Australia and Hong Kong: Partnership for Prosperity
Speech by the Minister for Trade Senator Bob McMullan to the Australian Chamber of Commerce, Hong Kong, 18 September 1995
Introduction
As Australia's Trade Minister, I am delighted to be back in Hong Kong and to have this opportunity to address AustCham - and to do so just one day after the Legislative Council elections.
The fact that the Australian Chamber is the second largest Chamber of Commerce in Hong Kong in what is arguably the most exciting and competitive international business centre in our region says something positive and important about the extent and success of our economic engagement with East Asia.
The dynamism of Hong Kong challenges us all to show what we have to offer to Asia as an economic partner, and your presence, your strength, and your success show that Australia has much to deliver, and is delivering more than our relative economic weight would suggest.
I regard AustCham's success as a very powerful example of Australia's increasing economic integration with Asia
Hong Kong has become important to Australia as a bilateral economic partner in its own right, but, just as significantly, many of you here today are successfully doing business out of Hong Kong with China and other Asia Pacific countries, and Hong Kong is an important partner for Australia in the regional and multilateral trade forums, such as APEC and the World Trade Organisation.
Australia/Hong Kong Economic Relations
I know many of you will be all too familiar with the extent of Australia's trade and economic relationship with Hong Kong and the clear evidence it provides of the increasing recognition here of Australia as a supplier of world-class goods and services.
So let me give only a few examples to illustrate the point in a contemporary way:
- in 1994, Hong Kong was our eighth largest export market, with merchandise exports valued at A$2.7 billion
- our services exports to Hong Kong in 1993/94 were worth nearly A$815 million - education services alone accounted for about A$250 million, with Hong Kong being Australia's largest source of full fee paying students
- Australian investment stands at over A$3 billion, and Hong Kong investment in Australia at over $A13 billion making Hong Kong the fourth largest source of foreign investment in Australia.
Broader Bilateral Ties
But economics alone cannot explain the strength of our bilateral relationship.
Hong Kong as a society has many attributes which are naturally attractive to Australians:
- both of our societies are used to change, we both like to see ourselves as open and receptive to new ideas
- we both value innovation, and our civil freedoms
- and both societies have been enriched by a history of immigration.
There is no better measure of the positive Australia-Hong Kong chemistry than the free ebb and flow of people. In fact, the Australians living in Hong Kong form our largest overseas community, and approximately a quarter of a million Australians visit Hong Kong each year.
While there are more than 50,000 people resident in Australia who were born in Hong Kong, and 87,000 tourists and business visitors came to Australia from Hong Kong last year - a figure we expect to grow to nearly a quarter of a million by the year 2003.
Bilateral Initiatives
It is because of the breadth and depth of our relationship that I am pleased to be able to announce two tangible initiatives which demonstrate the importance of Hong Kong to Australia.
First with AustCham and individual business sponsors, the Australian Government has decided to launch a "Celebrate Australia 96" program in Hong Kong next year - this will include a comprehensive calendar of trade promotions, cultural and sporting events.
An important aim of "Celebrate Australia 96" will be to emphasise the presence and contribution of the Australian community in Hong Kong and to demonstrate Australia's faith in, and commitment to, Hong Kong's long term future.
I am also very pleased to announce that Hong Kong will be one of the nine economies featured in our major trade event, the National Trade and Investment Outlook Conference, in December this year, under the very appropriate theme, "Australia and Hong Kong - Partners in Business in Asia".
Dr Victor Fung, Chairman of the Hong Kong Trade Development Council, has kindly agreed to be one of the keynote speakers, and we are inviting a high-powered delegation of Hong Kong business executives to help more Australian companies find out about what an exciting place this is to do business, and to encourage even more investment and trade to flow in each direction.
It is clear that Hong Kong is also investing in the long term future of our economic partnership. In particular, we very much welcome the opening of the Hong Kong Economic and Trade Office in Sydney next month - we regard this as a welcome sign of commitment and optimism.
Australian Interests in Hong Kong's Future
Clearly, Hong Kong is important to Australia not only for what it is now, but for its potential into the 21st century as a partner in the dynamic economic development of the Asia-Pacific region, and as a collaborator in the process of global and regional trade reform. In taking this very positive view of the future, we are naturally conscious of the challenges facing Hong Kong.
Australia's approach is that it should be business as usual with Hong Kong over the coming years, for we all have an important stake in the stability and prosperity of Hong Kong.
It appears to me that the framework exists to ensure that Hong Kong can continue to prosper as a dynamic economy, as an entrepot to China, and as an international business centre. Central to this framework is the "high degree of autonomy" promised to Hong Kong in the Joint Declaration and the Basic Law.
Furthermore, from my discussions with Australian companies doing business in Hong Kong, I know there are particular issues which they would like clarified to assist them to make plans and decisions about their future activities here.
Both the rights of Australian business people and the nature and quality of the business environment in the Hong Kong Special Administrative Region will be important considerations.
First, particularly because of the sizeable and growing Australian community in Hong Kong, clarification will be necessary from China on issues such as right of abode and nationality.
Second, predictability and clarity in the rule of law will also be important. The recently agreed provisions for a Court of Final Appeal have been a major step forward. Early action is needed to ensure that the relevant international conventions on commercial arbitration can be applied seamlessly through the transition.
Third, Australian business would expect without reservation that agreements entered into will be adhered to now and in the future. In this context, the Australian Government views with concern the trend in negotiations with the Hong Kong authorities on air services, and we look to the negotiations over the next three and a half months being conducted in accordance with the spirit of our bilateral Air Services Agreement, which was approved by the Joint Liaison Group and entered into force in 1993.
Finally, Hong Kong's success as an international business centre is closely linked to accountable government and a tolerant attitude to civil liberties.
Now, these issues are not just matters of theory for political scientists and lawyers to discuss at seminars and conferences. They impact very directly on the ability of businesspeople to do business with confidence in the legal and political environment in which they are working.
Unfortunately, they are reflected very clearly in the James Peng case in China. The Australian Government takes most seriously its responsibility for ensuring that all Australian citizens abroad - such as James Peng - receive the rights to which they are entitled.
My Government is deeply concerned that resolution of Mr Peng's case continues to be delayed. When in China, I intend to make very clear that the continuing delays in bringing this case to a conclusion are extremely difficult to understand and accept. This is a message my ministerial colleagues and other senior Australian office holders have carried with them to China over the past two years, and we will continue to do so until the issue is resolved.
We have a good and productive relationship with China - I would expect that the Chinese Government, like us, would not wish to have this issue interfere with the many positive elements of the relationship.
Regional Economic Integration
Ladies and Gentlemen
So far today, I have focused very much on Australia's interests in building on the very real successes of our bilateral relationship with Hong Kong.
But no discussion of the potential for, and significance of, the Australia/Hong Kong relationship can ignore our shared interests in the wider regional and international economic order.
The increasing level of economic integration in our region is becoming blindingly obvious, with some 60 per cent of overall APEC members' trade being with other APEC members.
This focus is even stronger for Australia:
- 73 per cent of trade is with other APEC economies
- over 60 per cent of our exports now go to East Asia
Not only does North East Asia account for the largest share of this but South East Asia last year replaced the European Union as our second largest regional market.
Hong Kong's relationship with the region is similarly very close, with 80 per cent of its trade taking place with other APEC economies and 65 per cent with East Asia.
We can all also see what an important role Hong Kong is playing in China's economic transformation and how the futures of China and Hong Kong are interconnected.
As I understand it, around one third of Hong Kong's trade is with China. Hong Kong accounts for about 60 per cent of realised direct investment in China, and over 22,000 Chinese enterprises are doing business in Hong Kong.
For Australia, Hong Kong's dynamic role in China's economic development is very much valued, because of the importance of both economies to us. China is Australia's sixth-largest trading partner and much of the Australian investment in China is planned, coordinated and financed through Hong Kong.
Underlying the economic performance of our region is a clear understanding of the overwhelming economic advantages that are available from the opening up our economies - unilaterally, regionally and multilaterally.
The rapid development of the outward looking economies in East Asia is the clearest evidence of the benefits to be gained from a commitment to free trade. And nowhere has there been a clearer commitment to free trade than in Hong Kong - a commitment shared with Australia in the WTO and APEC.
This shared commitment could not have been more apparent than last year in Bogor when the APEC leaders took the decision to commit themselves to free trade and investment in the Asia Pacific - by no later than 2010 in the case of Australia, Hong Kong and other industrialised economies, and no later than 2020 for everyone else.
Hong Kong is an energetic and constructive partner in APEC and we are working closely together for an ambitious outcome at Osaka to implement the Bogor commitment. In fact we would welcome Hong Kong's voice being heard even more strongly in APEC forums.
Regional trade liberalisation through APEC remains the highest priority for both Australia and Hong Kong, but it is also clear that this cannot be the limit of our focus.
The demands of business, the rapid pace of change in the world economy, and the ever increasing international linkages reflected in the globalisation of industry make this impossible.
Hong Kong and Australia are both global trading nations. As middle-sized economies, we share a powerful vested interest in strengthening the rules-based multilateral trading system. That is why we must continue to cooperate in the lead-up to the inaugural WTO Ministerial Conference to be held in Singapore next December.
The Singapore Conference will provide an important opportunity to chart the way in which we continue the task of strengthening and extending the multilateral trading system and to start the process of building momentum for a new set of multilateral trade negotiations as soon as possible.
It is an opportunity none of us can afford to ignore.
Conclusion
There is no doubt that Hong Kong faces a unique set of challenges as it approaches the 21st century. But, in Australia, we will face our own challenges. How well we both respond to these challenges will, in part, depend on how well we work together.
I am sure that with the same drive and entrepeneurial capacity which has made Hong Kong the success it is today, it can continue to prosper into the next century, and I assure you, there will be strong support from Australia in the pursuit of that goal.
Australia will continue to see Hong Kong as a very important business partner and firm friend in the coming years, not only because of our substantial direct economic interests here and our interest in Hong Kong's ever-expanding role as a vital interface with China's growing economy, but also because of the strong people-to-people links between Hong Kong and Australia and the major stake we both have in the prosperity of the regional and international economies, and because of the essential complementarity of our strengths - Australia's strength in Research and Development and innovation, and the recognised entrepeneurial flair of the Hong Kong Business community.
Australia and Hong Kong find ourselves in the fortunate position that the actions we need to take to advance our own economies will help each other, and the regional and the global trading systems.
It sounds almost too good to be true. But let's not hesitate, let's just do it - together.