.. ity calculations. In the 1980s China stressed the role of developed nations in ensuring peace in an increasingly multipolar world. Australia and Canada were important trading partners for China, but Beijing’s most important relations with the developed world were with Japan and Europe (Bell 1991). For much of its long history, China has had the status of a major power.

As China’s economic stature grows so too will its impact on the security and politics of the region and the world. Its relationships with the United States and Japan will be particularly critical to the stability of the Asia Pacific, and therefore of Australia. China is likely to be among the three or four largest economies in the world in fifteen years, and to be integrated into the international economy through multilateral and regional mechanisms such as the WTO and APEC. Australia continues to support China’s accession to the WTO. Its economic growth and integration has been officially welcomed. It could enhance the prosperity and stability of the region. But a more likely explanation for this pro-China push is Australias national economic self-interests. This is perhaps reflected in the statement made by Rupert Murdoch where he flatly rejected moral considerations in Australias relations with East Timor and Indonesia.

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China will, however, also face challenges as globalization, and the sheer complexity of governing the world’s most populous nation, lead to pressure for change. Political stability will be an important factor in ensuring sustained economic growth and continued international integration. How China manages the Taiwan issue and the special status of Hong Kong will have potentially far-reaching effects for the region, both in economic and security terms. China will remain one of Australia’s key relationships. The Government’s approach to China should be based on shared interests and mutual respect. These principles provide the basis for a realistic framework for the conduct of bilateral relationships, and offer the best prospects to maximize shared economic interests, advance Australia’s political and strategic interests, and manage differences in a sensible and practical way.

However political factors invariably intrude, for example, The one-China policy appears to be a fundamental element of the bilateral relationship, yet Australia has an important separate economic and trade relationship with Taiwan, which is a source of tension within the framework of the one-China policy (MacKerras 1996). In pursuing a productive and broadly based relationship with China, the Government will be seeking to expand cooperation in those areas where the two countries have common interests. As two countries with different traditions, cultures and political systems, there will be some issues on which Australia and China do not share the same view. The Government consequently places a high priority on expanding its bilateral dialogue with China in areas such as defence and security issues, as well as on human rights and consular cases. Yet these relations don’t come without their problems. On the issues of human rights Australia is in a position whereby they trade with countries that don’t recognize the rights of individuals as we do.

The most problematic of Indonesia’s neighborly relations were those with Australia. The tension inherent in the population differential between the two countries in such close geostrategic proximity was exacerbated by the very different political cultures. Criticism of Indonesia in the 1980s and early 1990s by the Australian press, academics, and politicians provoked angry retorts from Jakarta. For example, a story in the early 1980s about corruption in the president’s family in the Sydney Morning Herald (1986) led to a temporary banning of Australian journalists from Indonesia. The implicit long-term Indonesian “threat,” as it appeared in Australia’s defense planning documents, underlined a latent suspicion in Jakarta that Australian policy toward Indonesia was based on fear, not friendship.

This perception constantly had to be allayed by official Australian visits to Jakarta. For example, there were bitter diplomatic exchanges between the two countries regarding unruly demonstrations over East Timor at the Indonesian embassy in Canberra in November and December 1991. Australian Prime Minister Paul Keating made a point, despite domestic criticism, of separating the Dili incident from Indonesian State policy and visited Jakarta in April 1992. Once there, he announced that bilateral ties between the two countries had “deepened and broadened” (Keating 1993). Australia also has important interests in other countries of the Asia Pacific and other regions.

The nature and the weight of these interests will vary over the next fifteen years, as will the resources the Government is able to commit to them. And there is no guarantee that they will always coincide with the Australia-China priorities. As noted in the Foreign and Trade Policy White Paper (1997), Australia recognizes China’s importance in regional and international affairs, and regards it one of our four key partners, (alongside the United States, Japan and Indonesia), forming an increasingly important part of Australia’s political and economic considerations well into the next century. Since 1997 there has been a major strengthening of relations, assisted by a strong program of high-level visits in both directions. The visit by President Jiang Zemin from 6 to 11 September this year is the first ever visit to Australia by a President of China, and reciprocates Prime Minister Howard’s visit to China in March 1997.

Six Australian Ministers have visited China so far this year (former Deputy Prime Minister and Minister for Trade, Foreign Minister, the Defence Minister, the Attorney-General, the Minister for Education, Training and Youth Affairs and the Minister for Justice and Customs). The past three years have seen the establishment of new areas of regular dialogue between the two countries. In defence relations these include regular dialogue; exchanges of defence officials; resumption of naval ships’ visits between Australia and China; and an expansion of the annual disarmament talks to include discussion of broader regional security issues. Other linkages include: an upgrading and expansion of the Joint Ministerial Economic Commission; an annual bilateral dialogue on human rights; consular consultations and implementation of Chinese recognition of Australia as a designated tourist destination. Cultural, legal, scientific and educational exchanges are also increasing people-to-people contacts, and since 1979 all Australian States have established a twinning arrangement with provincial governments in China (Gounder 1995).

On the economic and trade front, there is high degree of complementarily between the Australian and Chinese economies and substantial potential for further growth in bilateral trade and investment. China is currently ranked our fifth largest trading partner, and Australia as China’s eleventh largest bilateral trading partner. Australian investment in China has expanded in recent years, and Australian firms have established a significant and growing presence. The Australian government has been working to advance these interests by improving market access to China. On 31 May 1999 Mr. Fischer, the then Deputy Prime Minister and Minister for Trade, announced that, during his visit to China, Australia had reached in-principle bilateral agreement on key market access issues relating the China’s accession to the WTO (Aggarwal 1998).

The evidence is clear, Australias political appraisal at Chinese communism has changed dramatically since 1945. From an ally in World War 2, to an enemy in Korea and Vietnam and from an ideological assessment of “marauding yellow hordes” ready to invade Australias shores to a friendly regional Nation (partner almost) in the universal drive for economic growth and superiority. This bilateral relationship appears to have subsumed political differences and may well be ushering in a period or international economic and trading conglomerates encompassing hitherto sworn political adversaries.