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UPDATED: December 16, 2014 NO. 48 NOVEMBER 27, 2014
Oceanic Opportunities
President Xi deepens both political and economic ties with Australia, New Zealand and Fiji in a constructive visit
By Yu Lintao

KIWI WELCOME: Chinese President Xi Jinping is welcomed at the airport upon his arrival at Auckland, New Zealand, on November 19 (LI XUEREN)

Chinese President Xi Jinping paid state visits to three South Pacific countries—Australia, New Zealand and Fiji—from November 16 to 23. During his trip, China and Australia not only concluded bilateral free trade agreement (FTA) talks but also decided to elevate their relationship to a comprehensive strategic partnership. By further deepening mutual trust, Xi's first visit to New Zealand and Fiji as Chinese president also heightened bilateral relations.

Lifting ties

The twin upgrades of bilateral cooperation have ushered China-Australia relations into a new era of mutually beneficial interaction, observers said.

"China and Australia established a strategic partnership last year. Just one year later, the two countries have agreed to upgrade bilateral ties to a comprehensive strategic partnership, demonstrating that China-Australia bilateral relations have been continually deepening," said Ma Zhengang, former President of the China Institute of International Studies (CIIS).

According to Ma, the comprehensive strategic partnership is the highest-level political relationship China develops with foreign countries; in the future, China and Australia's strategic relations will not be limited to economic and cultural fronts. Instead, they will expand to political mutual trust over security issues as well as cooperation on regional and international affairs.

"As a result, the level of mutual trust will rise, actively boosting the development of bilateral practical cooperation," Ma said.

Besides the progress made in terms of the bilateral strategic partnership, the establishment of the China-Australia FTA will likely provide the people of the two countries with more tangible benefits.

According to the bilateral FTA, Australia will eventually remove tariffs on all goods imported from China, and a vast majority of Australian products will enter China tariff-free. While Chinese people will have access to much cheaper and qualified Australian dairy products, Australian consumers will be able to purchase more high quality and inexpensive Chinese goods.

In addition, the two sides agreed to grant each other the most favored nation status once the FTA takes effect, which will greatly lower the review thresholds for corporate investment and increase market access opportunities, predictability and transparency for such investment. They have also committed themselves to opening up numerous service sectors to one another.

Ma noted that the two economies are highly complementary, suggesting that the FTA should greatly benefit Australia's bulk commodity exports such as dairy products, red meat and fruits. Meanwhile, China will harvest a great deal of direct investment and labor market access in Australia.

Over the past decades, China-Australia bilateral intertwinement and interdependence have markedly increased on the economic and trade dimension. China is now Australia's largest trading partner, export market and source of imports. Australia, in turn, is China's eighth largest trading partner and an important source of the raw resources. More than 20 rounds of negotiations over the past nine years have put the two sides on the same page regarding what they must do to make full use of the complementarity to boost their respective development.

Bob Carr, former Australian Foreign Minister, held that the FTA makes the China-Australia relationship stronger and deeper.

Carr said in an interview with Xinhua News Agency that the China-Australia FTA will be a major boost for Chinese provincial and Australian state governments in attracting infrastructure investment.

"Chinese investment is significant and the [Australian] states are very keen for infrastructure investment. The states are responsible for building roads, railways, ports, and providing safe and secure electricity network, and there are many areas where the Chinese are looking for partnership," Carr said, adding that Australian farmers will be big winners in the FTA deal.

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