AUSTRALIA-VITAL RELATIONSHIP WITH CHINA.
THERE can be no greater authority on how Labor politicians interact with China - both in and out of office - than Bob Hawke.
The former prime minister’s love affair with the country has continued unabated since he first visited at the dawn of its booming growth era in 1978.
Mr Hawke, who once tearfully let 20,000 Chinese students stay in Australia after the 1989 Tiananmen Square massacre, visits China "five or six" times a year and has an office of his consulting group Robert JL Hawke and Associates Pty Ltd in downtown Shanghai.
"I do a lot of business up here both for Australian companies and for Chinese companies," Mr Hawke told The Australian at the Advance Asia 50 Summit for expatriate Australian businesspeople in Shanghai this week.
"We should welcome Chinese investment."
The Rudd Government yesterday approved a $645 million investment by Chinese state-controlled Hunan Valin Group for 17.5 per cent of Andrew "Twiggy" Forrest’s Fortescue Metals Group.
Mr Hawke is on Fortescue’s China advisory board, formed last year.
"I am delighted about the decision," he told The Australian last night..
The former prime minister’s enthusiasm has been tempered by public debate in Australia over the implications of state-owned Chinese corporations investing in the local mining industry, especially when China is a big resources client.
Concerns have been fuelled over the past week by allegations about Defence Minister Joel Fitzgibbon’s close relationship with Chinese businesswoman Helen Liu.
Yesterday’s Fortescue Metals Group decision came as Trade Minister Simon Crean, in China for talks on a free trade deal between the two countries, urged Australia to be confident about its relationship with China and insisted that Labor has never been Beijing’s "handmaiden".
Labor has accused the Coalition of playing the race card after it suggested the Rudd Government was too close to Beijing.
Mr Crean said the Rudd Government had never tried to hide anything in terms of its relationship with China.
"We’ve got to be confident about the nature of the relationship, not fear it.
"People who whip up xenophobic feelings do not serve the country well," Mr Crean said.
"At no stage have we been handmaidens to the Chinese. It’s been a constructive dialogue both in opposition and in government and that’s the way we’ll continue to conduct it."
Mr Hawke said there were some similarities between China’s push to invest its foreign reserves in other countries including Australia and the Japanese program in the 1970s and 1980s.
"Back then when the Japanese were investing there were questions about the appropriateness of it," he said. "It obviously made sense at the time; it helped our growth. I take exactly the same view now." Mr Hawke said last Friday’s decision by Treasurer Wayne Swan on the advice of the Defence Department to reject the planned $2.4 billion 100 per cent takeover of OZ Minerals by China’s Minmetals because the key asset, the Prominent Hill mine, was in the protected area around the Woomera weapons testing range was "completely understandable".
"I think the Chinese will understand that absolutely," Mr Hawke said.
"There is no way the Chinese would let Australia or any other country’s mines operate in their security sites.
"But I don’t think that is any indication of what they will do on Chinalco (which has applied for a $28 billion stake in Rio Tinto). It will mean jobs and wealth, that’s my view. We want to be sure that they won’t be able to interfere with the pricing negotiations and I am sure that will be a condition of any decision if it is a positive decision."
Mr Hawke also backed a push by China’s banks for larger operations in Australia.
"I opened up the Australian banking system to foreign banks; of course I am in favour of it," he said. "Competition is a good thing."
He said his interest in China had ranged across a number of sectors including coal mining, building materials, property and resources.
He chairs Sydney’s privately owned Solar Sailor which last November inked a deal with giant Chinese government-owned shipping company COSCO to build energy-saving structures for its tanker and bulker ships.
Later this month Mr Hawke will attend the Boao Forum on China’s Hainan Island, Asia’s answer to the influential World Economic Forum meeting in the Swiss resort of Davos.
Mr Hawke believes Australian companies have engaged with China "very well", quoting a Trade Department figure that there were 936 Australian investments in Shanghai and the surrounding area at the start of 2008.
"One aspect that is often forgotten is education," he said. "It’s a huge export sector for us. It’s bigger than wool, wheat and meat. Combined it put $14 billion into the economy in 2008. Of all the foreign students in Australia, 23 per cent of them are Chinese.
"Longer term it’s of great significance because these kids are going to come back and be in positions of importance in industry, academic and government.
"It will provide a very solid basis to strengthen the relationship."
Before the Tiananmen Square massacre, Mr Hawke said he had an "incredibly close" relationship with Chinese leaders.
"Well that stopped then (1989) but I resumed the relationship in 1992 when they invited me up here," the former prime minister said.
Mr Hawke said that, comparing the China of 1978 to the China of today, "it is an immeasurably much more different society, much more liberal, people have more freedom".
"Obviously there are things that need to be improved but I thing it is inevitable that the regime’s move to freer society will continue in the years ahead," he said.
