DIPLOMACY

Australian Foreign Minister Julie Bishop talks up China trade pact

Canberra's wish, however, might be hampered by new conservative government's move to subject Chinese investment to greater scrutiny

PUBLISHED : Thursday, 24 October, 2013, 4:21am
UPDATED : Thursday, 24 October, 2013, 8:57am
 

Australia is "very keen" to conclude a free-trade agreement with China, says the country's new foreign minister, Julie Bishop, whose conservative coalition government has been accused of seeking to stifle foreign investment since coming into office last month.

"We have a significant trading relationship with China. We are looking to broaden, deepen and diversify that trading relationship," Bishop told the South China Morning Post.

It was Bishop's first visit to Hong Kong as Australia's foreign minister since her government was elected on September 7.

Video: Julie Bishop on Australia-China relations

One sticking point in the new government's plan to deepen trade ties with Beijing is its proposed policy to increase scrutiny of foreign investment.

Foreign investment, especially from China, is a point of contention in Australian politics.

Australian Prime Minister Tony Abbott's coalition vowed during the election to lower the amount at which foreign investment from certain countries triggers an automatic review. Abbott pledged to take the current A$248 million (HK$1.9 billion) threshold to A$15 million, and anything above that amount would be reviewed by the Foreign Investment Review Board, which assesses whether a proposed investment is in the "national interest".

Beijing has told Canberra it wants the limit raised to A$1 billion - the threshold for US and New Zealand investors, according to a recent report by the Sydney Morning Herald.

The proposal was described as "xenophobic" by the opposition and it is still unclear whether the new government will go ahead with it. Australian Treasurer Joe Hockey was equivocal on the issue on his US trip last week, saying: "It's a balancing act and I'm very confident that we will get it right if we are to conclude a free trade negotiation with China."

China is Australia's biggest export market, followed by Japan and South Korea. Abbott's coalition government has pledged an "Asia first" foreign policy, meaning Canberra would make ties with Asian countries, especially China, a priority.

However, in early October, less than a month after the new government was elected, Beijing was enraged by a trilateral statement issued by the US, Japan and Australia that condemned China's "coercive or unilateral actions" in the disputed waters in the East China Sea.

Bishop said the statement was not aimed at Beijing. "We do not take sides on the merits of the claims, but believe that that coercive or unilateral action on any side can be detrimental to stability and peace in the region," she said at the weekend.

The "Asia first" foreign policy faces mounting pressure from international organisations to put the issue of human rights at its forefront. The framework has been criticised as ineffective and WikiLeaks cables have revealed Australian dignitaries felt frustrated by what they saw as unco-operative and dismissive behaviour by China.

However, Bishop said the "framework of the ministerial-level human rights dialogue" was adequate to address human rights concerns in China.

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