Regional security concerns are expected to overshadow lucrative trade ties when Chinese Premier Li Qiang (李強) visits New Zealand and Australia this week, with the mood markedly different from the Chinese premier’s visit seven years ago.
Li is to arrive in New Zealand today, before traveling to Australia at the weekend, the Chinese Ministry of Foreign Affairs said.
Australia is the top supplier of iron ore to China, its largest trading partner, but there is competition for Australia’s rare earths needed for electric vehicles and defense from Western security allies.
Photo: AFP
New Zealand was the first Western nation to strike a free-trade agreement with China in 2008, and China remains its largest export market for milk and agricultural products, with two-way trade of nearly NZ$38 billion (US$23 billion).
New Zealand Prime Minister Christopher Luxon said Li’s visit was an opportunity for businesses to strike deals and there was “massive areas of cooperation with China, particularly in the areas of trade, energy, climate change.”
Differences would also be discussed, Luxon added.
Once a moderate voice on China, New Zealand has toughened its stance this year, calling out Beijing for hacking the country’s parliament and noting the growing threat China poses to security in the Pacific.
“Since 2017, the relationship has moved from one which was primarily focused on opportunity to one that is also concerned about resilience and over-dependency,” said Jason Young, director of the New Zealand Contemporary China Research Centre at Victoria University.
Chinese Ambassador to New Zealand Wang Xiaolong (王小龍) last month told a China Business Summit in Auckland that Beijing was not a threat, cautioning against “groundless accusations, which would erode the precious trust we have built up.”
In Australia, Li is scheduled to visit Adelaide first, where a panda pair are due to return to China, but locals are anticipating their stay to be extended or replacements to be sent.
The panda diplomacy and lunch with wine exporters until recently shut out of the Chinese market would ease a political dispute that led to A$20 billion (US$13 billion) in Australian agriculture and mineral exports being suspended by Beijing between 2020 and last year.
A poll released yesterday by the Australia China Relations Institute in Sydney showed the fallout of the trade blocks was deep public mistrust, with 74 percent of respondents saying that Australia was too economically reliant on China and 71 percent saying that Beijing is a security threat.
Australian Prime Minister Anthony Albanese has said that Li’s visit shows ties had stabilized, even as the two nations compete for influence in the Pacific and defense force encounters are tense.
Australia and China are to sit down in Canberra with a “more realistic attitude of what they have in common,” said Richard McGregor, Lowy Institute senior fellow for East Asia.
“China still sees value in Australia as a reliable supplier of commodities and they are especially keen to head off any efforts to restrict their access to critical minerals, from rare earths to lithium,” he said.
While China was Australia’s biggest customer and an early investor in its mining sector, the US, Japan and Europe are catching up and now want Canberra to restrict Chinese investment, McGregor added.
However, “how do you cut off your biggest customer? And will Australia’s friends make up for the lost income and investment?” he asked.
In Western Australia, Li is expected to tour Chinese company Tianqi Lithium’s processing plant, and Australian mining and energy company Fortescue.
In an opinion article published in the Australian yesterday, Albanese underscored the importance of trade with China and his government’s ambition to cater to global demand for critical minerals with a “made in Australia” policy.
“As more nations draw an explicit link between their economic security and their national security, we will ensure Australia’s foreign investment framework is more efficient and transparent and more effective at managing risk,” he wrote.
Businessman Warwick Smith, who is to attend a business leaders roundtable with Li and Albanese in Western Australia, said that China was likely to raise Australia’s screening of foreign investment, particularly rare earth minerals, as an issue where it wanted partnership.
Australia China Business Council president David Olsson said the council expects China’s remaining trade ban, on seafood, to be lifted, and also hoped for an easing of visas.
“There is a real need for Australian businesspeople to reconnect and refresh their relationships in China,” Olsson said.
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