Address to Australia China Business Council

Melbourne

Speech, check against delivery

15 February 2013

It's great to be talking to so many of you here at the Australia China Business Council luncheon.

The tenor of the morning has been pretty upbeat – Dr Li-Gang Liu, has given such an assessment.

So I'd like to join the upbeat club and make some remarks on how we see China developing in the coming year, but more particularly through the course of the first half of the 21st Century.

And I'm happy to take some questions after that if people feel there's time and interest.

We know that the term 'Asian Century' encapsulates a period of incredible economic growth and change in our history.

It's not since the Industrial Revolution has such a transformation has occurred on such a scale.

In the past 20 years alone China and India have almost tripled their share of global production and increased their economies' size six times over.

By 2025 the Asian region will account for almost half of the world's production.

Hundreds of millions of people across our region will have been liberated from poverty. They will live longer, be better educated and better connected to the world.

Australia is well-placed to make the most of this regional transformation.

We have one of the strongest economies in the world. Unemployment is low and inflation is contained.

And while commodity prices may have peaked, investment in minerals and energy continues apace, meaning future increases in production and in export capacity.

Our public finances are amongst the strongest in the world. Government debt is low.

Our financial institutions are sound and we've got the highest possible international credit rating from the three main rating agencies: Triple-A rated and stable by all agencies; the first time that's happened in Australia's economic history.

We've got a multicultural, highly-skilled and creative population, with proven capabilities to innovate and to solve complex problems.

And of course we've got vast natural resources and the know-how and the technologies to develop them.

And most importantly, we've developed a very solid relationship with our region.

And all of this at times gives Australia a disproportionately heavy influence in regional and global decision-making.

But we're not here today to be complacent.

We must continue to adapt to the rapid changes around us by developing new strengths in our own economy.

Thriving in the Asian Century depends on seizing the opportunities and managing the challenges that arise.

And that's why last year in October the Prime Minister released the White Paper on Australia in the Asian Century.

It's really our plan for Australia, a roadmap for the period to 2025, with twenty five objectives and pathways and policies that will continue to be developed to take us along those pathways.

It's an ambitious plan to build on Australia's strengths and shape its future.

It is a comprehensive agenda, which identifies five areas of work to equip Australians to make the most of the opportunities presented in this, the Asian Century.

The first looks at how to strengthen our economy.

The second is to lock in this strength by building on capabilities through education.

The third is about connecting to Asia's growing markets.

The fourth is ensuring sustainable security in the region.

And finally, we must nurture deeper and broader relationships, both at the government-to-government level and between businesses, communities and every-day Australians.

In this way we improve the flow of goods, services, capital, ideas and people between Australia and the Asian region.

And build on the work already being done by governments, business and community groups.

The White Paper sets a goal that by 2025 Australia's GDP per person will be in the world's top 10.

That our school system will be in the world's top five, and every student will be able to study one of four priority languages, including Mandarin.

But to realise these ambitious goals, we need to move quickly to implement real reforms.

Some of these reforms have already been announced in the few months since the release of the White Paper.

Schools Minister Peter Garrett announced that Mandarin would be one of the first two foreign languages introduced under the Australian Curriculum.

Last month I announced that Australia would open an Austrade office in Yangon, Myanmar.

And when fully operational, it will be staffed by a Trade Commissioner supported by a number of locally-engaged business development managers.

The Government also has launched a new Asian Century Business Engagement Plan which will help member-based organisations such as the Australia China Business Council to assist Australia's small and medium-sized businesses to harness commercial opportunities in China and across Asia.

In response to a commitment in the White Paper, the Government has also introduced legislation to amend the Export Finance and Insurance Corporation Act, so that more of EFIC's resources are devoted to supporting small and medium enterprises, particularly in the Asian region.

These reforms are all part of the Gillard Government's drive to help businesses break into and expand in Asia's emerging and growth markets.

And in December last year, the Governments of Australia and China released a joint study on investment and technological cooperation in agriculture.

That joint study is entitled Feeding the Future.

And it looks at how our two countries can cooperate to raise rural productivity to supply more food to global markets.

It's a blueprint for collaboration in northern Australia in particular to increase investment in water conservation, to develop more efficient farming technologies and better transport infrastructure, and to promote Australian investment in Chinese agriculture.

In the past five years – just to give you an indication of the potential on agriculture – our wheat exports to China have risen tenfold.

In the same period, cotton exports rose from $281m to $1.8bn, meat exports up from $55m to $250m and wine exports from $49m to $209m.

This is not 10 years, but in the past five years alone.

For all you beer drinkers you should know exports of Australian barley, such as that used in China's famous Tsingtao beer, have risen from $220m to more than $400m.

It's not just in agriculture: in manufacturing, exports of pharmaceutical and medical supplies to China have climbed from $180m to $586m over the past five years.

And this is part of the transition from an economy that relies heavily at present on mining to one more diversified and broadly integrated with the Asian region.

While this sort of transition can never be seamless, it is good for jobs, it provides more satisfying and rewarding careers and higher incomes.

And it's not just in Australia that change is happening.

Australia supports China's move towards an open capital account and a convertible currency, with the internationalisation of the renminbi as the first step.

Again, I understand that you've been talking about this. As outlined in the White Paper, the Australian Government supports these types of market-based reforms across Asia because they promote stable, efficient and open financial markets.

During his visit last month to Hong Kong – a city that is central to the internalisation of the Chinese currency – Deputy Prime Minister and Treasurer Wayne Swan spoke about Australia's interest in promoting greater use of the renminbi for international trade and finance.

In coming months, Australia will host the first renminbi forum, which will bring together in Sydney senior business leaders from Australia and Hong Kong to discuss renminbi-denominated trade and investment opportunities.

We are also working with China to establish direct trading between our two currencies on the mainland, and we are making great progress.

This would make the Aussie dollar only the third major global currency to achieve this status, after the Yen and US dollar.

It would build on the $30 billion bilateral currency swap set up a year ago between the Reserve Bank of Australia and the People's Bank of China.

These strong financial links have been made possible by the trust built up between Australia and China during nearly two centuries.

Chinese immigrants we know were among the first free settlers in Australia and have long since become integral members of our community.

Today Australia is home to some 900,000 Australians of Chinese descent.

Whose traditions are now deeply embedded in Australian culture.

Witness the spectacular parades – I certainly have – dragons, fireworks and banquets seen from Cairns to Perth to Hobart in recent days to mark Chinese New Year, the Year of the Snake.

Today Mandarin and other Chinese languages are more commonly spoken than Italian and Greek.

In the Asian Century, these language skills are an appreciating asset.

Chinese students and tourists are also choosing to come to Australia in large numbers, despite the very high value of our currency.

In fact, visitor arrivals from China in 2012 were up 16 per cent on 2011 levels and we'd be delighted to see a further increase on that this year.

The Australian Government has also announced that more than 10,000 Australian students will receive grants to study in Asia through the AsiaBound Grants Program.

And we've, just this week in Parliament, introduced legislation to increase the amount of money we lend Australian students planning to study in Asia, and to introduce a new loan to help them pay for Asian language training.

We will also work together through issues such as the transfer of study credits and initiatives to build research partnerships.

Together, these initiatives will lead to more connections between Australian and Chinese universities.

Through the White Paper, the Government is also committed to making it easier for low-risk visitors to come to Australia, through longer period and multiple-entry visas and greater use of online visas.

To encourage more tourists from emerging markets – and from China in particular – the Government will build on the trial of streamlined visa processes for independent tourists and continue to promote Australia as a preferred destination across the Asian region.

The Government recently announced new rules making it easier for foreign investors to live in Australia permanently.

In China, our growing diplomatic network is also one of our most extensive.

It includes the embassy in Beijing and consulates in Shanghai, Guangzhou and Hong Kong, with Chengdu to open later this year.

On a recent visit to China, Minister Crean signed a bilateral cultural implementation program to deepen co-operation between the two countries in radio, television and film, the arts and sport.

While the celebrations for Chinese New Year continue in Australia and around the world, it's important to reflect on the fact that these initiatives and policy settings are not being established in an untilled field.

Australians of Asian heritage and business groups such as the Australia China Business Council have played a vital role in forming what is a great, endearing, and friendly relationship.

These bonds make it easier to pursue the wealth of opportunities presented by the Asian Century.

This is Australia's destiny.

We are in the right place in the right time: in the Asian region, in the Asian century, and that's where our future lies.

Thank you very much indeed.

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