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Acknowledgements

Director-General of the Jiangsu Financial Services Office, Mr Wang Quan

Deputy Director of the Zhejiang Financial Services Office, Mr Bao Chuntian

ASIC Commissioner, Mr Greg Medcraft

Australian Ambassador, Dr Geoff Raby.

Austrade Chief Executive Officer, Mr Peter Grey

Australian Commissioner-General to Expo, Ms Lyndall Sachs

Australian Consul-General, Mr Tom Connor.

Distinguished guests, ladies and gentlemen.

It's great to be back in Shanghai.

I'd like to begin by congratulating the people of China and the host city of Shanghai for staging this wonderful event.

I am particularly pleased the Australia's national pavilion is proving so popular with Chinese and other international guests.

It makes a bold statement about the creativity and the innovation of Australia, and is a terrific showcase for the quality of all that Australia has to offer.

This is my 7th visit to China as Minister for Trade in the Rudd Government. I keep coming back because I regard China not only as a valued friend, but because China is a market of so much promise and opportunity for Australian business.

During these frequent visits, I have sensed a marked shift in China's perception of Australia's financial services sector.

In discussions at all levels – national, provincial and municipal – leaders have been unprompted in expressing fundamental praise and recognition for Australia's success in weathering the Global Financial Crisis.

Australia's economic resilience through the Crisis comes down to three key factors.

First, the Australian Government took quick, decisive and effective action to stimulate the economy.

Second, Australia benefited from structural reforms of the 1980s and early 1990s, including the floating of the Australian dollar.

And third, Australia benefited from its trade and investment links to the economies of Asia, particularly our links with China.

These three factors helped to ensure the very strong performance of Australia's financial services sector.

Also unprompted throughout this visit has been the respect for Australia's financial services sector. There is a clear recognition that Australia has much to offer in this space.

In a few minutes Greg Medcraft, Commissioner of the Australian Securities and Investments Commission, will speak in detail about ASIC's role in regulating Australia's securities markets.

Let me set the scene for Greg by saying a few words about the very strong reputation of Australia's financial services sector.

My message this evening is simple. Australian companies want to work with Chinese companies and regulators to participate in Shanghai's bold plans to become an international financial services centre.

Australia was the world's fastest growing advanced economy in 2009.

We will return to surplus before any other major advanced economy, and we will pay off our Government debt three years before any other major advanced economy.

Last financial year, the sector generated more than 10 per cent of Australia's GDP and is now the largest contributor to employment and economic growth.

Australia's system of financial market regulation is regarded around the world as a model for balanced yet flexible prudential supervision.

There are only nine major banks around the world that currently have a credit rating of "AA" or above. Four of those nine banks are Australian, all four have invested here in China, and all four have representatives here this evening.

Australia has one of the largest pools of funds under management in the world, now standing at around A$1.7 trillion (US$1.5 trillion), with more than 70 per cent of this being pension fund assets.

Australia is home to the largest stock market by free-float market capitalisation in Asia outside Japan, and it ranks seventh in the world.

Australia has the fastest growing foreign exchange market in the Asia Pacific and seventh largest market in terms of global turnover. The Australian dollar is the world's sixth most traded currency.

In the Asia-Pacific, we rank as the largest securitisation market, the second largest debt securities market, the fourth largest insurance market, the largest merger and acquisition market, and the largest hedge funds market.

As China develops its domestic financial sector, I encourage Shanghai to consider all that Australia has to offer in terms of world class financial services.

I can see tremendous opportunities for joint ventures and other types of partnerships, for the licensing of IT and trading systems, and for exchanges in areas such as prudential regulation.

Australian financial service providers are already active in China in banking, insurance, funds management, securities and consultancies.

These Australian companies are looking to expand their operations and to expand their contribution to the development of China's financial sector.

In some market segments, however, China still imposes tight limits on the operation of foreign financial sector firms, and some Australian companies have reached the limit of what is permitted under the current regulatory regime.

To help Australian companies overcome these hurdles, Australia is continuing to push hard for commercially meaningful outcomes in the financial services sector through our bilateral FTA negotiations with China.

We do not expect the FTA will result in sweeping changes to China's existing arrangements, but we are seeking better market access and a regulatory framework that encourages new investment.

Ladies and gentlemen.

This is a critical moment in Shanghai's history.

The decisions that China makes today – about strategic partnerships, about market access and about the regulatory environment – will help shape the prospects of Shanghai's financial services sector for decades to come.

Australia, for all the reasons I've just outlined, is uniquely positioned to contribute to the healthy development of this sector.

Shanghai's 2020 plans are already beginning to take shape - so now is the time we should be seizing the opportunity to strengthen cooperation in this critically important sector.

ENDS