The Hon. John Murphy MP
The Hon John Murphy MP
Former Parliamentary Secretary for Trade

Speech

17 October 2008

Hong Kong Australia Business Association, Sydney

Good evening ladies and gentlemen and thank you Ernest.

We meet here tonight less than two months after the outstanding Beijing Olympic and Paralympic Games.

As the grandeur and sparkle of the Olympics demonstrated, China is ready to be much more active on the world stage. 

And Chinese people everywhere are rightly proud of its recent achievements, based on its emergence as an economic powerhouse.

China’s stunning growth is one of the most significant global developments of the last 25 years. 

China is now the world’s second-largest economy behind the United States in purchasing power parity terms — and the largest single contributor to global growth.

China’s importance to Australia cannot be downplayed.

Importantly, China is Australia’s largest trading partner and we enjoy a two-way trade relationship totalling $58 billion.

Australia provides many things to China to meet its growing consumption, including commodities, infrastructure and skills training.

And we, in return, import a very great variety of Chinese manufactured goods.

The strength of our trade relationship is one of the factors that will help the Australian economy manage some of the economic fallout from the global financial storm and the strong possibility of a global recession.

Hong Kong holds a special place in the broader relationship between Australia and China. 

In its own right, Hong Kong is an important source of trade, investment, students and tourists for Australia, not to mention 90,000 highly productive migrants.

However, Hong Kong’s importance extends much further than this. For many, Hong Kong is a gateway – it is the place many Australians choose to test the Chinese market, and indeed many other markets in Asia.

As such it is host to 55,000 Australians and 1,700 Australian businesses. 

Hong Kong is also one of the world’s most open economies. This gives it a very significant role in fostering prosperity in our region. 

Hong Kong’s openness makes it a good partner for Australia in progressing regional and global trade liberalisation, through APEC and the WTO – which the Minister for Trade, Simon Crean, remains firmly committed to.

It would be counter-productive in the extreme for the world to return to the days of protectionism in an era of global financial insecurity.

Tonight I look forward to the opportunities that the Government sees in Australia’s commercial relationship with China and Hong Kong and to outline some of the things we are doing to enhance the trading environment for businesses like yours.

A key dimension to enhancing the business environment is the broader political relationship Australia has with China.  On that score, the government has signalled its very strong commitment.

The Prime Minister has visited China twice in his first year in office.  Six Australian ministers have also paid visits, including two visits by the Minister for Trade and a visit to Hong Kong in May by the Minister for Foreign Affairs, Stephen Smith.

On his visit to China in May, the Prime Minister and his Chinese counterpart unlocked negotiations on a Free Trade Agreement which will further widen the business opportunities between our two countries.

We have just held the twelfth round of negotiations on the FTA with China, in Canberra, in late September.

We have made some progress, and agreed with China to hold a further negotiating round this year.

The negotiations are not easy – we are seeking commitments from China in areas such as services and agriculture - commitments it has not made in its previous FTAs. But the challenge doesn’t daunt us.

The Government appreciates the effort that business associations, including the Hong Kong Australia Business Association, have put into identifying market access opportunities, and limitations, on the mainland - and we will continue to consult closely as the negotiations progress.

The government is hopeful the FTA might unlock financial services, a sector that holds immense potential for future bilateral cooperation.

Australian financial institutions are now broadly represented in China, and Chinese interest in the Australian financial services industry has grown.

But cooperation in this sector is more limited than it should be given China’s growing middle class and the financial management expertise Australia can offer – expertise which is invaluable in the current economic climate.

Nonetheless, the government is also alert to other new areas of collaboration.

Australia and China both face the challenge of climate change.  We need to embrace clean energy and technology as the major platform of our abatement efforts.

To this end, the Australian Government is investing $20 million in an Australia-China Joint Coordination Group on Clean Coal Technology, drawn from Australia’s Clean Coal Fund.

Another dimension to our economic partnership with China which is growing everyday in importance is bilateral investment. 

Capital flows, like services, are an increasingly important element of international trade.

Since the federal election in November, the value of approved Chinese investment applications in Australia has reached $25 billion.

This compares with around $10 billion of approved Chinese investments in the two previous financial years combined.

Australia welcomes Chinese investment.  All applications are assessed using a non-discriminatory investment regime that treats applications on a case-by-case basis and ensures proposals are in line with our national interest.

While Chinese investment has focussed on resources, there are significant opportunities for Chinese businesses in Australian industries across a broad range of sectors.

Beyond the trade and investment opportunities, the Government is always looking for other platforms to raise Australia’s profile in China.

I mentioned the impact on the world’s consciousness of the Beijing Olympics.

While competitors can be justly proud of their athletic achievements, and organisers of their brilliant venues, Australian firms too can be proud of their role. 

They won over fifty Olympics-related projects, including the design of the Water Cube, and involvement in the Olympic Village, the Hong Kong equestrian facility, and the Qingdao sailing base.

To develop future projects, Austrade’s Business Club Australia organised more than fifty events and hosted over four thousand Australian and Chinese business people during the Games, forming new networks and opportunities.

Looking forward, the Shanghai World Expo 2010 stands out as the next big platform to showcase what Australia can do. 

The Expo will be the largest in history – with over seventy million visitors predicted.

Australia is building a striking national pavilion near the centre of the Expo site, and will run targeted cultural and business programs to highlight our strengths in established, and emerging, industries.

A VIP space within the pavilion will host more than two hundred business functions – including ministerial trade missions, investment seminars, sector promotions and corporate sponsor events.

I have been encouraging Australian companies to begin thinking about how the Australian pavilion business program at the 2010 Shanghai World Expo might fit into their strategies.

Through its trade policy, and its broad network of Austrade and Foreign Affairs and Trade posts, the Australian Government is doing all it can to build the environment in which our trade with Hong Kong and China can flourish.

But ultimately it is your effort and skill that will win the day.

In May I had the honour of launching the 2008 Hong-Kong Australia New South Wales Business Association Business Awards and I am delighted that you have invited me back to see seven of your finest businesses honoured for their achievements over the past year.

These companies are taking to new levels the work your association has done throughout its twenty one year history:

Regardless of who goes on to win tonight’s awards, I would like to congratulate all businesses here — you are contributing much to Australian prosperity and diversity. 

But I also hope the fitting recognition of tonight’s winners will provide you with an even greater incentive as you all strive for excellence in the coming year.

Thanks you.

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