Director General Zhou Lujun
Four years after the start of the Global Financial Crisis, the world economy remains unstable, with high unemployment, heavy debt and low or negative growth bedevilling many developed countries.
Both Australia and China, however, continue to grow, having avoided recession even in the worst times of the crisis.
In both cases government action was crucial. Both countries took decisive action when it counted, and weathered the turbulence through targeted spending to support jobs.
The strong trading relationship between our two nations has also been crucial to our resilience against the worst effects of the crisis.
This relationship has traditionally been dominated by trade in goods.
But it has for some time been broadening to include greater two-way investment and more trade in services, including financial services.
This is so much the case that in 2010 China became Australia’s biggest services export market. Chinese demand for Australian education and tourism accounted for a large part of this. And I expect this trend to continue.
But as China’s prosperity and domestic consumption increases, along with its urban population, this growing demand for services will widen to encompass the full range of professional, educational, and sophisticated financial services.
Just as Australia has been able to satisfy growing Chinese demand for education and tourism, so Australia is also equipped to meet developing demand for the full suite of services.
We can help design the cities of China’s future. We can help improve its environment. And we can cater to the professional demands of an increasingly affluent people.
It was with this in mind that I led the Australia-China 2.0 trade mission to five fast-growing, regional cities in China last August. It was probably the largest trade mission ever to leave Australia.
And I am pleased to say it was a resounding success. It led to big-name Australian companies such as Telstra and the logistics and retail services provider Goodman accelerating their plans to expand operations in China.
The creation of Australia’s open, competitive economy from the mid-1980s and our economic integration with Asia, and China in particular, explain Australia’s strong economic fundamentals today.
Australia has solid growth, low unemployment, contained inflation, strong public finances and a net debt-to-GDP ratio of about one-tenth of that of the major advanced economies.
Australia is also expected to grow faster than every single major advanced economy over the next two years.
And the OECD has just recently reported that Australia has the strongest growth prospects of all developed economies right through to 2050.
As well as healthy trading relationships, Australia’s economic strength is based on a mature financial system; a system which is judged among the world’s strongest.
One of the most important reforms the Hawke Government achieved was also among the first: the floating of the Australian dollar in 1983.
China is currently in the middle of a period of reform that bears some similarities to ours, including moves to increase the internationalisation of the renmimbi.
The recent currency swap agreement between People’s Bank of China and the Reserve Bank of Australia represents another step along this path, and one which the Australian Government has warmly welcomed.
Our shared experience of reform also makes Australia and China ideal partners in the financial services field.
Many of Australia’s and China’s financial institutions are already established in both countries.
All of Australia’s ‘Big Four’ banks, for example, are now active here.
Just this month ANZ Bank announced it would boost its investment in China, spending an extra two billion renmimbi - 300 million Australian dollars - to expand its branch network.
Similarly, China’s top five commercial banks are building their presence in Australia.
The People’s Bank of China is also the only foreign central bank to have set up a representative office in Australia.
The AustCham Report I am launching today highlights opportunities for financial service providers from both countries to contribute to our economic development.
Australian financial service providers can assist China build its own financial capability by sharing their world-leading expertise.
Australia’s superannuation – or private pension – system has helped create the largest pool of funds under management anywhere in Asia, and the fourth largest in the world.
The skills required to manage these assets, together with Australia’s capacity in banking and insurance, can help China meet the financial demands of a growing middle class.
Australia is also a good reference for international best practice in financial services technology, regulation, corporate governance and risk management.
I congratulate AustCham, and in particular the Chairman of AustCham Beijing, David Olsson, on this valuable contribution to the policy discussion on promoting financial services.
Your on-the-ground experiences and expertise complement the work of government in advancing Australia’s interests.
I am happy to report that the Chairman of the National Development and Reform Commission was the first recipient of this report when we met yesterday and I handed him a copy.
Australia’s financial service providers are keen to continue investing in China.
The companies tell me they want to work closely with their Chinese counterparts to drive growth, increase capacity and further integrate our two markets.
However, as identified in the Report, there are still areas where more reform could improve financial stability and competitiveness.
These include measures to boost equality and consistency of market access, increase transparency and improve regulation.
By working together, Australia and China can remain strong even as many other parts of the globe continue to confront economic uncertainty.
However, we must continue to reform to remain competitive, and open our economies to the full benefits of trade.
And, finally, I am delighted to announce that AustCham and Austrade have agreed to undertake jointly a China Business Perceptions survey, which will collect the experiences and perceptions of Australian companies and businesses operating in the dynamic and unique Chinese business environment.
Despite the strong business links between Australia and China there has to date been no China-wide survey undertaken of Australian businesses in China.
This survey will provide an overview of the outlook from within the Chinese market; how Australian companies are performing, their plans and the challenges they face.
The survey, which will be undertaken annually, will provide a valuable source of information for businesses, and also enable Australian businesses on the ground in China to recommend specific policy adjustments that address the regulatory and other challenges facing Australian businesses in China.
It is also likely to be helpful to China's policy makers in understanding the challenges that Australian businesses face when seeking to operate in this market.
- Minister Emerson's Office: (02) 6277 7420
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