On April 1st 2025, Ambassador Xiao Qian received an exclusive interview with Andrew Tillett, the Australian Financial Review's foreign affairs and defence correspondent, and elaborated China's position on China-Australia relations, South China Sea issue, Australian federal election, U.S. tariff hike on China, the Chinese naval exercise and others. The full text of the interview is as follows:

Australian Financial Review: There was obviously a lot of focus on the Chinese warships circumnavigating Australia. Can you say what the purpose of the mission was, and whether we can expect to see more Chinese warships in the maritime approaches to Australia? In the interest of stable relations with Australia, do you concede it would have been better to have provided more notice in respect to the live firing activities?

Ambassador Xiao Qian: First, the recent exercises are parts of routine military training of Chinese naval fleet. They are not directed at any third party and have nothing to do with China-Australia relations. China's naval training activities are in international waters, which fully comply with the international laws and the established international practices. There is no reason for other countries feel surprised.

Second, Chinese naval fleet has announced multiple safety notices before conducting live-fire drills. These practices are appropriate, do not pose any threat to aviation activities, and are also consistent with the international laws and the established international norms.

Third, China always views its relations with Australia from a strategic height and long-term perspective. We are ready to strengthen exchanges with Australia, and enhance mutual trust, and promote friendly interactions and cooperation in political, economic, military, and maritime affairs based on the principle of mutual respect. This serves the common interests of our two countries and our two peoples, and also aligns with the shared expectations of regional nations.

Australian Financial Review: Do you believe the Australian reaction was hypocritical given Australian naval vessels regularly sail through the South China Sea?

Ambassador Xiao Qian: First, it must be pointed out that the Chinese naval fleet's activities are fundamentally different from Australian military aircraft and warships' intruding into China's territorial waters and airspace. The Chinese naval fleet operates in international waters in full compliance with international laws and established practices, maintaining a significant distance from the Australian coastline. In contrast, Australian military aircraft and warships, in the name of the so-called “freedom of navigation”, deliberately provoke territorial and maritime disputes in the South China Sea, sow discord between China and regional countries, which undermine regional peace and stability. China firmly opposes these actions.

Second, facts have proven that freedom of navigation and overflight in the South China Sea has never been an issue. The region remains peaceful and stable, and commercial vessels and aircraft traverse the area freely. China always respects the freedom of navigation enjoyed by all countries in the South China Sea in accordance with international law. No international organization, including the UNSC, has ever authorized any country to dispatch military aircraft and ships to maintain security in the South China Sea.

Australian Financial Review: We have also seen what our government calls dangerous interactions between Australian and Chinese military aircraft. Does the actions of Chinese personnel eg releasing chaff put Australian personnel in danger?

Ambassador Xiao Qian: First, the essence of the encounter is that the Australian military aircraft deliberately intruded into China's airspace without China's permission, which violates China's sovereignty. Such actions not only break international law and international norms, but also pose unnecessary risks of friction. They are extremely dangerous and must stop immediately.

Second, the actions taken by the Chinese military aircraft are aimed at safeguarding national sovereignty and preventing more potential risks. These actions are professional, restrained, and fully consistent with international practices.

Australian Financial Review: Donald Trump is pushing ahead with a campaign of imposing tariffs far and wide. What can Australia and China do together to keep trade free?

Ambassador Xiao Qian: The United States' imposition of tariffs on multiple countries, including China and Australia, seriously tramples the international free trade system centered on the World Trade Organization (WTO) and disrupts the stability of global industrial and supply chains. This not only hinders global economic recovery and development, but also offers no benefits to the United States or its people, and will inevitably meet the joint opposition of the international community.

As open economies and beneficiaries of free trade, China and Australia should work together with the international community to address these challenges, support economic globalization, firmly uphold multilateralism and the global free trade system, and promote trade liberalization and facilitation. This will inject greater stability and certainty into the global economy and prevent a regression into isolationism and protectionism. Furthermore, China and Australia should firmly implement the strategic consensus reached by our leaders, continuously improve bilateral relations, further consolidate cooperation in traditional sectors such as energy and agriculture, and explore cooperation in emerging areas, including green development, the digital economy, technological innovation, and healthcare. This will unleash the enormous potential of our complementary economies and benefit both our nations and our peoples.

Australian Financial Review: We are concerned that US tariffs on Chinese goods could lead to a slow down in the Chinese economy, which then affects demand for iron ore and other Australian commodities. How well can the Chinese economy weather the impact of a trade war with the US?

Ambassador Xiao Qian: First, China's economy has a bright future and can stand up to the test. The 2024 Chinese government work report revealed that China successfully achieved its 5% economic growth target for the year. This was accomplished despite a sluggish global economy and unilateral sanctions and suppression from the United States, demonstrating China's ability to rise to the challenges and strive for progress so as to promote economic development.  

The report also sets 2025 GDP growth target for around 5%. The Chinese government is committed to implementing a more proactive fiscal policy and a moderately accommodative monetary policy. Efforts will focus on boosting domestic consumption, encouraging scientific and technological innovation, expanding high-level opening-up, taking solid steps to promote high-quality development, and accelerating the development of new quality productive forces. As these policies take effect, we have every reason to believe that China will achieve its 5% growth target this year.

Second, the tariffs imposed by the US on many countries, including China and Australia, seriously undermine the WTO-centered free trade system and destabilize global supply chains. It not only hinders global economic recovery and growth, but also fails to bring any benefits to the United States and its people. China firmly opposes the U.S.'s unilateral economic coercion and suppression, and has taken necessary countermeasures based on relevant laws, regulations, and international legal principles. We have also filed a formal complaint with the WTO. If the U.S. insists on escalating its tariff and trade war, China will not flinch and is ready to make due response.

Australian Financial Review: CPTPP members have delayed consideration of China's application for membership because of a lack of consensus. Similarly, Taiwan's membership is on hold. Would China be willing to consider that China's and Taiwan's applications be considered simultaneously to resolve this stand off?

Ambassador Xiao Qian: First, China's accession to the CPTPP aligns with the common interests of all its member states, including Australia. As the world's second-largest economy and a key driver of global growth, China's accession to CPTPP would provide its member countries with greater market opportunities and enhanced cooperation, further strengthen the agreement's inclusiveness, representativeness, and global influence. A report from the Peterson Institute for International Economics predicts that China's accession would quadruple the CPTPP's annual global economic benefits. China has been Australia's largest trading partner, export market, and import source for 15 consecutive years. After its accession, China will further open its markets on the basis of the China-Australia Free Trade Agreement (ChAFTA), creating new opportunities for deepening mutually beneficial cooperation, thereby contributing to greater global stability and certainty.

Second, China has demonstrated a sincere and proactive approach in its bid to join the CPTPP. Since formally submitting its application in September 2021, China has conducted multiple rounds of in-depth and comprehensive research and evaluation of the CPTPP's more than 2,300 articles. Additionally, China has engaged in multi-channel and multi-level exchanges with CPTPP members and has made full preparations to align with high-standard international trade rules. These efforts have been positively responded by many CPTPP members.

Third, China firmly opposes Taiwan's participation in any official agreements or organizations, including the CPTPP. There is only one China in the world, and Taiwan is an inseparable province of China. This is a fundamental principle of international relations and a prevailing consensus in the international community. China strongly opposes any country conducts official interactions with the Taiwan region, and firmly rejects Taiwan's participation in any agreement or organization of official nature. Taiwan's attempt to join the CPTPP is not merely an economic and trade matter, but a highly sensitive political issue that must be handled in accordance with the one-China principle.

Fourth, China remains a steadfast advocate for the international free trade system. It has the will, ability and determination to join the CPTPP. We hope that Australia, in its capacity as the rotating chair of the CPTPP, will consider the common interests of the region and the overall China-Australia relationship, support China's accession efforts, and jointly promote the economic integration in the Asia-Pacific region, make more contributes to the world openness and cooperation and economic development of the region.

Australian Financial Review:A review of ChaFTA will soon get underway (if not already). What does China hope this will achieve? What other barriers would China like to reduce?

Ambassador Xiao Qian: Over the past decade since ChAFTA came into effect, the agreement has delivered tangible benefits to both countries. Our bilateral trade in goods has more than doubled, growing from AUD 137.5 billion in 2015 to over AUD 320 billion in 2023. Australia's goods trade surplus with China has increased from USD 8.58 billion in 2015 to USD 62.7 billion in 2023, with an average annual growth rate of 70%.

Stable and robust trade with China has brought substantial benefits to Australian households in terms of income growth, employment, and consumption. Data shows that in the 2022-2023 fiscal year, Australian trade with China increased disposable income by an average of AUD 2,600 per Australian household and created 595,600 jobs, accounting for 4.2% of total employment in Australia.

Currently, China and Australia are actively promoting the review process in accordance with mutual consensus. The subcommittees under the agreement are exchanging views on various aspects of the review. China looks forward to leveraging this review to further address mutual trade and investment concerns and enhance the agreement's implementation.

In recent years, many of the trade concerns between China and Australia have been gradually resolved, and bilateral economic cooperation has gained strong momentum. Looking ahead, both sides should further explore opportunities in emerging sectors such as green development, digital economy, technological innovation, and health industries. China is committed to expanding high-level opening-up, increasing imports of high-quality Australian goods, and encouraging Chinese enterprises to invest and operate in Australia. At the same time, China hopes that Australia will provide a fair, transparent, and non-discriminatory business environment for Chinese companies operating in Australia, positively support China's accession to the CPTPP, and continue to enhance trade liberalization and investment facilitation to bring greater benefits to our two countries and the region at large.

Australian Financial Review: The Labor government has stabilised relations with China this term. We are about to have our election - what is China's hopes for the relationship next term if Labor is returned?  What are best areas for cooperation? Should the Coalition be elected, is the Chinese government concerned this could mark a downturn in relations again?

Ambassador Xiao Qian: Since the Labor government took office, under the strategic guidance of both countries' leaders, China-Australia relations have stabilized, improved, and achieved a comprehensive turnaround. The relationship is now at a critical stage of further development on a stable foundation. This hard-won outcome is the result of both sides working together and should be cherished.

The Australian federal election is Australia's internal matter, and it is up to the Australian people to decide which party governs. China always uphold the principle of non-interference in other countries' internal affairs, and does not want to participate in, interfere with, or comment on Australia's election. I would like to further emphasize that China has no preference to the election outcome. Both major parties have played important roles in the development of China-Australia relations. The establishment of diplomatic relations was promoted by Labor leader and former Prime Minister Gough Whitlam, while the signing of ChAFTA and the establishment of the China-Australia Comprehensive Strategic Partnership occurred under Coalition governments. History has proven that China has maintained good relations with Australian governments from both major parties. Through my engagement with various sectors in Australia, including the opposition party, I have deeply felt that fostering strong China-Australia relations is a widely shared consensus. No one hopes for a return to the turbulent times in China-Australia relations.

Regardless of which party is in power, China will respect the choice of the Australian people and work with the new government to uphold the positioning of the China-Australia Comprehensive Strategic Partnership, continue strengthening cooperation in traditional areas such as energy and minerals while expanding collaboration in emerging sectors, including green development, digital economy, new energy vehicles, artificial intelligence, technological innovation, and health industries, to further advance China-Australia relations.

Australian Financial Review: Have Chinese concerns about our foreign investment regulations been heard by the Australian government?

Ambassador Xiao Qian: Chinese enterprises operating in Australia have always been strictly complying with Australian laws and regulations, and have actively contributed to local economic growth and job creation. China imposes no discriminatory restrictions on Australian companies investing in China and hopes that Australia will uphold the principles of fairness, justice, and non-discrimination. We expect Australia to apply its foreign investment screening policies equally to all investors, genuinely address the concerns of Chinese businesses, create a stable, transparent, and predictable investment environment for them, and promote mutually beneficial cooperation and shared economic development between our two countries.

Australian Financial Review: Is the Chinese government concerned it may be locked out of Australian critical minerals projects?

Ambassador Xiao Qian: The China-Australia economic relationship is highly mutually beneficial and complementary. Mining is a traditional area of cooperation between our two countries. Deepening investment cooperation in the critical minerals sector will not only enhance the added value of Australian exports but also support the development of Australia's domestic manufacturing industry. The Future Made in Australia Bill presents new opportunities for China-Australia cooperation in the critical minerals sector. China looks forward to working with Australia to further strengthen cooperation in this field, jointly ensure stable and unimpeded global industrial and supply chains, and inject greater momentum into economic recovery in both countries, the region, and the world.