Transcript
13 May 2009
Radio Australia Interview with Mr Crean: Asia Connect Program
Subjects: The Australian economy; $50 million boost for exporters, Free Trade Agreement negotiations with China.
Introduction: I spoke to Trade Minister Crean a short while ago and asked him if Australia's growth forecast of 4.5 per cent for 2011 was not unduly optimistic.
Mr Crean: Well, the forecasts are based on the long term evidence of what happens in this economy coming out of a recession. Clearly the Budget is predicated on us coming out of that recession but, more importantly, this time around we've got the huge fiscal and monetary stimulus driving that path out of recession. So we don't believe they're wildly optimistic at all.
Question: Well, Minister, in your own portfolio, trade, the Government has allocated an extra $A50 million to help local exporters to go global. What's the plan here?
Mr Crean: To go for market share. Australia's economy will be hit by the global recession. There's no question about that but we're better cushioned than practically anyone else of the developed world. Why? Because we've had a stronger banking system, we moved quicker in terms of our domestic stimulus and we're trading to a part of the world significantly that is still growing: China, India, parts of south-east Asia. The challenge for Australia is to take advantage of that opportunity, to grab market share, to realise the resilience of our economy and that's why we want to support our exporters. We're investing in physical infrastructure, ports, road and rail. We're investing in the skills so that we become a creative, skilled, adaptive economy and we're investing in innovation. This is Australia's future comparative advantage so as a government we're investing in the drivers of economic growth for the future. But we're also supporting our exporters in their promotional efforts to get out and sell those comparative advantages.
Question: Well, being prepared for the recovery is one thing and the infrastructure developments aside, you've singled out China as a main possible area of export growth. The World Bank last month revised downwards again China's growth forecast by one percentage point to 6.5 per cent. Does that worry you, given that Australia seems to be pinning so much hope on China?
Mr Crean: It's very interesting because in the last few weeks there have been some very strong signals coming out from China that have caused a lot of analysts to revise upwards their expectations of China beyond what the IMF has said. Now, you only have to look at some of the indicators - retail sales, autos, both on the consumption side, and fixed asset investment generally, but particularly in infrastructure - there have been huge increases in growth. Now, not only is the latter important for our resources economy, all of what's happening in China - and I've just returned from the regions of China last week - there is huge activity going on across China, in infrastructure, in housing development, in manufacturing for a domestic economy. It's true the Chinese economy has been hit by the slump in world exports but China has a huge capacity to generate internal demand, to drive its internal economy. I've always been of the view that the leadership of China will do what is necessary to ensure that eight per cent growth target that they forecast for this year would be achieved. I'm still optimistic about that. But it's also interesting that all of the analysts, whatever they say about this year in China, are forecasting stronger growth next year for China.
Question: And just briefly, Minister, you've, as you've said, just come back from China, indeed, you've had, I think, five visits to China now and yet there seems to be no progress on Australia signing a free trade agreement with the Chinese.
Mr Crean: Well, there's some progress but, in the end, the progress on the free trade agreement, the conclusion, will only occur if the political will exists to make it happen. What I am convinced about from my visit last month to China is that the political will does exist there, we've got to pull it together and close it but the reason for my most recent visit to China was to reinforce our second track approach to China. It isn't just in the area of trying to finalise the FTA, as important as that is, it's also engaging in the regions, strong commercial outcomes, different framework agreements to target particular areas of opportunity for Australian businesses. That's why we're spending time in China. China's growth opportunities give us a real focus for that market share that I talked of and the money we've put into the budget to encourage our exporters should facilitate that.
ENDS
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