Canberra, 1 July 1971
Secret Austeo Priority
For Renouf.
China–Dialogue 7
Following points summarize memorandum from Department of Trade on trade matters that might be discussed with PRC Ambassador on Friday.
2. We believe that trade with China could be considerably expanded. This applies to both sales and purchases.
3. The first requirement is for each side to acquire better information about the other’s markets. A practical way of assembling the information to promote two-way trade would be for Bareham, the Australian Senior Trade Commissioner in Hong Kong, to visit China at the time of the Autumn Canton Fair. The proposal would be that he should visit—
(a) Canton, to talk with officials of Chinese trading organizations, and
(b) Peking, to talk with policy-makers in the headquarters of trading organizations and perhaps even to officials in the Ministry of Foreign Trade.
He could be accompanied, if acceptable, by an official of the Australian Department of Trade and Industry (or a well qualified person from industry). We would be willing to envisage a reciprocal visit by a Chinese official or officials. Another possibility, but substantially less attractive than visit by Bareham, would be for commercial discussions to take place between commercial counsellors in Australian and PRC Embassies in a third country. We envisage that discussions of one kind or the other above would need to precede any proposal for the establishment of official or unofficial trade offices.
4. While it would be premature to envisage conclusion of formal or informal trading arrangements or agreements, you could indicate that our eventual objective, after some joint analysis of our mutual trading problems, would be the conclusion of a trade arrangement or agreement. We have noted that the PRC has concluded a number of short term (1 to 3 years) arrangements in which the two parties contract to supply each other with specified products to a pre–set total value. While such an agreement might give us access for a wider range and volume of items, there is one major problem, namely, our inability to enter into barter-type arrangements which involve contractual obligations on our part to take specified goods.
5. You could also indicate our interest in the possibility of visits to China by the President and/or members of the Export Development Council (EDC) and Manufacturing Industries Advisory Council (MIAC). These are not formal Government bodies but are established under Government auspices. Visits by chairmen of Australian commodity boards might well be useful. (In this case it might be necessary to explain that these boards, while statutory in their formation, are commercial in operation, grower controlled and not dominated by the Government). If acceptable to Chinese, a visit from the Overseas Trade Publicity Committee might be proposed. This consists of the chairmen of the various marketing boards. Visits from such unofficial bodies as the Associated Chambers of Commerce, the Associated Chambers of Manufactures and the Metal Trades Export Group might be possible. For our part, we would be willing to consider inviting a person or group connected with the state trading organizations of China or the extension ofinvitations by the Australian Senior Trade Commissioner, Hong Kong, to members of the China Resources Company.
6. You should emphasize that these proposals are put forward not only in the interests of expanding trade opportunities between the two countries but also for the contribution they may make to the ultimate objective of progressively normalizing relations.
[NAA: A 1838, 31 07/38/18/2]