The Chinese people have all along cherished amicable feelings about the Australian people. Back in the 1420s, the expeditionary fleets of China's Ming Dynasty reached Australian shores. For centuries, the Chinese sailed across vast seas and settled down in what they called Southern Land, or today's Australia. They brought Chinese culture to this land and lived harmoniously with the local people, contributing their proud share to Australia's economy, society and its thriving pluralistic culture. More than three decades have passed since China and Australia established diplomatic relations.

The bilateral ties have stood the tests of time and international vicissitudes, and made steady headway. To consolidate and develop its all-round cooperation with Australia is a key component of China's external relations. We have always viewed our friendly ties with Australia from a strategic and long-term perspective. To cultivate deeper and all-round cooperation between the two countries is the common aspiration of the two governments and peoples. This afternoon, I will have an in-depth exchange of views with Prime Minister Howard on bilateral ties and the regional and international issues of mutual interest.

We will also sign a series of bilateral documents on cooperation. All this shows that China-Australia cooperation in the various fields is going deeper and broader. I am convinced that China and Australia will shape a relationship of all-round cooperation that features a high degree of mutual trust, long-term friendship and mutual benefit, a relationship that makes our two peoples both winners. How should countries go about their relations with one another in this complicated and diverse world? It is a question that is on the minds of many people.

We are of the view that for a smooth conduct of state-to-state relations and for lasting peace and common prosperity, all countries should act in compliance with the following principles: First, politically, they should respect each other, seek common ground while putting aside differences and endeavour to expand areas of agreement. Our world is a diverse place like a rainbow of many colours. Civilisations, social systems, development models, as different as they may be, should nonetheless respect one another, learning from each other's strong points to make up for one's own weakness amid competition and comparison and achieving common development by seeking common ground while shelving differences. By mutual respect politically, we mean that the political system and path of political development chosen by the people of each country should be respected.

Democracy is the common pursuit of mankind, and all countries must earnestly protect the democratic rights of the people. In the past 20 years and more since China embarked on the road of reform and opening up, we have moved steadfastly to promote political restructuring and vigorously build democratic politics under socialism. While upholding and improving our systems of peoples congresses, multi-party cooperation and political consultation under the leadership of the Communist Party, and regional ethnic autonomy, we have advanced the process of scientific and democratic decision-making and promoted grassroots democracy, protection of citizens' rights and freedoms, and democratic elections, democratic decision-making, democratic management and democratic supervision by the people in the country's political, economic, cultural and social life according to law. We have stepped up the building of rule of law in China, making sure that there are laws to go by, that the laws must be observed and strictly enforced and that violators must be dealt with. As a result, the enthusiasm, initiative and creativeness of the Chinese people of all ethnic groups have been galvanised, providing an immense driving force for the country's development.

In future, we will continue to move forward our political restructuring in a vigorous and cautious manner as our national conditions merit, improve our democratic institutions and legal systems and build a socialist political civilisation. True, China and Australia are different in social systems. This is the result of different choices made by our people in light of their national conditions, and the two countries' different historical evolution. As China-Australia relations prove, so long as they understand and treat each other as equals and respect their respective national conditions and circumstances, countries with different social systems may very well become partners of friendly cooperation with constantly increased common ground. Second, economically, they should complement and benefit one another, deepen their cooperation and achieve common development.

With economic globalisation developing in such depth, no country can expect to achieve economic development without going for effective economic and technological cooperation with other countries and actively participating in international division of labour. Bringing in capital, knowledge, technology and managerial expertise needed for development at home and in return providing products and know-how with comparative advantages for the development of others - this is how countries achieve common development through mutually beneficial cooperation. Right now, China has entered into a new stage of building a well-off society in an all-round way and accelerating the socialist modernisation drive. We are busily engaged in developing a socialist market economy and opening the country still wider to the outside world in more areas and with a higher level of sophistication. While speeding up strategic economic restructuring, we are vigorously implementing the strategies of revitalising China through science and education, of sustainable development, of the development of the west and of renewal of the old industrial base of north-east China.

China enjoys a vast market, abundant labour, social and political stability and a vibrant momentum for development. A stronger and more developed China will bring growth opportunities and tangible benefits to other countries in the world. China and Australia are highly complementary economically. Blessed with a vast territory and rich resources, Australia boasts of economic and technological successes. The potential for China-Australia economic cooperation is immense.

Past, present or future, we see Australia as our important economic partner. China-Australia trade grew rapidly in recent years from $US87 million ($A124.67 million) in the early years of diplomatic relations to $US10.4 billion ($A14.9 billion) in 2002. China has become Australia's third largest trading partner, the fourth largest export market, and the fastest-growing one. Australia is China's ninth largest trading partner and the biggest supplier of wool. Over the years, China has purchased large amounts of iron ore and aluminium oxide from Australia which has such energy and mineral riches.

Last year, the two countries signed a 25-year, $25 billion deal on LNG in Guangdong, thus laying a solid foundation for bilateral energy cooperation. Also expanding steadily are the bilateral exchanges and cooperation in science and technology, agriculture and animal husbandry. By June 2003, Australia has invested in accumulative 5,600 projects in China, with a paid-in investment exceeding $US 3.1 billion. China has invested in 218 projects in Australia with a contractual value of $US450 million. We are ready to be your long-term and stable cooperation partner dedicated to closer cooperation based on equality and mutual benefit.

The trade and economic framework between China and Australia which will be signed today marks the beginning of a brand new stage of our trade and economic cooperation. I am convinced that this framework will help steer our bilateral cooperation in economy, trade and other fields to continuous new highs. Third, culturally, they should step up exchanges and enhance understanding and mutual emulation. Diversity in the world is a basic characteristic of human society, and also the key condition for a lively and dynamic world as we see today. The proud history, culture and traditions that make each country different from others are all parts of human civilisation.

Every nation, every culture, must have some strong points of its own, and all should respect one another, draw on each other's strength to make up for its own weakness and strive to achieve common progress. China has a 5,000-year civilisation, and its people of 56 ethnic groups have worked together to shape the magnificent Chinese culture. The Chinese culture belongs not only to the Chinese but also to the whole world. It has flourished not only through mutual emulation and assimilation among its various ethnic groups but also through interactions and mutual learning with the other countries. With reform, opening up and modernisation drive pressing ahead with full swing, we are all the more eager to draw on the useful achievements of all civilisations.

We stand ready to step up cultural exchanges with the rest of the world in a joint promotion of cultural prosperity. Cultural pluralism is a distinct feature of Australian society, a feature that embodies ethnic harmony in the country. Just as the Australian national anthem goes, Australian people have come across the seas. Cultural exchanges have long served as important bridges of enhanced understanding and deepened friendship between our two peoples. Last year was the 30th anniversary of diplomatic ties between China and Australia.

While Celebrate Australia 2002 delighted Shanghai citizens, Chinese performing artists had their debut in the famous Sydney Opera House. In recent years, people-to-people exchanges between China and Australia have grown rapidly with annual visits well over 100,000. China is now the biggest source country of foreign students in Australia. We should continue to expand our cultural exchanges, giving fuller play to culture's role as the bridge and bond in the building of friendship between the two countries and two peoples. Fourth, in security, they should strengthen mutual trust, cooperate on an equal footing and endeavour to maintain peace.

Peace and development remain the dominant theme of our times. Uncertainties undermining world peace and development are on the increase. Traditional and non-traditional threats to security are mixed together, rendering some regions unstable and turbulent. Terrorism attacks from time to time, and cross-boundary crime have become more pronounced. How to meet these challenges, secure peace and development in the world and create a stable and harmonious homeland for all is a critical question that calls for serious consideration and effective solution.

China advocates a new security concept featuring mutual trust, mutual benefit, equality and cooperation and strives to resolve disputes peacefully through dialogue and cooperation. We believe in democracy in international relations. The affairs of the world should be handled through consultation on the equal footing by all countries. Members of international community should reaffirm their commitment to multilateralism and give full scope to the important role of the United Nations and its Security Council in maintaining world peace and security. China and Australia respect each other's sovereignty and territorial integrity, stick to non-interference in each other's internal affairs and enjoy a growing mutual trust in the security field. The recent years saw increasing exchanges between the two militaries as evidenced by the annual defence strategic dialogue for six consecutive years and frequent port calls by naval ships of both countries.

China and Australia have shared interests in keeping the South Pacific and Asia-Pacific stable, easing regional tensions and promoting peaceful settlement of hot-spot issues. We are both against terrorism and hope for stronger counter-terrorism cooperation. We are both key participants in the ARF and other regional security mechanisms. China welcomes and supports a constructive Australian role in regional and international affairs. We on our part will stick to our independent foreign policy of peace, acting forever as a strong defender of world peace and a persistent proponent of common development

We are ready to join Australia and other countries in cultivating a secure and reliable international environment of lasting stability. Taiwan is an inalienable part of China's territory. The complete reunification of China at an early date is the common aspiration and firm resolve of the entire Chinese people. A peaceful solution to the Taiwan question serves the interests of all Chinese people, including our compatriots in Taiwan. It also serves the common interests of all countries in the region, including Australia.

The greatest threat to peace in the Taiwan Straits is from the splitist activities by the Taiwan independence forces. We are firmly opposed to Taiwan independence. The Chinese government and people look to Australia for a constructive role in China's peaceful reunification. There have been frequent exchanges between our two legislatures in recent years. The Honourable Speaker Andrew and many lawmakers here have visited my country and saw China's changes and progress first hand. We look forward to receiving more of you in China.

Looking back, I have the gratification of seeing a fruitful past of our relations. Looking forward, I feel confident in where the relationship is headed. Let us join hands in writing a more luminous new chapter of China-Australia relationship of all-round cooperation. Thank you.