Transcript - E&OE
15 July 2009, Wuhan, China
Joint Doorstop Interview with Senator Carr
Wuhan, China
Subjects: Automative Industry; Free Trade Agreement; detention of Mr Stern Hu.
MR CREAN: We had a very good meeting with the Vice Mayor of the municipality today. It was a follow up to discussions I had two months ago in which the city of Wuhan had identified the great challenge it faced in terms of urban development and housing. They had sought our assistance and I brought a mission, a business mission to Wuhan on that occasion to investigate the potential for smart buildings, energy efficient buildings, water pollution, waste management, all of those sorts of issues. Wuhan city on that occasion said that they had three major developments in the city that they were seeking Australian cooperation in. We jumped at that opportunity given the discussions, and their agenda and our expertise. Today we have witnessed a MOU between the city of Wuhan and the Australian Government to give focus and substance to us going forward. So I'm quite excited by this, it's something that's emerged within the space of just the last couple of months. It is in response to a different sort of development and trade cooperation issue and so I welcome it very much.
I'd also say that I had an excellent dinner last night with the Governor of Hubei Province who has responsibility overall for the economic development of the province - a province of some 61 million people. He and I discussed the prospect of developing a framework agreement to identify and prioritise other areas of cooperation.
Today we visited the Dong Feng Motor factory which was one of those areas of cooperation identified - the automotive sector. And this too was a return visit from one I paid two months ago in which Dong Feng is in the process of developing its own brand of vehicle. Up until now, it has done it in joint venture and we visited one of the joint venture operations today. In developing their own brand, they too understand the strength of the Australian automotive sector. They too want to develop cooperation on that front. And they also agreed on a working party of officials to go through and prioritise the sorts of areas that we can produce that cooperation from. So all in all it's been a very successful visit. Two significant regions that in total are 125 million people. Two significant regions, both of which want to prioritise and put into a framework a better statement of the relationship with Australia. So, we're targeting regions, and within those regions we're targeting sectors - which is the smart way to take the relationship forward and I'm delighted with the outcome.
JOURNALIST: I mean, the automotive parts industry in particular is doing it very tough at the moment in Australia - is this a sign of hope for them?
SENATOR CARR: This is an opportunity for us to be able to assist the Australian automotive industry move into a more international framework and to build on their existing strengths right across the board - in innovation, in industry policy, in science and research, we know that the problems that we are facing today can't be fixed by just one country. And that we need international cooperation to get the very best out of our people. This is an issue that is about assisting thousands of Australians with new jobs and to sustain the jobs that they've got. This is about creating economic opportunities for Australian workers and for the Australian people - as it is for the Chinese people and the Chinese workers.
JOURNALIST: When do you expect that those jobs will be able to flow through?
SENATOR CARR: That will be flowing through quite quickly. One thing that you cannot not be impressed by is the speed with which this country moves. What we're looking at is growth rates of up to 15 percent throughout central China. These are enormous in the significant areas of economic development and what we are seeing are some companies with up to 40 percent growth rates - individual companies. So the prospects for new economic opportunities arising very quickly I believe will become very self evident. We've already seen in Shanghai what that means in terms of our engine plants. We'll see it in regard to other component manufacturers as well - I'm absolutely convinced that these arrangements will lead to thousands of jobs for Australians.
MR CREAN: And just to underscore that point about speed, I mean that's the reason we've come back so quickly. And that's been appreciated by the authorities here. And the initial contact that's been made with the Anhui Province - and of course to follow up in Shanghai which we've had associations with for a long time. This is the time to strike. Because the car industry is undergoing fundamental global restructuring. This is the largest automotive manufacturer and the largest automotive market in the world - and Australia, with its strength, has to be part of it.
SENATOR CARR: There's a wave of opportunity sweeping through this region and we want the Australian industry to be able to ride that wave. What we're looking at is the prospect of us being able to participate in the next phase of the development of the Chinese automotive industry. The Chinese automotive industry is developing their own models, they want to break away from the joint venture model that they've seen in so many other areas. They want to concentrate on the creation of indigenous models at the high quality end of the market and that's where we can play a significant part.
JOURNALIST: Just on the trade question, most of our trade with China is obviously raw materials. Do you see the proportion of finished goods, if you like, value-added goods, rising over time?
MR CREAN: I do. But I also see - and of course the auto sector is one of those areas of activity - but I mean, you think about it, processed food, many areas of manufacture. Well, it's the services side and the investment equation that I think has the greatest scope of all. The MOU that we've witnessed today is essentially a combination of services and manufacture. And it's services off our innovation and research base. Now, this is the reason I think that we have to understand what is happening on the ground. And to realise that China has moved up another cog. It is at the stage, not just of rapid development, but of looking for the quality in the outcomes, understanding it isn't just about meeting local demand, it's about positioning themselves in the global marketplace. For that, they need partners that understand the importance of quality, that are good on the design, good on innovation. And if you think about our commodity base, Tom, and our agriculture base which has been the traditional focus of activity - it's the services dimension and the value-added dimension, manufactured goods, elaborately transformed manufactures and services that holds the potential. That's what we want to tackle. And that's why we want a comprehensive free trade agreement - deal with the sensitivities in the traditional areas but understand the great potential that's there in this vast array of opportunities. Have confidence in our strength, have confidence in the relationship that we have with China, and move it forward.
JOURNALIST: So are you really able to nail those opportunities without an FTA?
MR CREAN: Yes, I think we can, but an FTA will I believe help put the national framework and define the context in which we see the relationship going forward nationally.
JOURNALIST: But how close are we to getting nailed those sensitive issues?
MR CREAN: I think, depending on the response from the Chinese Government, we can be very close. But the ball is in their court. I've said this on a number of occasions. But not deterred by the frustrations with the complexity of negotiating the framework, we've also launched the second track approach - that's why we're here in the regions looking for the commercial opportunities. Quite frankly, if we can put substance to the commercial opportunities, that is going to drive the need for the FTA.
JOURNALIST: [inaudible] any more news on Stern Hu today, have you had any contacts, any updates?
MR CREAN: I've had no further information on the matter today.
JOURNALIST: Ok, thanks.
MR CREAN: Thank you.
[ENDS]
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