas supplies and energy efficiency
Security of supply an important consideration
Australia's reputation as a supplier
Energy efficiency and conservation
Liquefied natural gas (LNG)
Iron ore
Licence requirement—example of trade barriers
Other important export commodities
Australian investment in the minerals and resources sectors in China
China's investment in the minerals and resources sectors in Australia
Chapter 8 - Trade in services (PDF 475KB)
The term 'service'
Statistics on investment and services
The service sector in China
Opportunities for Australian companies to trade in services with China
Financial services sector
Stock market
Chinese students in Australia
Education services in Australia
Securing the reputation of Australia as a safe place
Arrangements for student entry to Australia
Joint ventures
Recognition of qualifications
Providing education services in China
Approved Destination Status (ADS)
An attractive destination
Australians visiting China
Chapter 9 - Investment (PDF 312KB)
Foreign investment in China
Australia investing in China
Barriers to investing in China
Legal framework
Multiple layers of regulation
Mandatory use of local labour service companies and dispute resolution
Restrictions on travel to conduct business in China
Opportunities for investment in China
China's 'go global' strategy
Chinese investment in Australia
Restrictions on travel to conduct business in Australia
Chapter 10 - Bilateral or multilateral agreements? (PDF 297KB)
What is a free trade agreement?
The benefits of FTAs
The pitfalls of FTAs
Strategic concerns
The progress of multilateral negotiations
Chapter 11 - The proposed Australia–China free trade agreement (PDF 446KB)
Satisfying the conditions for an Australia–China FTA
The early debate in Australia on an FTA with China
Market economy status and anti-dumping laws
Australian anti-dumping rules
The decision to award China market economy status
Australian opposition to China's 'market economy status'
The Australia–China Trade and Economic Framework
Modelling the FTA
Product / service
China's tariffs (over 10 per cent)
Australia's tariffs
The progress of negotiations (October 2005)
Chapter 12 - Attitudes to the proposed FTA (PDF 425KB)
Support for the FTA
The National Farmers Federation
Australian mining representatives
Opposition to the FTA
The horticultural industry
Australian manufacturing representatives
Agricultural issues
China’s opposition to aspects of Australia's trading system
Australia's concerns with China's labour standards
Will an FTA with China work and is it in the national interest?
Chapter 13 - Building a better trading relationship and strengthening ties (PDF 320KB)
Australia's reputation as a trading partner
Business practices in China
Relationships (guanxi) and building a business in China
Assisting Australian companies to understand the Chinese business world
Understanding the market in China
Chapter 14 - Human rights (PDF 431KB)
Points of agreement
Human rights in China
Australia's human rights dialogue with China
Criticism of the effectiveness of the human rights dialogue between Australia and China 
A stronger approach
Australia—setting an example
Labour standards in China
Labour standards and Australian companies operating in China
Corporate Code of Conduct
Chapter 15 - Promoting 'China literacy'? (PDF 371KB)
Do Australians need to be 'China literate'?
Australia's capacity to deliver 'China literacy'
Policy responses
Organisations promoting China literacy
The Confucius Institute
Suggestions for improvement
Broader government strategy
Sector-specific suggestions
Tertiary education
Findings and recommendations
Chinese students in Australia
Chapter 16 - Public diplomacy, culture and sport, and the Chinese-Australian community (PDF 368KB)
Cultural interaction and public diplomacy
Fostering Australia–China relations
Promoting China in Australia
Promoting Australia in China
The WASO – A case-study in soft diplomacy/cultural exchange
Other links
General sporting links
The 2008 Beijing Olympic Games
Getting the message across?
The contribution of Chinese-Australian community groups
Recognising our Chinese–Australian history
Recognising and appreciating the Chinese community in Australia
Chapter 17 - Science and technology (PDF 325KB)
Chinese science and technology
Sino-Australian linkages in science and technology
The extent of current linkages
The flow-on benefits
Strong foundations for building the relationship
The scientific community's role in promoting goodwill and understanding
The potential for closer relations
The right place at the right time?
The way forward
Chapter 18 - Political links (PDF 2090KB)
Political visits and exchanges
Exchanges between future leaders
Cross jurisdictional policy cooperation
Sub-national government links
State and territory governments
Local governments
Sub-national linkages—working together effectively?
Non-government organisations
NGO relations with China
The benefits of NGO relations
Additional Comments by Australian Democrats (PDF 171KB)
Appendix 1 - Public Submissions (PDF 190KB)
Appendix 2 - Public hearings and witnesses (PDF 195KB)
Appendix 3 - Additional information, tabled documents and answers to questions on notice (PDF 245KB)

For further information, contact:

Committee Secretary
Senate Standing Committees on Foreign Affairs, Defence and Trade
PO Box 6100
Parliament House
Canberra ACT 2600

Phone: +61 2 6277 3538
Fax: +61 2 6277 5818
Email: fadt.sen@aph.gov.au