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Transcripts from the Prime Ministers of Australia

Transcript 19261

Speech to the Australian Davos Connection Future Summit

Photo of Gillard, Julia

Gillard, Julia

Period of Service: 24/06/2010 to 27/06/2013

More information about Gillard, Julia on The National Archive website.

Release Date: 22/04/2013

Release Type: Foreign Affairs

Transcript ID: 19261

Melbourne

[ACKNOWLEDGEMENTS OMITTED]

It's hard to think of a more timely or fitting conversation for the Australian Davos Connection than a conversation about China, so I'm glad of the opportunity tonight presents.

You're all familiar with the expression “punching above our weight” – that word-picture for Australia's ability to make the most of our relationships on the world stage.

It's an expression which nicely captures an important aspect of Australia's diplomatic history and strategic culture.

In this sense it's not surprising we persist with it and it's an expression I use myself from time to time.

At best it's an image of a feisty, activist polity, boxing smart, overachieving in global affairs; but we should never be misled into thinking of ourselves as outclassed in the world or hanging on for the final bell.

Because yes, in a sense we punch above our weight – but we must also recognise ours is a nation of genuine strategic and economic weight in our own right.

The facts speak for themselves.

We are a world leader and a success story in economic reform, sustained through rising living standards for all.

We've created almost nine hundred thousand jobs during the worst of global economic times.

We have the twelfth largest economy in the world today.

When we understand these facts of our strength, we can appreciate the opportunities of the coming years.

We can be a leading nation in the world – as you saw in our decisive election to the United Nations Security Council – as you will see again when we host the G20 in 2014.

We can successfully maintain an alliance with the United States and a partnership with China – as you saw in our recent diplomatic successes in Beijing.

This is the approach of my Government: to understand our national strengths and employ them in our national interests.

As you know, I've recently returned from my second visit to China as Prime Minister, where I led the most senior Australian political delegation ever to visit there.

We achieved significant results for Australia during this visit: for trade links and financial integration, for bilateral relations and regional security.

Most significant of all, the commitment to an annual leaders' dialogue between the Australian Prime Minister and the Chinese Premier, accompanied by an annual economic dialogue and an annual foreign and strategic dialogue, each at ministerial-level.

This is a landmark in Australia-China relations: a major foreign-policy achievement for our country with enormously significant results for our relationship with China and for our foreign policy overall.

The idea of a strategic partnership with China has long been discussed.

My own view was that this had to be connected to a new “architecture” for the relationship, in other words a formal program of regular bilateral meetings, if the true benefits were to be felt by both China and Australia.

The transition in Chinese leadership provided the key opportunity to get this done.

Our discussions with China began in earnest in April last year when I wrote to President Hu outlining a new proposal.

Foreign Minister Senator Carr took direct discussions to a new level during his first visit to China, in May.

Our conclusion when he returned was that the opening was clearly going to be there to get this done.

Two key decisions followed.

I asked the then-Secretary of the Department of Foreign Affairs and Trade, now Defence Secretary Denis Richardson, to travel to Beijing as a special envoy to follow up the opening we saw at the leadership level with his official counterparts.

We also decided that I would travel to China this year, as soon as possible following the National People's Congress, to create the opportunity for a discussion with the incoming leadership.

The phone conversation I was able to have with new Premier Li following his assumption of office in March secured in-principle agreement that there be a program of bilateral meetings – and that we seek to make this an outcome of our meetings in April.

So the things we achieved in China weren't products of good timing or good chance: these were neither strokes of luck nor strokes of the pen.

Our patient pursuit of a key national objective over the past year meant that by the time we departed for the Bo'ao Forum, we knew it was likely we would have good news for Australia on our return.

Australia has fully earned the diplomatic successes of the past fortnight.

We should celebrate this – but we shouldn't be surprised by it.

In truth our success is the logical consequence of our position in the world and the work we have done to make the most of it.

This serves as a valuable example of the strengths of Australia's standing in the world – and perhaps it also offers a “counsel of moderation” to some currents of thinking and debate at home.

Just after the announcement of the leaders' dialogue, I was asked by one Australian what we brought to the table with China, aside from a “whole lot of iron ore” – a telling question and one representative of a strand of opinion at large.

Now, of course a rapidly urbanising nation like China finds mutual interests with a resource-rich country like Australia, so our mineral resources are important to China, that's self-evident.

Many countries have coal and iron ore though; we have more.

We have a rule of law and a growing economy and a track record for economic reform.

We are stable and reliable, we're a safe place to live and work.

We have systems in place to support a corruption-resistant business culture.

Our knowledge-based industries and skilled workforce add value like few in the world.

That is all important to China too.

What's more, the urbanisation being experienced by China isn't just an economic trend.

It's a vast, social transformation.

A nation building cities is also a nation living in cities.

This is another reason Australia is important to China.

China's big challenge in the years ahead will be to rebalance economic growth, to diversify its economy and deliver benefits to a burgeoning middle-class – so our skilled people and their expertise are important to China.

Australians bring advice and experience in urban planning and construction.

We are ready to meet the massive demand for skills in areas like water management and sanitation.

And we have public policy expertise in carbon market design, retirement income systems and the provision of health and welfare services.

We're unusually good at these things.

Our world-leading service industries are important to China.

If we just had iron ore and coal, China wouldn't be inviting our banks to trade on the mainland.

If it was all about minerals and gas, China wouldn't be pursuing the trading of our currency.

On April 10 – the first day of direct currency trading – $250 million worth of trade was conducted.

Ten times the value of the indirect trade the day before.

Australia is a leading world economy – and we are a leading country in our region.

If it was all about raw materials, our Navy wouldn't be the first Western partner for live firing exercises with the PLA-Navy.

We wouldn't now be preparing for annual ministerial meetings on foreign and strategic issues – or for strategic policy exchanges.

Just as Australia has a diverse and resilient economy with a strong future beyond the peak of the mining investment boom – so our relationship with China is broader than our resource trade and our importance to China is not simply that of an energy supplier.

Knowing that China is Australia's largest trading partner is an important part of understanding Australia's future – that's true.

Knowing that Australia is China's seventh-largest trading partner is also a very important part of understanding Australia's place in the world.

So we are not, indeed we have never been, simply a quarry or a beach; ours is a diverse and sophisticated economy and a valued trading partner with the biggest global economies.

Talking ourselves down doesn't help us achieve our goals and it isn't well grounded in the facts either.

Neither is our nation presented by insoluble strategic challenges or problems we don't understand and can't confront.

Quite the contrary.

We have a strong alliance with the United States and we advocate clearly and in measured terms for the contribution our alliance makes to strategic stability and growing prosperity for every country in Asia.

We have just agreed to a level of dialogue with China enjoyed by a handful of nations: China has just four other such annual bilateral dialogues and we have only a few relationships involving this degree of engagement and commitment.

We actively shape our destiny – we do not allow circumstances to dictate our national course.

False modesty at this moment would be just as great a risk as complacency.

Our children would thank us for neither.

What they will thank us for is the self-confidence that allows us to be understand and act on our strengths.

Along with the enlightened knowledge that our present strength does not guarantee us strength in future: all it does is create an opportunity to make the most of this historic moment of change.

The Asian Century has begun.

The return of Asia to economic leadership in the world is the return of an enduring reality in global affairs.

For most of human history, a nation's economic strength essentially reflected its population size.

The nations with the largest populations were the nations with the biggest economies.

The Industrial Revolution changed all that.

For the past two centuries, a few European nations with relatively small populations could boast some of the world's largest economies.

Now, the balance is shifting back: a great renaissance is underway.

The centre of world economic power is shifting to Asia, to nations with immense and growing populations, like China and India.

Population size and economic strength are converging once again.

Measured by purchasing power parity, China is set to become the world's largest economy before 2020 – perhaps as early as 2017.

India's economy is now larger than those of Japan, Germany, Russia.

Six of the nations in the top 10 for economy size are already in the top 10 for population size: China, India, the United States, Brazil, Russia and Japan.

Projections to 2050 show that more than half of the Top 20 economies by mid-century will also be in the Top 20 for population.

This fundamental realignment is inexorable – and it is a challenge to Australia.

Australia has been one of the great beneficiaries of the era that is ending, with our absolute economic size far outranking our relative population.

Yet it's equally obvious the change is a huge opportunity.

The rise of China and India is not only restoring the convergence of population size and economic strength – it is bringing the world's economic centre to our own region, our own time zone, or own doorstep.

The centre of gravity of the global economy is shifting in our direction for the first time in our economic history.

We can maintain our strength in this new era if we understand that advantage and if we seize it with wisdom and determination.

Predicting the future is always fraught with risk – but the greater risk is in failing to shape it.

This is why we must use the strength we have created to shape our future now, at home and abroad.

At home, above all, by properly resourcing all our teachers, classrooms and kids for generations to come.

We know that we cannot win the economic race if we are losing the education race.

So we must deliver a plan to lift standards, improve funding and engage the world.

Abroad, in all we do to make our nation one of the winners in the Asian Century.

Whether it's getting our banks on the ground in China.

Or opening the uranium trade with India.

Whether it's negotiating a comprehensive economic partnership with Indonesia.

Developing our agriculture and food manufacturing to meet the doubling of Asian demand by mid-century.

Or supporting the contribution the United States makes to the peace and stability of our region.

The specific achievements of our diplomacy in China are the working model for how we can deliver.

They also reflect the mood and temper with which we should approach the times.

The self-confidence to recognise our national strength today.

The wisdom to know this is not guaranteed in future.

The vision of what our nation can gain if we make the most of this moment.

The far-sighted plans and the detailed implementation to get it done.

Shaping our national future, not letting events shape us – strong in the world, strong for tomorrow – that's what my visit to China was all about.

That's what the Asian Century White Paper is all about.

All our efforts of the future should be devoted to seizing the opportunity while it lasts.

Thank you.

Transcript 19261