12 August 2008
Interview - Australian Agenda
Subject: The Olympics as a tool for boosting trade
DAVID SPEERS: Well the Olympics are about a lot more than just sport. It's a golden opportunity to boost business and boost trade links.
And here in Beijing there is a very big delegation of Australian business leaders trying to boost their own trade, and Australia's trade overall.
Trade Minister Simon Crean has been here in Beijing as well, and I caught up with him for a chat about how the Olympics are used as a tool for boosting trade, and indeed some of the challenges in Australia's trade relationship with China.
Simon Crean, how important is the Olympics as a tool for boosting trade?
CREAN: It's huge. Sport itself has become an export. But sport is also a platform for lots of businesses that want to make contact and partnerships, particularly here in China, where joint ventures are really the name of the game; to use the opportunity of the sporting event to build those partnerships.
We've set up Business Club Australia, through Austrade. It actually evolved, very successfully, out of the Sydney Olympics. It has had huge success through Athens, through the Commonwealth Games, now here in Beijing.
SPEERS: Can you put any sort of dollar figure on what sort of boost this will give to Australia's trading position?
CREAN: No, I think that, it's very hard to put that figure on. We've had 40 companies bid successfully for 50 contracts associated with the staging of these Olympics - from the design of the water cube to the events such as archery; the tennis centre; hockey; the Olympic village, in terms of design.
So there's a whole range of, if you like, the software that goes into how you develop these. There's also the logistics, and the events management.
This is what Australia did really well...
SPEERS: [Indistinct].
CREAN: ...second to none in Sydney. And it's really taking the strength of that and marketing it in a global sense to other big global events.
SPEERS: Looking at the relationship, the trade relationship with China, it is now our most important trading partner...
CREAN: Yes.
SPEERS: ..but it's not a relationship without it challenges.
CREAN: Yes.
SPEERS: Now, one issue the Chinese are sensitive about is the buying up Australian resources, but also buying up Australian resource companies.
CREAN: Yes.
SPEERS: What is the Australian Government's position? Are there any concerns about China's appetite for our resource companies?
CREAN: No, we've got a, a policy that welcomes foreign investment and applies the rules associated with it, in a non-discriminatory way.
There are national interest tests that the government has to consider in the context of particular applications. And they're done through the Foreign Investment Review Board. That hasn't changed.
What has changed though is the fact that we have unfrozen the free trade talks. These were discussions commenced under the previous government but went nowhere over the last three years.
When the Prime Minister came here in April, those talks were unfrozen.
One of the issues that the Chinese are keen to pursue in those talks is the question of investment, but so are we. It's not just an offensive interest for China, it's an offensive interest for Australia, because you talk to Australian companies and they want to have, they want to take greater equity in certain joint ventures; they want to really open up, if you like, more the opportunities for investment.
SPEERS: But as far as China's sensitivity is concerned, when it tries to invest in a resources company in Australia, there does seem to be a reluctance on Australia's part, if it's a State-owned company - a Chinese Government-owned company - isn't there? There is, there is a reluctance to allow them to buy up.
CREAN: No, I don't think that's true. I mean there are examples of where they have been not, not just buy up, there's been a welcoming of it in circumstances in which the business is expanded.
It's a different circumstance, not just for China, but any country, if anyone simply wants to come and buy what's already there.
I mean, why do we encourage investment? We encourage it to expand the capital base of the country to increase opportunities. We still welcome that.
These issues have to be considered on a case by case basis. Always have been.
SPEERS: So you have no problem with a Chinese Government-owned company buying a resources company in Australia?
CREAN: Well, for example, one of the Chinese companies has already done that with our bauxite operations at Aurukun in Queensland. That's there. That hasn't caused a crisis anywhere that I'm aware of.
SPEERS: But this is just the beginning...
CREAN: So let's get real about this...
SPEERS: ...if it does continue...
CREAN: ...no, no...
SPEERS: ...if it does expand, is there no concern there at all?
CREAN: No, I think the problem is that, in trying to explain that these issues are dealt with on a case by case basis, it's wrong to try and just have one general principle that applies.
SPEERS: You mentioned the government's been able to unfreeze these free trade agreement talks. One of the sticking points will be whether Australia recognises China as a market economy.
Do you think China is a market economy?
CREAN: No, that's not a sticking point. That's already been conceded by the previous government.
Our criticism of that decision was not the decision in itself, but that we didn't get anything in return. And that's why we've had talks, in my view...
SPEERS: So you would agree...
CREAN: ...that have been frozen for three years...
SPEERS: ...you agree China is a market economy?
CREAN: ...so, we have accepted that fact. And we've also said to China, in the case of the resources sector, where they've come from time to time to the government to complain about the high prices; well, you can't ask to be a market economy and not act like one.
They are market forces that are going to determine the prices for your raw materials.
What we're in a better position to do - better than a lot of countries - is to address the long-term reliability of the supply, which is terribly important...
SPEERS: But is, is it a market economy when it doesn't fully float its currency; when it doesn't, you know, allow a free run on petrol prices; when it does have some of those limits on investment that you've been referring to? How can you call that a market economy?
CREAN: Well, you know, 25 years ago the Australian economy didn't do those things either David.
So it is a question of time, and it is a question of progress. And it is a recognition of the Australian economy being at a different stage of development from China.
SPEERS: So it'll get there eventually?
CREAN: Well, that's right. And China accepts that. And we've got to understand the importance of helping China get there, not saying, we accept the fact that they'll never get there, but accepting the fact that all of the ambition that we would like isn't going to happen overnight.
But we do have to develop the framework by which we move in that direction.
SPEERS: Just finally, a lot of people in Australia would see the human rights issues here very seriously and say, oh, the government's putting trade before these issues of religious freedom and press freedom, and freedom of expression, free speech.
What do you say to that sort of criticism, that you're putting trade before human rights?
CREAN: Well, I think trade and cultural exchanges have been there through the history of governments in both countries.
It is the cement that builds the relationship.
It's not true that we've ignored the human rights issues. We have raised them. But we've never made them a condition of trade, and nor has China.
But, that's not true - that's equally true of a lot of other countries where we have differences of opinion in relation to their approach to domestic matters. Whaling is a classic case in the case of Japan, a developed country.
The critical thing is, the strength of the trading relationship means that - and the respect that both countries have had and the longevity of the relationship, means that neither country tries to hold the other objectives captive to the other.
SPEERS: Simon Crean, thank you.
CREAN: Thanks David.
SPEERS: Trade Minister Simon Crean there.
ENDS
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