Caixin
Sep 24, 2019 05:33 AM
ECONOMY

China’s Economic Might Requires New Trade Rules, Australia’s PM Says

Australian Prime Minister Scott Morrison. Photo: Bloomberg
Australian Prime Minister Scott Morrison. Photo: Bloomberg

(Bloomberg) — Global trading rules must be overhauled to reflect China’s growing economic might, Australia’s Prime Minister Scott Morrison plans to say Monday in a key speech during his visit to the U.S.

“China’s economic growth is welcomed by Australia, and we recognize the economic maturity that it has now realized as a newly developed economy,” Morrison will tell a business audience in Chicago. “The world’s global institutions must adjust their settings for China in recognition of this new status.”

The comments come amid Morrison’s six-day visit to the U.S. as he seeks to expand defense and economic ties with Australia’s main ally. They’re in contrast with the more hawkish stance of President Donald Trump, who is conducting a trade war against China and on Friday hosted talks in the White House with the Australian leader where they discussed the Asian nation’s rise.

“China is a threat to the world in a sense, because they’re building a military faster than anybody and, frankly, they’re using U.S. money,” Trump told reporters at a joint press conference with Morrison on Friday.

In his Chicago speech, Morrison indicated he’s heeded Trump’s call for reform of the global economic system. The U.S. president has said China and other nations have unfairly benefited by exploiting trade imbalances that have damaged American manufacturing and exports.

“We cannot pretend that rules that were written a generation ago remain appropriate for today,” according to Morrison. “It is clear that global trade rules are no longer fit for purpose.”

Morrison is seeking to balance the demands of the U.S. alliance with China’s status as Australia’s largest trading partner. Still, both he and Trump are concerned that Beijing’s strategic ambitions are broadening from the South China Sea to the South Pacific and could eventuate in the establishment of a naval base that would greatly enhance China’s military reach to Australia’s doorstep and toward the Americas.

Australia’s ties with China have come under pressure after Canberra passed laws last year aimed at halting Beijing’s meddling in national affairs, as well as banning Huawei Technologies Co. from helping to construct a new 5G network.

Those strains, along with the negative effects of the trade war, are displayed in data showing that growth in tourist and student visitors to Australia from China have flat-lined.

Earlier on Monday in the Australian capital of Canberra, China Ambassador Cheng Jingye said Beijing wanted to work with Australia to uphold the multilateral trading system, keeping the World Trade Organization at its core.

China will seek ways of “contributing to global development and upholding international order,” Cheng told a function to celebrate the 70th anniversary of the founding of the People’s Republic of China.

Addressing recent tensions in the Australia-China ties, he said there was “no excuse to have relations hindered or damaged.”

“We need to regard each other’s development as an opportunity rather than a threat, so that mutual trust will be persistently increased and suspicions of prejudice be reduced,” Cheng said.

Morrison is scheduled to leave for New York later Monday, where he will hold bilateral meetings with global leaders on the sidelines of the United Nations General Assembly, which he will address on Wednesday before returning to Australia.

Contact editor Yang Ge (geyang@caixin.com) 

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