Australia-China High-level Economic Cooperation Dialogue Plans to Increase Two-Way Trade

Australian Minister for Trade, Simon Crean, is set to co-chair the third Australia-China High-level Economic Cooperation Dialogue (HECD) to be held in Canberra on Wednesday 22 October. Zhang Ping, Chairman of China’s key economic planning agency the National Development and Reform Commission (NDRC) will represent China’s interests in the talks.

The meeting will focus on a number of issues of mutual interest to China and Australia, including increased cooperation on bilateral and international trade and economic issues, resources trade, clean energy and energy security, as well as transport and infrastructure. Two-way investment opportunities will be discussed, while at the same time covering the topic of China’s economic reform agenda. China is Australia’s most significant trading partner. Trade between the two countries amounted to A$53 billion (US$37.35 billion) in 2007.

Crean emphasized that the talks between China and Australia are particularly timely in the light of the global economic slowdown that has resulted from the financial crisis which originated in the United States. On the agenda will be an exchange of views on the respective governments’ response to the global crisis, along with strategies aimed at limiting the impact on both China and Australia’s economies. Of particular interest to Australia will be the extent to which the increase in domestic consumption in China is likely to affect the long-term demand for Australian exports, of which resources is a key element.

It has been widely reported that Mr. Zhang is confident that, despite the global financial crisis, China is in a position to maintain a growth of around nine percent. This optimistic outlook is mainly due to the drive to increase domestic demand among the 1.3 billion consumers in China. While acknowledging that economic turbulence outside China’s borders is sure to affect the country’s economy, Zhang reiterated that a growth of nine percent is achievable as the country’s domestic market is in itself a large market. China’s economic growth is critical to Australian exports, which have benefited from a strong demand for Australian iron ore and coal.

Discussions between Mr. Zhang and Australian Treasurer Wayne Swan, on Tuesday 21 October, included continuing negotiations on a free trade agreement between the two countries. The discussions began in 2005 and have not yet reached a mutually satisfying conclusion, however, Swan noted that both sides have always been aware that it will take time to settle all the issues of the free trade agreement, but progress is being made.