China mission opens door to vast interior

Foreign Minister Bob Carr has opened Australia's fourth diplomatic mission in China in the thriving western metropolis of Chengdu, saying it will provide a launching pad into the region's fast paced growth.

He said China's fastest-growing cities, and seven of the top eight provinces, were situated inland, and the consulate in Chengdu would help "press Australian businesses into western China", particularly as the bilateral economic relationship moved beyond resources-dominated trade.

"The fact is that this is a relationship between Australia and the new urbanised China," Senator Carr said. "As hundreds of more millions Chinese gravitate to these great cities, there will be a need for Australian goods and services."

But he repeated a warning from his department from a briefing paper in April, which said it was concerned business disputes had resulted in criminal charges, which was "putting considerable strain on the bilateral relationship".

"With the rising level of trade in the two countries, there's probably no surprise that the number of commercial disputes have been rising, and we want to provide guidance on how best to manage this challenge," Senator Carr said.

High-profile cases involving jailed Australian businesspeople including Du Zuying, Charlotte Chou and Matthew Ng have tended to involve murky disputes with powerful local business partners.

Australia's ambassador to China, Frances Adamson, said the commercial disputes initiative was not an indication of a large increase in incidents. "But the best way we can help is to be on the front foot," she said. "A couple of things have crossed my desk but nothing more."

Chinese negotiators have also been driving a hard bargain by demanding Australia relax investment restrictions before it considers agreeing to a free trade agreement. But Senator Carr said he did not understand why Chinese would find it difficult to invest in Australia.

"I can't think of any reason that should be the case," he said, adding he also could not see the justification for many Australians to be wary of Chinese foreign investment, as was suggested by a recent Lowy Institute poll.

The consulate in Chengdu will be headed by Nancy Gordon. It will join Australia's other diplomatic missions in Beijing, Shanghai and Guangzhou.

Ching Lee, the head of the Australian Chamber of Commerce's Chengdu branch, moved from Melbourne in 1996 to set up Rheem's operations in the city.

He said Australian companies such as BlueScope Steel, ANZ and Cochlear have a presence in Chengdu, but that there was room to take advantage of a lot more opportunities, including in healthcare and mining.