Australia’s own Great Hall of the People, the great hall at the centre of the Commonwealth parliament, was full on June 21 for the latest VIP visit from China – during which it was forecast that trade between the countries would reach an extraordinary $100 billion this year, up from $85 billion in 2009. Rowan Callick reports.

About 250 top businesspeople from each country were gathered, and a few China enthusiasts like myself. We were welcoming the third member of China’s Politburo standing committee – the nine men who rule China – to come to Australia in just over a year.

Vice President Xi Jinping, who is set to take over from Hu Jintao as general secretary of the ruling communist party in two years, and then lead China for the following 10 years, delivered a very upbeat speech about the relationship.

He set four targets: Deepen the strategic cooperation in energy and resources. Vigorously expand cooperation in emerging industries, especially in green technologies. Steadily push forward the negotiations on a free trade agreement. And jointly oppose trade and investment protectionism.

His enthusiasm is more than diplomatic, it appears heartfelt. This was his fourth visit to Australia. Australian Prime Minister Kevin Rudd spoke in English, in more general terms, and then translated his own speech into Chinese, apologising first for his poor Chinese grammar – bringing the response from Xi that his Chinese was “authentic.”

Australian ministers Stephen Smith, Simon Crean, Martin Ferguson and Wayne Swan also spoke.
Resources Minister Ferguson, who said that Australia would establish a demonstration mine in China showcasing safety technology, said that “China is front and centre of Australia’s many export opportunities.”

But the most important and novel element of this business forum, which lasted for almost five hours, was the quality and engagement of the Australian and Chinese executives who turned up in mid-winter Canberra.
About one in five heads of China’s central government’s 150 vast state owned enterprises was present, and the panellists included Yang Kaisheng, chairman of the Industrial and Commercial Bank of China and Li Lihui, governor of the Bank of China, Fu Chengyu, president of China National Offshore Oil Corporation, and Shen Heting, president of Metallurgical Construction Corp. Mike Smith, the chief executive of ANZ, Craig Dunn, ceo of AMP, Doug Ritchie, the energy and China head of Rio Tinto, and Richard Court, former premier of Western Australia who played a key role in bringing China to become a key buyer of Australian LNG, were among the Australian panellists.

The Australia China Business Council which arranged the event with China’s Commerce Ministry, had pulled off quite a coup at very short notice – but the ready response underlined the enthusiasm for deepening the relationship in both countries’ business worlds.
The Business Council of Australia hosted a round-table discussion, later in the day, for 25 Australian and Chinese chief executives, which they said would be the inaugural meeting, to be followed by regular, similar events. They briefed Rudd and Xi on their discussions afterwards.

China’s ambassador to Australia, Zhang Junsai – three years into his latest, third tour in Australia, making him the country’s top expert on Australia – told me on the eve of Xi’s visit that “the highlight of the relationship is the resources sector,” but it is now on the cusp of extending into manufacturing, services, information technology, and investment in high-tech. “The list goes on...”
He said that Chinese businesspeople “feel very free in Australia, very comfortable, it is a relaxed, flexible, friendly environment, different from quite a few countries in the world. People come here wanting to make money, and they feel there is an opportunity.”
Following Xi’s visit, he said, more Chinese firms will come “just to explore the possibilities.” Continuing such high-level visits was a crucial element to maintaining the relationship even during its rocky patch last year, Zhang said.
The strains emerged from the Stern Hu case, the failed Chinalco move on Rio Tinto, the Rebiya Kadeer visit, and Joel Fitzgibbon’s removal as Defence Minister over his Chinese sponsor.

Now, though, Zhang said, the relationship is “going from strength to strength.” He said: “We shouldn’t be afraid of problems coming up,” since “we have different social systems, different views on international issues, we are different nations, that’s understandable.” But “we can agree to disagree” yet find common ground, “accommodating to each others’ core interests.” And the emergence of such issues was a result, he said, of the extent of the engagement of the two countries.

But Nathan Backhouse, the director of trade policy and international affairs of the Australian Chamber of Commerce and Industry, and recently an Australian diplomat in Beijing, while applauding the presence of so many top executives from both sides, was concerned that they found it difficult to relate since so few of the Australians spoke any Chinese, and some of the Chinese had little English.
He said that although several of the political speakers talked about broadening the economic relationship, “the major message remained stuck on resources.”
Crean had spoken of the importance in the modern business world of investing in the most important markets, in order to understand them more fully. But Backhouse said that barriers had to be lifted in China before Australian firms, for instance in the finance sector, could invest to the degree they wish – and need.

The ANZ chief Mike Smith told the forum that ANZ was hardly a threat to Chinese banks: the ICBC, whose governor Yang Kaisheng was sitting next to him, had more branches than ANZ had employees in Australia.
That just underlines how much work there is still to be done, in the political as well as business realms, to build the basis for bigger engagement between the countries. But there can now be no denying the readiness on both sides to take the relationship on to the next stage.

* Picture: Mr Xi Jinping, Vice President of the People's Republic of China looks while followed by Telstra's CEO, Mr David Thodey during his visit to Telstra's Headquarters in Melbourne on Sunday June 20, 2010.(AAP)

* Rowan Callick is The Australian’s Asia-Pacific Editor