The recent White Paper on Australia in the Asian Century is an important document to help focus the minds of Australian businesses and governments on the importance of the region and on the opportunities that are available, writes AustCham Hong Kong and Macau Chairman Richard Petty.
The Asian Century won’t necessarily be the Australasian Century, however. For Australia to do well, it will need to capitalise on the rise of Asian economies, not just in terms of selling commodities and educational services, but in terms of selling other high value goods and services and becoming an important part of the managerial, communication, and financial fabric of the region. This will require not only closer linkages with the rest of the Asia-Pacific region, but also the ability to outcompete Asian countries and companies, as well as other countries and companies for a portion of the regional business.
Presently it is not clear that Australia is competing in the right things or that it is using the right benchmarks in assessing its performance. Worth noting is that in individual products, Australia’s top exports to China, Japan, and South Korea have been iron ore and coal. Its top exports to India are coal and gold. On the other hand, Australia’s leading imports from China are telecommunications equipment and parts, and computers. From Japan it is passenger motor vehicles and refined petroleum. From Korea it is passenger motor vehicles and refined petroleum. And from India it is pearls and gems, and jewellery according to figures from the Australian Department of Foreign Affairs and Trade.
The picture that emerges is of an Australia that imports manufactured and refined goods from Asia and exports resources.
To prosper in the Asian Century, Australia will need to be linked to the markets of the Asia-Pacific region in broader terms than presently is the case. It also will need to be more competitive than other economies in the Asia-Pacific region. There is a tendency for Australia to be viewed as a more advanced economy than those of the other Asia-Pacific nations and regions. If so, then Australia presumably should be able to sell high value added goods and services into those markets.
Integrating more closely with the Asia-Pacific will require an understanding of the cultures and business practices in Asia. This is a challenge. One problem in making the Asian Century the Australasian Century is that there has not been a focus in the Australian education system on Asia literacy. A 2010 report, Learning to Live in the Asian Century by Kathe Kirby, on language instruction in schools found that only 18 percent of Australian school students overall were studying an Asian language and that by the final year of high school only 6 percent of students were doing so.
An understanding of the political, economic, and social systems in Asia is lacking as well. Australian Industry Group and Asialink recommended in their Engaging Asia: Getting it Right for Australian Business survey that an “Asia-ready” workforce strategy be developed to ensure that the skills that are needed to do well in Asia are in place in Australian businesses and in the community more broadly.
Additionally, as Rowan Callick pointed out in a December issue of The Australian, very few main board directors and senior executives in Australia have direct experience in the Asia-Pacific, with some notable exceptions. There certainly is room to improve the understanding at the highest levels of how to engage with Asia.
The rise of Asia-Pacific economies will provide Australia a unique opportunity to serve burgeoning markets that are much closer than the traditional American and European markets in terms of geography and time zone.
Australia’s proximity, the fact that it has a more advanced economy than many in the Asia-Pacific region, and the fact that there are a large number of Australians that know the region should mean that Australia and Australian companies can be major players providing knowledge-intensive goods and services to the region to a much greater extent than is the case today. However, such a future is not guaranteed. Several Asian economies are as advanced if not more advanced than Australia. A number of them have easier business environments and incentive structures more aligned with economic growth than Australia, and are embedded geographically and culturally into the region in a way that it is not possible for Australia to match. The opportunities arising from Asian development will only be realised in Australia if Australians work together to create an environment in which they take hold rather than slip away. ■
Thursday, April 25
ANZAC Mix at Six
Friday, April 26
Panel Lunch on RMB Update
Club Lusitano, Central
Thursday, May 9
Luncheon with LegCo Member Regina Yip GBS JP
Thursday, May 23
May Mix at Six
April – November 2013
AustCham Mentor Program