PM to call for China to match its economic power with ‘additional responsibilities’ in major speech before G20 summit in Tokyo

This article is more than 1 year old

This article is more than 1 year old

The prime minister, Scott Morrison, has warned that the “strained” relationship between the US and China risks “collateral” damage in the region, amid growing uncertainty in the global economy.

In a major speech ahead of the G20 summit in Osaka this weekend where the US president, Donald Trump, will meet with China’s president, Xi Jinping, Morrison has called on China to match its extraordinary economic power with “additional responsibilities”, saying it has been a key beneficiary from the rules-based international trading system.

“Undoubtedly, the most significant change in most recent times has been the shift in the relationship between the United States and China, who exert the greatest influence on our region,” Morrison will say on Wednesday.

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“The world’s most important bilateral relationship – the US-China relationship – is strained: trade tensions have escalated, the collateral damage is spreading, the global trading system is under real pressure.”

“The impact of any further deterioration of the relationship will not be limited to these two major powers.”

Saying that the “shifted” balance between the two superpowers required “urgent repair” of the rules-based system, Morrison said China’s prosperity had been achieved by having access to global trade, with the benefits not to be “underestimated”.

But since it had achieved its status as a global superpower, with China’s international trade now worth $4tn, China had reached an “economic maturity” that required a change to how it dealt with its more developed trading partners.

“As a rising global power, China also now has additional responsibilities.

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“It is therefore important that US-China trade tensions are resolved in the broader context of their special power responsibilities, in a way that is WTO-consistent and does not undermine the interests of other parties, including Australia.”

The prime minister will also say that there is no longer a level playing field between China and its trading partners, including the US.

“It is now evident that the US believes that the rule-based trading system – in its current form – is not capable of dealing with China’s economic structure and policy practices,” Morrison says.

“Many of these concerns are legitimate – forced technology transfer is unfair, intellectual property theft cannot be justified, industrial subsidies are promoting overproduction.”

“While we acknowledge that large parts of China are still to realise the prosperity of its major economic centres, it is also true that its most economically successful provinces, each of which is larger than most developed nations, including Australia, has reached and sometimes exceeded the economic sophistication of its global competitors.

“Yet, at the same time, these economies get to compete with concessions, whether they be on trade, environmental obligations or other terms, not available to other developed economies.

“Our current trading system seems incapable of acknowledging, let alone resolving, these issues.

“The rules-based system is in need of urgent repair if it is to adequately respond to these new challenges, including the rise of large emerging economies, changing patterns of trade and new technologies.”

Trade minister Simon Birmingham reinforced Morrison’s message on Wednesday morning, telling the ABC the US and China both carried “great power”, which came with “great responsibility”.

“Please end this dispute, to please recognise that the rules-based system for international trade has served us all incredibly well for decades, to commit to it, to modernise it and to work with us to make sure that we can all continue to use that as a platform for prosperity and growth in the future,” he said.

Morrison will also use the speech to outline how Australia will counter the rise of China in the Indo-Pacific region, highlighting its relationship with Japan, India, Indonesia and other Pacific nations.

He also promotes Australia’s alliance with the US, saying the relationship with the US “has never been stronger”.

“Ours is a resolute and mutually beneficial alliance partnership where neither party has the need to prove anything to each other,” Morrison says.

“Our alliance with the US is the bedrock of Australia’s security, providing us with irreplaceable hard power capabilities and intelligence.”