6 May 2009
Interview with Wuhan TV, China
Subjects: China-Australia FTA, Clean Coal technology, Investment, Services, Swine Flu, global economy.
Q: Trade minister, what is your opinion of the role that China is playing in the global economy, especially against the background of the current economic crisis?
A: It is playing a huge role, China will be the fastest growing economy this year. And probably the next year and probably the year after. Everything that we have seen, when we have been in China, is a reinforcement of the fact that the government is committed to ensuring that China maintains a pace of economic growth that positions it for the future. And that is why it is so important for Australia to be here. To not just build the framework for a FTA negotiations with Beijing, but to look to the opportunities in the region for striking stronger commercial relationships to ensure that that development takes place and that we build new partnerships out of it.
Q: What needs to be done to promote the FTA between China and Australia?
A: I think that basically now it comes down to the political will, the desire to want it. The truth is the interdependency between our two economies is so strong now. Whether it is in product movement or services trade or investment, there is a huge interdependency.
China last year was our largest trading partner. It will be our largest trading partner again.
China needs our resources, we need the supply of many products from China. That interdependency, that complementarity already exists, so we have a huge platform.
The two-way trade, close to something like $70 billion, is an important framework, an important platform off which to launch. But if we are doing that, I think we need to put it within a framework to try and define better what it is that both countries are trying to get out of the relationship. That is why we need to conclude it.
Now there are technical issues, there are sensitivities and yes we have to address those sensitivities. But in the end what it requires is the political will to conclude it. I think that political will exists. What we have got to try and do is to bring it to a conclusion as soon we can.
Q: We hope so. You also mentioned just now that China is Australia’s biggest trading partner and I understand that you believe there is room for increased trade opportunities between the two countries. What specific areas do you think the two countries can develop business opportunities?
A: I think there is no question about the fact that the biggest opportunities going forward are in the services sector and in investment flows. There will continue to be increased product movement in agriculture, in manufactured goods, but by far the biggest opportunities are the services and investment. And just take the discussions we have been having in Wuhan, this like so many cities, with all of the development that is going on, is going to have to develop housing. The Wuhan City understands that in developing housing it also has to be sensitive to environmental concerns. This is an area in which there can be great cooperation. Australia’s expertise, its recognised excellence in design, in architecture, in innovative solutions, in energy management, waste water management, smart lighting, all of those sorts of things, we can really, together, make Wuhan something of a showcase for urban development.
Q: So you found lots of business alternatives this time?
A: I find lots of business alternatives every time we come. That is why I visit China and this is my fifth visit to China since I have been a Minister. Last month I was in Beijing. This trip is essentially about going to the regions. The relationship can not only be about a government to government framework. That is important in setting the basis for developing the relationship. But what is also important is forging the partnership, business to business. And that is where governments can play a key facilitative role. In the end the relationship is going to be done on commercial grounds, but governments can play a key role. But we have a solid platform, here in Hubei Province. Something like a billion dollars in two-way trade, but predominantly it is resource based. Not solely but predominantly. What we have to do is to look for the greater opportunities in manufacturing the complementarity with the automotive industry.
The visit to Dong Feng. Huge opportunities. Green car, environmentally friendlier vehicles. Again it is playing to this desire that the municipality and the province wants. Environmental solutions. This is where we can forge new partnerships across so many levels. Yes, there are manufacturing dimensions, but importantly it is the services dimension and the investment flows as well.
Q: Do you think that Australia and Wisco are a good example for cooperation.
A: I do. Wisco is a huge purchaser of Australia’s iron ore deposits. Wisco’s has undertaken massive restructuring to try and drive efficiencies. The development of those efficiencies and the finding of environmental solutions, more energy efficient and competitive solutions, this is an important framework in which we can develop it.
Clean Coal technology is another. Both of our economies, Australia and the Hubei province rely so much on coal as a source of their energy. But coal is a big emitter. If we are concerned about the environment, the challenge for both economies it to find better ways, through clean coal technologies, in not dismissing the resource but of making it a more environmentally friendly basis.
Q: Do you think the current swine flu pandemic will have a great influence on the world economy or international trade?
A: No, I don’t because I think that we learnt a great deal from the SARS experience. I think the whole exercise out of the swine flu pandemic and effective containment, if we measure it in terms of numbers, is a great tribute to a global lesson that was learnt from SARS, an openness, a transparency, an identification of the problem. Clearly we have medical solutions, but we need to do is to have information flow that enables those medical solutions to be applied.
Q: So we should be very optimistic?
A: I think we should be very optimistic and part of the reason we can be optimistic is because of China’s huge surge in terms of economic development. I mean, the amount of investment despite the global slowdown that has been happening here in China is incredible. We have seen it in Kunming, we have seen it here in Wuhan and we will be seeing it in Shanghai. All driven from different perspectives. Here in Wuhan, because of the central location and the vital hubbing operation that Wuhan provides within the totality of the Chinese economy. And in Shanghai because of the Expo. Australia is strongly committed to the Shanghai Expo. But these are all cities and all regions which in their own way have their own strategies for going forward, their own commitment to growth, their vision for what is going to sustain their future. What I think is important is not for us just to understand it but to really develop a basis in which we can cooperate with it, forge partnerships with it and help them secure that vision.
Q: My last question is what do you think is the future of Chinese and Australian bilateral trade relations?
A: I think that the future… the sky is the limit I think in terms of this relationship. There is no stopping what we can do together, if we put our minds to it. But I think it depends fundamentally on a realisation that not only are our economies so enmeshed, so interlocked, it is also important to open up both economies, to be encouraging of, not fearful of each other, but encouraging of each other. To seize the moment, to understand that we can do so much, if we do it together. What we have to do is to create the openness to secure the future. And that is what I am keen to foster.
Q: Yes, so we can get closer to create a win-win situation?
A: A win-win situation. That is what it is all about and there is a lot to win and both countries can be great winners going forward.
Q: Thank you for accepting my interview
A: My pleasure.
[ENDS]
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