Former Minister for Trade
Australian Commonwealth Coat of Arms

Speech

Launch of Business Club Australia Beijing 2008 and Address to Austcham Beijing on ‘Australia-China: Opportunities and Challenges’

Beijing, 16 April 2008

Salutation and introduction

Ladies and gentlemen, it is a great pleasure to be here tonight with you, members of the Australian Chamber of Commerce in Beijing, to launch Austrade’s Business Club Australia Beijing 2008.

This is my third opportunity to address the Australian Chamber of Commerce here in Beijing, during what is my sixth visit to China.

This year marks the 35th anniversary of Gough Whitlam’s first visit to China as Prime Minister, a year after he established diplomatic ties with China. 

Interestingly, my father accompanied Gough to China on that trip as Treasurer and it is great to be back here today as Trade Minister and to continue my family’s link with this fascinating country.  

BCA Beijing 2008

BCA Beijing 2008 is the Australian Government’s official international business program to leverage networking opportunities provided by major events like the Beijing 2008 Olympic Games.

The Club also has the official endorsement of the Australian Olympic Committee.

The program is an example of partnership between business and government, and it has a strong track record.

Using the networking opportunities provided by key international events like the Sydney 2000 Olympics, Melbourne Commonwealth Games and successive Rugby World Cups, it has helped facilitate trade and investment outcomes for over 300 Australian companies with a total estimated value of A$1.7 billion[1].

BCA Beijing 2008 which I’m delighted to launch today will be based here at the Hilton Hotel.

The program will deliver an exciting calendar of networking events (in close alliance with Austcham), in the run up to and during the Beijing Olympic Games.  

They will span a range of sectors, from financial services to mining equipment and technology and from clean energy to sports infrastructure and services.

BCA also has a growing roster of corporate supporters who will be announced within the next few weeks.

There are also special opportunities for Austcham members to become involved in the program, through Austrade and Austcham networking activities, to help strengthen existing business relationships, make new contacts and expand their presence in China. 

I understand more details will be announced this evening

BCA will also have Austrade’s China network at its disposal.  That’s 15 offices and 90 staff across China and Hong Kong.

Australia-China Free Trade Agreement

I wanted to take this opportunity to make a few comments about the Australia-China relationship. 

It is indicative of the growing importance and strength of Australia’s  relationship with China that Prime Minister Rudd visited here just last week as part of his first major overseas trip. 

The visit went extremely well on many fronts. 

The Prime Minister outlined to you (Austcham) in his dinner speech on 10 April that a major objective of his visit was to restart the free trade agreement (FTA) talks with China.

Encouragingly, there was agreement between the Prime Minister and Premier Wen Jiabao to “unfreeze” what has been the frozen bilateral negotiations for an FTA between our two countries. 

As the Prime Minister said after his meeting with Premier Wen “..this is important for both of us.  We are both committed to ensuring that this is a broadly based, comprehensive and substantive free trade agreement”. 

It is timely that so soon after the Prime Minister’s visit, I now have the opportunity via the Joint Ministerial talks with Commerce Minister Chen Deming to build on the momentum created by the Prime Minister’s visit. 

In taking the FTA negotiations forward, my objective over the next few days is to:

A key objective for Australia in all FTA negotiations is comprehensiveness and ambition. 

That is, all sectors are to be included in the FTA and the outcome should enhance what can be achieved via multilateral trade negotiations. 

The FTA must cover agriculture and manufacturing, where there are sensitive issues involved on both sides. 

Significantly there is also tremendous opportunity in the services and investment sectors.

That is financial services, education, logistics, infrastructure design and development and other professional services.

Capital flows between our two countries is also critical because the whole nature of trade has changed these days.

It isn’t any longer just about producing goods and services in Australia to export to, say, China or any other country.

It’s also about direct investment into countries like China, if the trade and economic framework is supportive of that, not so much to take advantage of cheaper costs, but significantly to take advantage of significant growth in China’s domestic market.

Given China’s manufacturing export base, that will also enable Australian companies to get into global supply chains which are driving the growth in international trade. 

The reason is simple.

The growth in world trade has been three times faster than the growth in world output.

If any country wants to secure its economic future, big or small, developed or developing, it must engage with trade.

And trade policy must engage with and foster a more liberal, open, accessible market culture.

Now if we can break through that – and this is why we have the momentum not just through the free trade agreement talks but also through Doha talks of the World Trade Organisation - the multilateral round – if we can get improved access, then we’re well on the way to securing the economic future for many countries.

That’s what our trade policy needs to adapt to.

It needs to adapt to it in policy terms at home.

And it needs to adapt to it in terms of investment flows.

So far, investment flows between Australia and China remains small compared with the wider trade relationship.

Australian companies had invested $3 billion in China by the end of 2006, while Chinese investment in Australia reached $3.4 billion.

We’re keen to expand the scale of investment flows in both directions as it is a key driver of closer economic engagement.

The incorporation of Invest Australia into Austrade will help us with this process.

A survey released in Australia yesterday by the Diplomat Magazine indicates that the Top 100 Australian companies investing abroad earned $220 billion in income last year. 

That is a greater than Australia’s export income last year of $217 billion. 

To examine these issues and to better position Australian companies to pursue the opportunities opened up by improved market access at the border I have appointed David Mortimer, Chairman of Leightons and Australia Post, to examine our trade policy settings behind the border. 

This is a whole of government approach that is critical to ensuring that our policies behind the border including infrastructure, education, skills, training, innovation, and regulatory arrangements enhance our productivity performance and international competitiveness. 

In 2007 Australia recorded zero productivity growth – that’s right zero productivity growth. 

We are not going to be able to compete internationally, we are not going to improve our export performance and we are not going to get our economy onto a sustainable footing beyond the resources boom if we do not improve our productivity performance significantly. 

This is a key objective of the Australian Government and one which will greatly determine our future prosperity.

I’ll also be emphasising during my visit here that Australia and China both have a critical interest in seeing the Doha Round of world trade talks concluded this year.

We cannot let this opportunity pass to make a difference to the world’s poor – and to deliver on the development promise of the Doha Round.

A successful and strong conclusion to the Doha Round would be an important response to meeting the challenges that high world food prices are posing for many developing countries. 

By reducing the costs of market access barriers in agriculture and cutting export and production subsidies when producer incomes are high, the world has an opportunity to make a real difference to the lives of those who are most affected by high food prices.

China has an important responsibility in showing leadership in efforts to conclude the Round and I look forward to working with my counterpart Chen Deming in coming weeks and months to this end.

Conclusion

Ladies and gentlemen, I’m delighted now to declare Business Club Australia Beijing 2008 open. 

It’s the next chapter in what has been a great success story.

I understand that some 35 Australian companies have already taken advantage of the opportunities presented by the Games and secured new business. 

They include architects PTW who designed the Beijing National Aquatics Centre (the ‘Watercube’) and Bligh Voller Neild who had a hand in the design of five venues across the city.

Let’s use this networking opportunity to get even more runs on the board for Australian businesses in China.

It is our goal that many hundreds of Australian companies take advantage of this business platform, in order to establish immediate contacts and build for long-term, sustainable links. 

You can be sure Austrade, and the Government as a whole, will be working to do everything we can to help you.

Thank you.


[1] Austrade figure

Media contact: Mr Crean's Office (02) 6277 7420 - Departmental (02) 6261 1555