Speech by The Hon Lindsay Tanner MP
Minister for Finance and Deregulation
Melbourne
Friday 23 October 2009, 12:30pm
I acknowledge the First Australians on whose land we meet, and whose cultures we celebrate as among the oldest continuing cultures in human history.
It is a pleasure to be able to join you here today at the tail-end of what I understand has been interesting, informative and productive week.
Events such as these provide an invaluable forum for Australian business to connect with opportunities in foreign markets and I don’t have to tell anyone in this room today that, for Australia, there is no more important market than China.
During this global recession China has also quite rapidly become one of the most important influences on Australia’s economy.
I am sure all of you have seen the various economic data of late that continually indicate Australia has been one of the strongest performers of advanced economies since the beginning of the global financial crisis.
There are a number of factors that have been at play in achieving this, not least the Rudd Government’s stimulus that has worked in conjunction with the Reserve Bank’s monetary policy to get money flowing into the economy at a time of need.
But increasingly we are seeing economists and commentators pointing towards the role of China in driving economic growth.
While not for one minute would I advise anyone that we can afford to sit back, relax and let China carry us beyond the global downturn and into a new era of prosperity, there is no doubt that China presents Australian business and Australia as a nation with significant opportunities.
It is for that reason that I am pleased to see so many of you here this week exploring those opportunities.
I am also pleased that I have an opportunity to extend a special welcome to those of you here today from Tianjin. I am the Federal Member for Melbourne and Tianjin has been a sister city of Melbourne for close to 30 years.
I know many of you in this room will have persevered through the difficult economic conditions that we have faced in the last 18 months - continuing to conduct business between China and Australia in a period when global trade and foreign investment have fallen to levels not seen since the great depression - and I encourage you to continue with that work.
Because despite the challenges that are present it is as important as ever that Australian businesses – and indeed businesses from countries around the world – don’t turn away from these opportunities.
The strong economic association that exists between Australia and China is not the only reason the Rudd Government places such importance on this country’s relationship with China though and I would like to begin by touching on the increasingly close social, strategic and cultural links the two countries have.
The Australia-China relationship is now stronger and more broadly based than ever before.
It is built on rapidly expanding people-to-people ties, with a growing number of Chinese tourists visiting Australian shores and vice versa. There are also the increasing number of Chinese students, currently numbering in excess of 100,000, choosing to study in Australia.
It is built on our shared goal of ensuring security and stability in our region. Australia’s prosperity, like that of China’s, is linked to the stability and growth of the Asia-Pacific region and we look to China to play a leading role in regional and global affairs, a role befitting its growing economic and political influence.
And it is built on the economic ties that have become deeply embedded in the latter part of the 20th century and the first decade of this century.
The Governments of both countries are committed to taking this relationship to an even higher level.
Our leaders, Australian Prime Minister Kevin Rudd and Chinese President Hu Jintao and Premier Wen Jiabao have met on a number of occasions in the past two years and our respective foreign ministers have recently established an annual Australia-China Strategic Dialogue to discuss issues of key importance to both countries.
And of course cooperation between the two nations is enhanced by participation in key forums including the East Asia Summit, APEC and the G20.
In pursuing that partnership, we acknowledge the reality that at times we will have different approaches that reflect our different histories, our different political systems, as well as different cultures.
But as in any mature partnership, there is mutual respect and we will continue to work together within that context.
Since the early 1970s when Australia first established diplomatic relations with China, the total value of trade between the two countries has grown from around $100 million to in excess of $50 billion.
This of course has been largely been due to the major reforms that the Chinese economy has gone through in that period. Economic reforms in Australia have also been important.
For those of you in this room, and for the Australian economy, two of the key reforms have been in trade policy and foreign direct investment.
In the past decade foreign direct investment into China more than doubled in value close to US$100 billion; Chinese export growth has averaged close to 30 per cent; and real growth in the Chinese economy averaged around 10 per cent.
Even during the global financial crisis, a period in which nearly every major economy has contracted, the Chinese economy has continued to surge ahead, figures released yesterday showing growth of close to 9 per cent in the year to September.
The culmination of this sustained period of extraordinary growth is that China has emerged as the one of the world’s largest economies.
The Government has closely tracked this transformation and is continually looking at opportunities for our economy to capitalise on the emergence of this world power in our region.
For a number of years Australia has been an important supplier of the raw materials and energy China needs to sustain its rapid economic development.
Resource exports and agricultural commodities account for the majority of Australia’s merchandise exports to China and as I said earlier, the Government recognises the importance strong Chinese growth has for the demand for Australia’s commodity exports.
But increasingly we are looking beyond what could be called “traditional” exports towards new burgeoning export markets such as financial services and consumer goods.
Australian banks, law firms and insurance companies have an increasing presence in the Chinese market while the emerging Chinese middle class is opening up opportunities for Australian exporters of food and consumer items.
We anticipate the economic complementarities that have underpinned rapid growth in trade in the past decade will continue as cooperation between the two countries’ governments on trade issues increases.
Australia is working closely with China to conclude the World Trade Organisation Doha Development Agenda and we will continue to cooperate closely on trade and investment facilitation through APEC and other regional forums.
And of course, we continue to progress towards a free trade agreement which I can assure you the Rudd Government is absolutely committed to.
Talks between senior Ministers and officials from Australia and China on this topic are ongoing with a meeting held in Beijing as recently as September. Although I am not directly involved in these talks I understand that they are proceeding in a constructive manner, with both parties indicating a real ambition to secure a high quality free trade agreement.
While the free trade agreement is being finalised, the Australian Government has committed to a major new “sector by sector and province by province” initiative.
The initiative involves working with provincial governments in China to create the government-to-government frameworks through which Australian companies will be better placed to secure business opportunities.
In July, Australia’s Trade Minister Simon Crean and Industry Minister Kim Carr travelled to a number of Chinese provinces resulting in Frameworks for Cooperation being established between Australia and the Anhui and Hubei Governments.
The initial focus of this initiative will be on promoting Australian auto capabilities and exports to these regions but there is significant scope for other sectors to take advantage of this relationship in the future.
An increasingly prominent part of our bilateral economic relationship is the two-way investment link between Australia and China, a topic that over the last few months has been the focus of much attention.
The Australian Government very much welcomes Chinese investment into Australia and recognises the vital role it will play in the development of Australia’s resources sector.
In the two years that the Rudd Government has been in office, approved Chinese investment in Australia has totalled close to $35 billion.
Our highly skilled and diverse workforce, along with our sound institutional and regulatory structures that support business initiative, make Australia a good place to do business.
But again, we cannot let complacency set in if we want that level of investment to continue. We need to ensure Australia remains ahead of the pack in providing the type of environment which fosters foreign investment, a challenge the Australian Government is committed to meeting.
This means we need sound economic management and appropriate regulatory structures; we need to invest in skilling up our workforce; and we need to invest in quality, productivity-enhancing infrastructure.
Possibly the most important piece of infrastructure that this Government is investing in is the National Broadband Network. While I am sure many of you in this room are familiar with the investment we are making in this network I would like to give a short overview for our international guests.
In April this year the Australian Government announced that we would build, in partnership with the private sector, a new super-fast National Broadband Network.
This network will connect 90 per cent of all Australian homes, schools and workplaces with broadband services with speeds up to 100 megabits per second. This is 100 times faster than the services currently used by many households and businesses in Australia.
Those not connected to the network will be connected with next generation wireless and satellite technologies that will be deliver broadband speeds of 12 megabits per second.
A super fast broadband network available around Australia will open us up to the world, and the world to us, like never before.
As I said a moment ago, quality infrastructure such as this is critical in advancing Australia’s reputation as a place to invest and a place to do business, but this is just one benefit of the new network.
In the economy of the future – an economy in which geographic borders will become less and less relevant – broadband will be the key enabler for businesses, for governments, for organisations of all types and sizes.
In this economy telecommunications services are just as fundamental to economic activity as financial services.
I am sure many of you will say that economy is here now and to a degree it is, but I believe the advancements we will see in the next decade will fundamentally change the way our economy operates.
Superfast broadband will not just make sending a large attachment via email quicker. It will open up new opportunities for international trade, for business, for education, for interaction of all kinds; opportunities that have not previously been possible.
I am sure nearly every person here today is constantly looking for better ways to operate their organisation or for new ideas through which they can generate business. I encourage you all to think of how you can use broadband with speeds of 100 megabits a second.
The emergence of China as a global economic power is one of the most important developments in recent world economic history. It has also become one of the most important factors in the performance of Australia’s economy.
As a Government we fully understand the importance of this and of maintaining and building upon the strong relationship that exists between the two countries. I speak of the relationship that exists not only between governments, but between businesses, organisations and individuals.
As with any good relationship, there will be differences, but what is beyond those differences makes it all worthwhile.
I encourage you all to make the most of the opportunities that I am sure have presented themselves this week and further the links between our two countries.
Thank you.
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