China delivers trade warning amid strain on ties

PM plays down China envoy’s warning our ties with Beijing are being damaged by “systematic, negative remarks’’.

China’s envoy to Australia, Cheng Jingye, at the Chinese Ambassador's residence in Canberra. Picture: Kym Smith

UPDATED: China’s ambassador to Australia has warned that the relationship between the two countries has been marred by “systematic, irresponsible and negative remarks” about China, and trading ties could be damaged if the situation is not repaired.

In a frank interview with The Australian at the Chinese embassy in Canberra, Cheng Jingye said Australia needed to do more to “increase mutual trust” in its ties with China.

“If there is a growing lack of mutual trust, in the long run it may have some undesirable impact (on trade relations with China),” Mr Cheng said.

Speaking in London, where he is attending the CHOGM summit, Malcolm Turnbull played down Mr Cheng’s threat, with an assurance that Australia and China shared a strong relationship that was getting better.

“We have a very strong economic relationship with China, in fact it’s strengthening all the time,” Mr Turnbull told reporters.

“From time to time there are differences in the relationship, if there are ups and downs, it’s from a very, very high base,” the Prime Minister said.

While the ambassador did not single out any area of trade that could be affected, he said there were already concerns that some Chinese students in Australia had been subjected to “irresponsible and malicious allegations” and “security and safety incidents”.

He said one safety incident had occurred in Canberra and there had been others on campuses around Australia.

The ambassador said the strains in the relationship between Australia and China had been particularly evident since the second half of last year.

Asked about Mr Cheng’s complaints about “nasty” things being said about China, Mr Turnbull joked that the ambassador “must have been talking about the media” and asked if journalists had “taken it personally”.

Mr Turnbull last year announced major new security laws aimed at protecting Australia from foreign interference. ­Although the Prime Minister did not spell out any specific countries, he did use quotes from late Chinese leader chairman Mao Zedong to justify his government’s actions.

PM @TurnbullMalcolm: We have a very strong economic relationship with China, strengthening all the time. We are committed to a stronger relationship and from time to time there are differences but it's always from a high base.

MORE: https://t.co/A33vWR2iE9 #FirstEdition pic.twitter.com/kjywyyOh0i

— Sky News Australia (@SkyNewsAust) April 18, 2018

Mr Cheng rejected suggestions that China was interfering in the political processes in Australia and said last year’s campaign against former Labor senator Sam Dastayari over his dealings with Chinese businesspeople in Australia had been “unfortunately manipulated as a pretext to smear China’s image”.

“As we have said repeatedly, we have no intention nor have we in any way intervened in the Australian political process,” Mr Cheng said.

“Any such accu­sations or ­allegations against China are groundless.”

The ambassador’s comments come as business leaders including Fortescue Metals Group chairman Andrew Forrest have expressed concern at the state of Australia-China relations and urged political leaders to stop their anti-China rhetoric.

Mr Cheng said there was “huge potential” for further co-­operation between Australia and China as China opened up to the outside world and its middle-­income group expanded.

“Unfortunately, over a certain period, especially starting from the latter half of last year, we have seen a kind of systematic, irresponsible, negative remarks and comments regarding China which has caused adverse impact on bilateral relations.

“It is detrimental to the image of Australia in the eyes of the Chinese public. It is something that neither side would like to see.”

Mr Cheng said Australians needed to decide whether they saw China as an opportunity or a threat. ‘Some Australians, a minority, always see China through coloured lenses — totally dark glasses,” he said. “If you have a deep-rooted prejudice against somebody or some thing, you may find everything in a twisted ­manner and you cannot come to a rational judgment.”

Mr Cheng said China was ready to develop further the ­partnership between the two ­nations “but it is important for the ­Australian side to move in the same ­direction”.

“There is a need to do more to help increase mutual trust.”

He said China was working with ASEAN nations to work out codes of conduct in disputed areas in the South China Sea. “Thanks to the joint efforts of China and ASEAN countries, the situation is turning for the better,” he said.

But Mr Cheng said China expected other countries that were not involved to “respect and support the constructive efforts” being made by China and ASEAN to work through issues.

“It is important for countries, including Australia, to support and respect the efforts made by China and the ASEAN countries for a stable situation in the South China Sea.”

Mr Cheng rejected suggestions China was planning to set up a military base in Vanuatu, saying such claims were “a farce, a fabrication” being used by some people to “drive a wedge between China and Pacific Island countries”.

He said China’s relationship with Vanuatu and other countries in the Pacific Islands was open and transparent and beneficial to the local people.

“There are some people who may have regarded the Pacific Islands as their backyard, so they feel uncomfortable about China’s normal relations with the Pacific Island countries.”

In London, Mr Turnbull also said the Prime Minister of Vanuatu Charlot Salwai had

denied the reports.

Mr Cheng said Chinese students in Australia deserved better treatment and a “more friendly and safer environment” so they could be in a situation where they “chose to continue to study”.

He rejected suggestions that the embassy monitored Chinese students studying in Australia as a “total fabrication.”

He said there were more than 150,000 Chinese students in Australia. “Do you think it is feasible?” he said. “How many people do you think we would need to monitor them?”

Speaking at the Boao Forum on China’s Hainan Island last week, Mr Forrest warned that anti-China rhetoric that appealed to the “paranoid voter” could be incredibly costly to everyone living in Australia.

“China has choices, like Australia has choices,” he said.

Former West Australian premier Colin Barnett also said last week that relations with China were at a “low point” and the Chinese “just want to be treated with a bit more respect than they feel they are receiving”.

Former federal treasurer Peter Costello last week labelled Australia’s relationship with China as “strained”, saying Australia went through such periods with China and he hoped the two nations could “patch things up again”.

Mr Costello said the state of the relationship was evident in the lack of high-level Australian ministers attending the Boao forum last week.

Under the strategic partnership between Australia and China, there is expected to be regular high-level visits by political leaders to each other’s countries.

China’s Premier Li Keqiang visited Australia in March last year. Mr Turnbull has not visited China since the G20 meeting in Hangzhou in September 2016.

Mr Cheng rejected suggestions the embassy had rejected any visa applications to visit China by ­Australian ministers or senior diplomats.

“I have checked with my visa section and we haven’t got any visa applications,” he said. “There is no issue on the delay of visas.”

The ambassador deflected questions about the timing of a possible future visit by Mr Turnbull to China.