Australia and its like-minded countries must work constructively with China but also stand up for its interests and “draw lines in the sand” when necessary, former Finance Minister Mathias Cormann says.
Mr Cormann, who is now the secretary-general at the Organisation for Economic Co-operation and Development, was giving a Lowy Institute lecture on Wednesday when he was asked about China.
He said the OECD brought together market-based democracies that shared a commitment to human rights, rule of law and market-based economic principles.
“The political and economic system in China is different and inevitably, there will be pressure points from time to time,” he said.
“The key is going to be to work through those in as positive and constructive a way as possible but also to be very clear on where it is important to stand up for our interests and to draw lines in the sand.
“I think that that’s going to require appropriate balancing for some time to come.
“Ideally, we will end up with an appropriate, sustainable accommodation in the context of an international rules-based order, where we can continue to live together harmoniously, peacefully and pursuing the further expansion of global trade to mutual benefit.”
Mr Cormann was asked if he had detected a change in the way European countries were thinking about China from it being a market opportunity to potentially a threat.
“It’s now the world’s second biggest economy. It’s the biggest trading partner to a growing number of countries around the world,” he said.
“Countries around the world have an interest in having the best possible relationship with China.
“There are also issues — whether it’s climate change or international tax, or a series of other issues – that can only be effectively addressed by having all of the major and minor players around the table.
“An issue like climate change will only be able to be addressed effectively if the US, China, India and others are around the table.
“So there’s a whole range of areas where it is very clear that we must find ways to effectively co-operate.”
On the Covid-19 pandemic, Mr Cormann said the world’s biggest risk continued to be further waves of infection.
“France, Belgium, Germany (and) countries in western Europe have got relatively high vaccination rates, but if you look at Bulgaria, Romania (and) some of the central European countries, vaccination rates are quite low,” he said.
“The fourth wave that is going across everything east of Germany at the moment is pretty significant.
“Developed economies have a responsibility to do more. It’s not just charity — it’s self interest because we won’t have sustained health protection until such time as we’ve got a properly comprehensive global coverage of vaccinations.
“The economic recovery will remain at risk until such time.”
Mr Cormann was not keen to discuss Australia given his political history, but said the nation had performed very well.
“We want to move into a world where we can live with the virus, where we can manage the risk of the virus, while returning to (normal) as close as possible in a Covid-safe way, and that’s where a high vaccination rate is so important,” he said.
Asked about immigration as restrictions ease during the pandemic, Mr Cormann said it was a judgment for the Australian government to make.
“But as a principle, of course, I’m very supportive of strong levels of migration,” he said.
“I think that migration has served Australia very, very well in terms of the economic and social development of our country.”
On climate change, Mr Cormann said the key was to move the world to net zero by 2050 while following “credible and realistic” transitions.
“Different parts of the world have different starting positions and face different circumstances, and find themselves in a different economic context,” he said.
“I think it’s always important to be more ambitious, but it’s even more important to be able to deliver the outcomes.
“The worst thing, in terms of our overall objective, would be if Australia were to make decisions that shift activity, jobs and emissions into other parts of the world where emissions are going to be higher and the global emissions outcome would be worse.”
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