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China puts foot down over Huawei

John Kerin, FR (Fairfax) | Dec. 19, 2012
The Chinese government has warned Australia risks jeopardising its role in China’s economic transformation unless it stops discriminating against Chinese companies, including telecommunications equipment manufacturer Huawei.

China’s stock of directly held investments was worth $13.4 billion in 2011, ranking it 9th, according to Austrade.

Beijing is still annoyed over the decision by the Gillard government to ban Huawei, which is a private company, from bidding for the $36 billion national broadband network on the recommendation of the Australian Security Intelligence Organisation.

Mr Chen said Chinese companies, whether private or state-owned, operated independently commercially and adhered to market rules.

He hit out at critics who suggested there was too much Chinese investment in Australia, saying as envoy he personally encouraged them to come. “I believe the current stock of Chinese investment in Australia is not too much. We need more Chinese investment and co-operation . . . and many Chinese companies have the positive desire to further pursue growth and development in Australia,” he said.

“But they want to invest in a country with a good environment for overseas investment and good conditions for overseas investors,’’ he said.


Mr Chen said the new leadership in Beijing, led by new Communist Party head Xi Jinping, was committed to a broad-ranging and comprehensive free-trade deal with Australia and he believed there was “political will on both sides to achieve it’’.

Mr Chen said when previous generations of Chinese and Australian leaders signed the agreement in 1972 they could not have imagined how dramatically the relationship would prosper to the benefit of both countries.

“In 1973 when the first official Chinese trade delegation visited Australia the two-way trade volume was only $100 million. Today it is $120 billion,’’ he said.

“But such figures are not enough to reflect the full potential of this relationship and I believe there are still great prospects for further growth.’’

Mr Chen said he was proud of the achievements.


China is not only Australia’s largest two-way trading partner but Beijing was the biggest source of inbound tourists, despatching 600,000 a year, as well as 160,000 Chinese students in Australia.

“In the next five years or longer, China will continue to grow domestically and it is expected that China will shift from a global manufacturing centre to the world’s most important consumption market. Such a major shift in China’s development provides enormous opportunities for further growth between China and Australia,” he said.

“The prospect for the next 40 years of our relations will be better than what we have experienced in the past four decades.’’

Mr Chen’s comments came as former prime minister Kevin Rudd used a speech in Washington to call for a US-China strategic roadmap to be agreed between the two countries in an effort to reduce the risk of conflict between the Pacific powers.


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