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China
Australia's bilateral relationship with China is one of our most important. China's importance to Australia has grown with China's increasing economic, political and strategic weight in the Asia-Pacific region and the global economy. Two-way trade has increased significantly over the past decade and China is now Australia's second-largest trading partner. With average annual economic growth of 9.5 per cent over the past two decades, China has been the single largest contributor to global growth over the past five years. China's open, export-oriented economy has been disproportionately affected by the global recession and the IMF predicts China's growth to slow to 6.5 per cent in 2008-09, before rising to 7.5 per cent in 2009-10. This economic shock has reversed some of the impressive development gains China achieved over the last decade and exacerbated existing development challenges. Country overviewChina's terrain is divided into three large areas. Central China is made up of high plateaus that are snow covered in winter. North China has vast plains with large wheat, barley, sorghum, soybean and cotton plantations. South China is a hilly area with a hot, humid monsoon climate that contains most of the country's rice plantations. China has greatly improved the quality of life of its people over the past two decades with some 200 million people lifted out of poverty. China's economic reform and opening up program since 1978 has been the main vehicle for this progress. It has involved the ongoing transition to a market economy, encompassing reforms in the financial system, state-owned enterprises and the government structure, as well as key resource sectors. The successes of the last thirty years have made a tangible positive difference to the lives of hundreds of millions of people in China. Development challengesDespite these achievements, major challenges remain. China faces ongoing poverty challenges, many of which relate to unbalanced development. The World Bank (2009) assesses that more than 250 million Chinese still live on less than US$1.25 per day, with many more at risk of relapsing into poverty. China's remaining poor are widely dispersed and hard to reach. Income inequality is increasing and poor rural families and migrant workers are finding it harder than ever to access basic services. Under China's household registration system, some 225 million migrant workers are excluded from basic services in the urban areas where they live and work. Environmental challenges continue to constrain economic growth and public health, despite advances in key areas such as pollution control and water management. The global recession has exacerbated China's development challenges. Despite a strong government response, including a RMB 4 trillion (U$586 billion) fiscal stimulus package, the return of some 70 million migrant workers to their hometowns has pushed communities back into poverty and further strained basic services and social security systems in rural areas. Reducing poverty further in China demands comprehensive structural, institutional and legal reform, complemented by ongoing improvements in basic service delivery. The Chinese leadership is addressing these challenges through its long term vision to achieve 'balanced development' between urban and rural areas; regions within China; economic and social needs; economic growth and the environment; and domestic development and global engagement. As an emerging international power and driver of regional and global economic growth, China has unequalled potential to catalyse development in the Asia-Pacific region and contribute to global achievement of the Millennium Development Goals. China's own dramatic development path informs its growing role as a donor to the region and more broadly. Australia will continue to work with China within its borders to promote development as well as outside its borders to promote development across the Asia-Pacific. Australia's aid programCountry program estimate 2009-10: $25.0 million 2009-10 marks the thirtieth anniversary of the Australian aid program to China. In 1981 Australia became the first bilateral aid donor to China and since that time Australia has given close to AUD1.28 billion to assist China's development. Currently our assistance is guided by the 2006-2010 China Country Program Strategy (CPS). The Strategy focuses on supporting China's development and reform agenda through targeted policy engagement, high level capacity building and partnerships in the three key sectors of governance, environment and health. The Strategy's goal is to further mutual national interest by supporting China's balanced development policies and working together in the region. The three objectives of the CPS are to:
The Strategy has guided a shift in the focus of Australian development cooperation from poverty alleviation projects in the provinces to national level policy engagement. With the exception of Tibet and the AusAID regional HIV/AIDS program, provincial projects have been phased out. The program is now centred around three funding facilities designed to respond to Chinese priorities and draw on Australian expertise. In governance, the China-Australia Governance Program (CAGP) works with China's national ministries to support China's governance reform and development agenda in fiscal reform, balanced rural-urban development and social security for migrant workers. The Human Rights Technical Cooperation Program (HRTC) works with Chinese government agencies and NGOs to strengthen the administration, promotion and protection of human rights in three key areas: women's and children's rights, ethnic and minority rights, and legal and judicial reform. In health, the China Australia Health and HIV/AIDS Facility (CAHHF) works through the Chinese Ministry of Health to address reform priorities, to make the health system and workforce more skilled and responsive to health needs, and to protect the population against HIV/AIDs and emerging infectious diseases. Facility activities are directly supporting the five key reform areas identified by China in 2009 as its top reform priorities for the next three years. In environment, the Australia China Environment Development Program (ACEDP) brings together nine national-level Program Partners to help China improve its environmental protection and natural resources management, particularly in relation to water. ACEDP's current and pipeline activities support Chinese resource conservation and environment protection policies outlined in the 11th Five Year Plan (2005-2010). See also: Useful websites
June 2009
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