Australia has every reason to feel optimistic about future engagement with China writes ACBC Chairman, Frank Tudor.
As a true optimist I believe that the unprecedented international cooperation, which emerged as a consequence of the global financial crisis, will continue to be harnessed and directed to managing issues continuing to confront this global economy.
As a key member of the post-2008 international economic order, Australia not only has a major role to play, but also a vested interest in spearheading the recovery. Be it the Doha trade negotiations, global prudential regulation or finding an answer to climate change, Australia’s appeal echoes through the global corridors of power. Indeed, it is quite fitting that as Australia’s voice is heard, China is the place that sits on the tips of the tongues of so many politicians, economists and business leaders.
Both China and Australia are acutely aware that protectionism, with its appeal to parochialism and economic mediocrity, will not stand in an era where a billion dollars can still take flight across one sovereign border to another with the push of a button.
The signs coming from both sides are encouraging.
Australian Financial Services Minister Chris Bowen recently told the Australia China Business Council that Australia should be profiling its strengths across financial services and prudential regulation by promoting Australia as a first-class passport to the wider region.
The ACBC was also recently visited by a Productivity Commission team charged with assessing the effectiveness of both bilateral and regional free trade agreements in boosting growth and further connecting our prosperity with global markets. Our Directors presented the Commissioner with the results of the Council’s economic modelling, which found that a successfully concluded FTA would deliver over $150 billion and over 0.8 percent annual increases in our GDP over a 25-year trajectory. This inquiry, which has conducted over 40 consultations on the verge of the 14th round of FTA negotiations, has mandated powers to make findings and significantly, recommendations to relevant ministers. Whilst an effectively negotiated FTA would be a major coup for industry and for both governments, the bilateral relationship is stronger and more multi-faceted and goes well beyond the confines of any particular issue.
The latest figures reveal that bilateral terms of trade increased by more than 30 percent in 2009 to a record $83 billion. Additionally, it is expected that this will exceed the $100 billion mark in this first year of the new decade.
As I have written previously, our investment relationship should be transparent, two-way and reciprocal. Explicit restrictions and various other factors related to bureaucracy, transparency and complexity can serve to deter or frustrate investment on both sides.
The ACBC supports the view that a bilateral investment framework could be usefully included in a FTA to relax restrictions, and that the ongoing effectiveness of investments should be monitored over time, to guard against frustration and assure efficacy, through the process of government/industry supported strategic dialogue.
As we have seen on a global scale, persistent trade and investment imbalances, whether real or perceived, must be continually managed. To this end I believe that early investors on both sides have a special obligation to demonstrate good corporate citizenship through involvement in local affairs and industry bodies such as the Council. I have had discussions with both Ambassadors about the Council emerging initiatives in this area. It is clear that around the world, foreign investment attracts considerable public interest as a core public policy issue. Both Australia and China recognise this as part and parcel of the investment landscape. This is why as a Council, we have engaged both governments and maintained dialogue with key companies on both ends of this equation.
Last September’s ACBC-CCCA Investment Forum was fundamentally about both sides sitting down and having a conversation about what kind of common economic future Australia and China wish to forge over the next decades. Continuing this conversation will remain a key part of the Council’s work over the months and year ahead.
In March, the Council convened its signature Canberra Networking Day at Parliament House. This is a major interface between industry and government and is an important part of that discourse. Attended by a record 165 companies from across the length and breadth of the Council’s Membership, delegates were briefed by Foreign Minister Stephen Smith, Trade Minister Simon Crean, Resources, Energy and Tourism Minister Martin Ferguson and Financial Services Minister Chris Bowen. In a landmark speech, China’s Ambassador to Australia Zhang Junsai once again highlighted the depth of the relationship and spoke of the major challenges confronting both economies over the course of the next decade. A key theme to emerge was that both sides continue to see this as a relationship for the long-term.
Australia’s commitment for the long-term is excellently highlighted by its investment in a first-class business program at Shanghai World Expo. As an Associate Partner of the Australian pavilion, the ACBC will take our conversation directly to Expo and host strategic dialogues with key sectors, engage leading Chinese officials and companies, and will offer its members opportunities to actively take part in trade missions and targeted business matching sessions in strategic areas around the Yangtze River delta. Together with our official airline, Qantas Airways, the ACBC is preparing for a major SME-focused trade mission to Shanghai World Expo 2010, incorporating strategy sessions and business briefings with Austrade and DFAT; facilitated VIP entry to Expo; a gala dinner at the VIP rooms of the Australian pavilion; business matching with major companies; and a business summit with the People’s Government of Suzhou. This is an unparalleled opportunity to access one of China’s most exciting regions and engage a captive audience at Shanghai World Expo. ■
For more information on any of the Council’s events, please visit: www.acbc.com.au
or contact the National Secretariat E: email@example.com / T: +61 2 9252 4277
To read more about the ACBC’s Canberra networking day, click here.