Australia strengthens role as link between US and Asia

China's leader arrived Wednesday, one day after President Bush, to talk trade.

Barely 24 hours after President Bush addressed the Australian Parliament in Canberra, Chinese President Hu Jintao will take the same podium Friday.

Both leaders are traveling down under in large part to strengthen bilaterial economic ties. Thursday, the US and Australia agreed to wrap up a free-trade accord by year's end, while Mr. Hu's four-day visit is expected to bring Canberra closer to another such agreement with Beijing.

The back-to-back visits to Australia by the US and Chinese leaders are the latest boost for Australia's vision of itself as a fulcrum between Asia and the West. That it is Hu, rather than another Asian visitor, enjoying the symmetrical visit with Bush, underlines China's growing economic and diplomatic importance within the region.

The Chinese visit is also an important ratification of Australia's decision in recent decades to reorient itself toward the neighboring markets of Asia - an effort that has faced some recent setbacks.

Earlier this month, the Association of Southeast Asian Nations (ASEAN) agreed to form a European-like economic community by 2020. Australia was not included. One of ASEAN's key leaders, Malaysian Prime Minister Mahathir Mohamad this week suggested that Australia doesn't enjoy warmer relations in East Asia because it sees itself as a regional policeman.

"It's a very important political moment - the visit by President Hu reflects the fact that this Asian giant takes a much more mature view towards Australia as compared to countries in Southeast Asia who prefer to keep making jibes about it being the US's deputy in the region," says Stuart Harris, professor of International Studies at the Australian National University and a former head of the Department of Foreign Affairs and Trade. "And no one in Asia can ignore what China does."

Greater economic ties with Australia are seen as a boon for the continent's economy. In anticipation of the visit, the Australian dollar hit a six-year high.

China is Australia's third largest trading partner after Japan and the US, with two-way trade reaching about $14 billion a year.

Described as a "complementary" relationship by Prime Minister John Howard in that Australia exports raw materials like iron ore and and other minerals in exchange for toys, clothes, and other manufactured goods, it's a trade that is set to increase.

Last year, the two countries signed a liquid-natural-gas deal which is expected to yield $17 billion to Australia over the next 25 years. It was Australia's largest ever single contract.

Experts predict that in 20 years, China will be a global giant with more regional influence than ever before, and in order to benefit, Australia must be included in regional forums like ASEAN and the Asia-Europe Meeting (ASEM) as quickly as possible. Due to the pro-US policy under the conservative government of John Howard, membership to ASEM has proved elusive to Canberra.

"If you are not part of these groupings you will miss the nuances and subtleties in the Asian relationships and this will leave Australia out in the cold and at a major disadvantage," says Michael C.H. Jones, president of the Australia-China Chamber of Commerce. "In order to show real friendship, China should have used its weight in the region to champion Australia's trade causes, but it has not done that."

According to Mr. Jones, that's partly because in the past Beijing has seen Australia as a place "just for adventure sports and the Olympics." And in trade terms, he says, the vast dusty mainland is viewed merely as "a large quarry."

But that may not be such a bad thing. Japan, too, used Australia's raw materials to help rebuild its economy after World War II to go on to become a major trading partner.

And Australia's notoriety abroad for hosting the successful and lucrative 2000 summer Olympics is already paying dividends from Beijing, host of the 2008 games.

Hu visited Sydney's Olympic sites Thursday as an Australian firm, Telstra, won a telecommunications consulting contract with Beijing organizers. Other contracts have gone to Australian architects to build facilities including venues for sailing, aquatics, and shooting.

The increased trade ties also reflect a diminishing anxiety in Australia about Chinese ambitions.

While China has maintained its claim on Taiwan - always a potential flashpoint with the United States - Beijing seems to be taking a patient strategy as it becomes more economically tied to the West.

In Australia, long gone are the days of fearfulness towards Chinese migrants - many of whose ancestors arrived during the 1850s Gold Rush - taking over local businesses and marrying local women. The paranoia contributed to the now repudiated establishment of the White Australia Policy.

Shoppers now can't seem to get enough of stuffed kangaroos, wallabies and other Aussie icons - all made in China.

"With Chinese language newspapers on local news stands in Sydney and so many people learning Chinese, the threat, the mystery around the 'yellow peril' is rapidly dissipating," says Professor Kam Louie, head of the Chinese Korea Center at the Australian National University.

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