Australian Prime Minister Julia Gilard visted China last week and while there had high level talks with President Hu Jintao and Premier Wen Jiabao. What is emerging is the size of China’s commitment to clean energy and its goals of reducing the intensity of its carbon pollution.
China has pledged to reduce carbon pollution by 17 per cent per unit of gross domestic product (GDP), invest in low carbon industries, increase forest coverage, and for the first time, introduce a series of environmental taxes.
These measures have the power to transform industries worldwide, creating opportunities for nations and corporations that lead the charge or adapt early.
So far Australia has simply focused on supplying resources to its largest trading partner. But China is not developing in a simplistic way – it is evolving in a cleaner way. Australia will have no sensible option but to follow.
Chinese vice premier Li Keqiang expressed the hope that China-Australia energy and resources relationship should go beyond the buyer-seller one.
Mr Li said in a key-note speech at a China-Australia economic and trade forum that “The two countries should seek a long-term stable and strategic cooperation in energy and resources, rather than maintain a simple buyer-seller relationship.”
Certain sectors of Australia’s economy are unhappy with the plan to put a price on carbon pollution. They demand more and more compensation, even though they are responsible for the pollution in the first place.
The Chinese have a saying: “the crying baby gets more milk”. Some industry leaders in Australia have certainly taken the saying to heart. But they are in danger of missing the bigger picture. One way or another, Australia will be forced to deal with the new paradigm in energy production and consumption.
Mr Li urged the two countries to liberalize and facilitate trade and investment in a bid to create sound environments for the businesses. Mr Li called on Australia to facilitate Chinese companies’ investment in Australia. Both Mr Li and Ms Gillard appealed for the substantive progress in bilateral free trade agreement talks.