Trade: China’s top diplomat in Australia talks what it will take for Beijing to drop Aussie trade sanctions

Anthony Albanese has yet to respond to a congratulatory message from Chinese Premier Li Keqiang that was sent after Labor’s election victory three weeks ago, China’s new ambassador to Australia has revealed in an exclusive interview with The West Australian. Xiao Qian said the note, delivered hours after Mr Albanese was sworn-in as Prime Minister, was a “very, very friendly gesture” that stated “very clearly that a healthy and stable relationship between Australia and China is in the interests of our two countries”. The Chinese Government’s top diplomat in Australia said the “high level communication” expressed a “strong will” that China was ready to “look into the future and move forward with our comprehensive strategic partnership and relationship in the spirit of mutual respect and mutual benefits”. “I think the message is clear. The gesture is friendly. We are expecting a friendly response from the Australian side and we are still in the process . . . but I think all-in-all we have reasons to believe that China and Australia, we have more common grounds then differences,” Mr Xiao said. “We have reasons to be partners and friends and there’s no reason for us to look at each other as so-called hostilities or even threats or an enemy.” The note was seen as a thawing of a two-year freeze in diplomatic relations. Mr Xiao said he understood there was a process for the new Labor Government to follow but he was optimistic about a “positive reply” from Mr Albanese. A spokesman for Mr Albanese said the Prime Minister does not release details of his private correspondence. At the end of a visit to Perth, the ambassador answered questions about what it would take for trade sanctions on Australian exports to be removed, the future of WA’s lucrative iron ore exports to China, how Beijing views the AUKUS security pact and the fall-out from the recent military jet incident over the South China Sea. TRADE Mr Albanese has taken a firm stance on China in his first weeks as Prime Minister, saying it was “not Australia that’s changed — it’s China” and calling for sanctions on exports such as wine, crayfish, barley and coal to be removed. Mr Xiao acknowledged there were “different views” on the reasons for the damaged relationship, but pointed to the ban on Huawei’s involvement in Australia’s 5G rollout as an example of the “discriminatory” policies of the former Morrison government “in the name of so-called national security”. “Many Chinese businessmen were so much surprised and they were alarmed and they were disappointed,” he said. “Also they were a little bit scared. Today this has happened to Huawei. What about tomorrow? Is it going to happen to me? Is it going to happen to my company?” The ambassador, who was appointed in January, said China required high-quality products and Australia needed access to the Chinese market. He signalled it was up to Canberra to enable an improved “political relationship” for normal trade between the countries to resume. “I think, personally, if we have an improved relationship politically, it will create a atmosphere to relax some of the Chinese businessmen so that (they) can think about coming back, think about resuming their business and trade relations with Australia,” he said. “A good political relation is helpful for trade relations and a bad political relation (is) also affecting our cooperation in other areas as well.” IRON ORE Exports of iron ore have not been impacted by the trade war, with the price of the steel-making commodity continuing to exceed expectations and help the McGowan Government deliver multibillion-dollar Budget surpluses. Asked how long China would keep buying WA’s iron ore, Mr Xiao replied: “It will continue. It’s mutually beneficial. High quality iron ore is so important to China, to China’s industrial development (and) steel industry. This relationship we will go on. “Not only the existing co-operation in the trading of iron ore and other mining products, but also there’s new areas I think both sides could think about tapping into. For example, more green energy to address the climate change issues.” MARK MCGOWAN Mr Xiao said he congratulated Mr McGowan on his “leadership” at a meeting in Perth on Friday when the pair discussed the bilateral relationship. He also met outgoing WA Governor Kim Beazley and his replacement, top cop Chris Dawson. “I congratulated him on his successful leadership, leading this State to be successful in so many areas -- economic development, social harmony and also safety. It’s a beautiful State and city,” the ambassador said. “The development has been the tremendously outstanding given the complicated and difficult situation globally -- the COVID-19 influence etc -- I think it’s something that I feel is very impressive to me.” Mr McGowan has been critical of the Coalition’s handling of the Australia-China relationship and Mr Xiao said the two men had a “very strong consensus that both sides are ready to move on for a more positive, productive and constructive relationship”. HIGH LEVEL TALKS Trade Minister Don Farrell at the weekend extended an olive branch by saying he would issue an invitation to meet his counterpart, China’s Commerce Minister Wang Wentao. If accepted, it would be the first high level meeting between Australian and Chinese officials since 2020. In response, Mr Xiao said country-to-country communication, including at high levels, was an important part of the relationship, but any meetings had to be “constructive” as talks that descended into quarrels “make things worse”. “We have to think about how to make the meeting productive, instead of meeting for meeting’s sake. Usually it’s the diplomatic practice for people to have a working level of preparation to prepare for senior contacts,” he said. Mr Xiao said the relationship between WA and China was a “good example” of how two parties could find “common grounds and consensus” while at the same time hold “different views on certain things” without effecting “mutually beneficial cooperation”. AUKUS Before coming to power last month, Labor threw its support behind AUKUS, the trilateral security pact between Australia, the UK and the US that includes building a fleet of nuclear-powered submarines. Mr Xiao said the Chinese Government did not like the idea of “small blocks that are targeting a certain particular country”, saying AUKUS was contrary to “open, inclusive” regional groupings such as APEC and the G20. “AUKUS, in our view, is targeting China. Trying to stop the existing normal relations and cooperation between China and the relevant countries. The idea is not a good idea,” he said. The ambassador said the security pact between China and the Solomon Islands that rocked the Federal election campaign was about helping the Pacific Islands nation “maintain social stability” by improving living stands and policing. “Upon request from the Solomon Islands, we offered police equipment, we offered a coach to help them to use those equipment (and) train their police forces , but there’s no intention for China to establish military bases in the Solomon Islands or in Pacific Island countries,” he said. PLANE INTERCEPTION Mr Albanese last week denounced an incident in which a Chinese fighter jet released flares and aluminium chaff while flying closely alongside an Australian surveillance plane in international air space over the South China Sea. The Chinese Ministry of Defence later said the Australian plane ignored “repeated warnings” to turn around, a claim Mr Xiao repeated on Saturday, saying he had no further information beyond that account. “A scenario could be that there’s a situation where the Australian plane was either close to or above the Chinese territory and so the Chinese side was feeling kind of a risk of danger or danger itself,” he said. “So they have to do something to warn the other side not to approach too closely. The warning was issued several times but without any effect. That is what happened there. “I think the important thing is for us to understand that we should be careful about such a situation and take measures not to let it happen in the future.” DARWIN PORT LEASE Mr Albanese recently confirmed there would be a fresh review of the ownership of the Port of Darwin, which has been held on a 99-year lease by Chinese-owned company Landbridge since 2015. The ambassador said he respected the domestic policies of the new Australian Government, but stressed that development of Darwin port would “benefit both sides” by linking northern Australia to China and other parts of the world. “I’m looking forward to a positive review and also a positive outcome,” he said.