Turbo-charging Australia’s investment ties with China is the focus of a landmark study being handed to Prime Minister Malcolm Turnbull and Chinese Premier Li Keqiang on Monday, suggesting a level of partnership beyond the current free-trade agreement between the two nations.
It recommends the governments of both countries elevate their current Comprehensive Strategic Partners status to a new and unique phase by formally making it a partnership for change.
With Australia’s economy shifting away from a reliance on resource exports, and China’s economic growth reshaping, an opportunity exists for improved diplomatic ties if both countries pursue reforms in the bilateral relationship.
The study also calls for a high-level policy cooperation on the maritime economy and seaborne supply routes; the creation of a new Australia-China Commission similar to the Australian-American Fulbright Commission; and negotiations to help liberalise investment flows.
It comes just days after the Turnbull Government controversially moved to block the NSW Government sale of electricity distributor Ausgrid to a Chinese Government-owned corporation.
Federal Treasurer Scott Morrison said he had made that decision based on the Australian national interest and out of concern for national security.
The Australian National University report is the first major independent study into the Australia-China relationship, which has the support of both Beijing and Canberra and was jointly conducted with the China Centre for International Economic Exchanges.
Titled the Australia-China Joint Economic Report, the study says a change in attitude and policy could have a dramatic benefit to both countries.
This would manifest in increased trade and a shared interest in the institutions of global governance and 21st-century economic and security challenges.
Creating a new unique diplomatic framework for the Australia-China relationship, it says, will send important high-level signals to policy and business actors on both sides.
Co-author of the report, ANU Emeritus Professor Peter Drysdale, said while Australia and China already enjoyed a close relationship, and opportunity existed to significantly boost it over the coming decades.
“Australia has been a trusted partner in China’s ‘reform and opening’ since the 1980s, and is seen in China as a valuable international testing ground and pilot zone for economic policy reform,” he said.
China is Australia’s largest trading partner with bilateral trade worth more than A$150 billion in 2015, while Australia is China’s seventh largest source of imports and 13th biggest export market.
The China-Australia Free Trade Agreement (ChAFTA) entered into force in late 2015.