Our place in the region

2005 started nicely for China-Australia relations when in April, during his fifth visit to China, Prime Minister John Howard announced Australia's recognition of China's full market economy status. Negotiations on an Australia-China bilateral free trade agreement were launched, “marking the start of a new stage of economic relations”, it was said.

However, the diplomat defections in 2005 spoilt the pie. Chinese diplomat Chen Yonglin defected to Australia in late May alleging the Chinese Government had up to 1,000 spies operating in Australia, a claim quickly refuted by the Chinese Government. A former security officer who also defected, Hao Fengjun, came forward to support Chen's claims a few days later. Chen was granted a permanent visa in July: a decision criticised by Beijing.

But all this is small stuff compared with the potential the future holds. Yet it does point out the common practice of nations spying on each other - not a worthy pursuit. How can trust and trade be developed while spying and industrial espionage are accepted practices? It might be common practice but spying is not on.

Australia will begin delivering liquid natural gas to China's Guangdong province next year as part of a $25 billion (US$19 billion) supply contract - Australia's largest-ever export deal. Wu Bangguo, chairman of the Standing Committee of the National People's Congress visited Sydney in May 2005, and began negotiations on a free trade agreement between the two countries.

A deal was struck last April for Australia to sell uranium to China. Meanwhile the Australian Government is also considering selling yellowcake (uranium concentrate) to India. But environmental groups are implacably opposed to any expansion of uranium mining and condemn nuclear energy as dangerous, dirty and costly.

Amid lingering public disquiet over the safety of nuclear power, the government is enthusiastically backing uranium mining. These days governments, even in the most authoritarian of nations, ignore their public at their peril.

However, seldom have governments or businesses considered the long-term effects of their decisions when there is much money to be made. It’s a toss up whether India or China is the best bet so why not go both ways ... neither is a “safe bet”.

The deal was given the green light after China signed a nuclear safeguards document under which it pledged to use the uranium only for the production of electricity. The agreement conjoins Australia's mineral reserves - it has 40 per cent of the world's uranium deposits - with China's aims. This includes building 30 nuclear reactors by 2020 to meet China’s rapidly growing power needs.

But critics say it is very difficult for Canberra to ensure its uranium will not end up being used in the manufacture of nuclear warheads and the sale could consequently lead to instability in Asia and friction with the US.

India

Australia's relationship with India is today driven by India's emerging status as Asia's next big economic superstar along with China. While the Howard Government's first Foreign Affairs White Paper in 1997 did not rank India, six months later India announced itself as a nuclear weapons power with its bomb blasts (1998), rankling that government. In 1997, Australia helped shut the door on India when it tried to join the Asia-Pacific economic forum, when APEC imposed a 10-year moratorium on new members. India was vexed that it had been vetoed by Australia.

However, last year Australia slipped into the new East Asia Summit through India's diplomacy. The ASEAN hosts did not allow China to veto India attending the first summit. Admitting India made it easier to invite a non-East Asia state - Australia (and New Zealand).

Today, India has a permanent place set at the top table which provoked Howard to head to New Delhi last March to carve a path for the future, and bury some negative history.