• Home
• Media releases
• Transcripts
• Speeches
• Statements
• Current Minister
• Department

QUESTION: Thank you, Minister. My name is Feng Chen from China Radio International. As you mentioned just now that the 14th round of Free Trade Agreement (FTA) talks will take place - between China and Australia will take place soon. So what are the expectations of this round after a one year stalemate, and in your opinion, what will be the most tricky issues? Thank you.

SIMON CREAN: My expectation is that we will discharge the recommittal of political will that was importantly made when Vice-Premier Li Kequiang visited Australia at the end of last year and met with the Prime Minister. A recommittal that was reinforced in meetings I had with Chen Deming in, I think, it was Singapore, later.

The stumbling blocks still, in essence, remain sensitivity surrounding agriculture. These are sensitivities, I believe, we can address but we can't ignore. And it is clearly impossible for Australia to accept an FTA outcome that is lesser than China has already offered to New Zealand when it comes to agriculture.

Agriculture aside though, my expectations are that as difficult as agriculture is, the big opportunities between Australia and China lie in the areas of services and investment. China has continued to argue its desire to invest in this country, and practically all of those investment proposals have been approved.

But investment is a two-way street. Investment is a new form of trade. Investment is taking place not because you want to put a toe-hold in a country just for the purposes of it, but because you're trying to get closer to a bigger market or because you want to take part in a global supply chain.

If investment is the new form of trade, we've got to have instruments and frameworks that reflect the modernisation of that development. And I think that the opportunity through the free trade agreement should enable us to get a modern framework in place that is reflective of the breadth and diversity of the economic relationship between Australia and China, which in my view, clearly can be deepened and diversified even further.

QUESTION: Thank you, Minister. Khodr Saleh from Saudi Press Agency. As you may know, Minister, the trade and investment relationship between Australia and Saudi Arabia has increased recently. The Saudi investment in the education market has jumped from $50 million in 2006 to $500 million in 2009. Also I believe the student has - the Saudi students who study in Australia reached more than 11,000 in this recent year.

Also the more than 120 local staff, Australian local staff, work in Saudi Culture Attaché in Canberra.

My questions here, how you as a Minister, evaluate this relationship, and how the Australian Government think to provide a support and promote this profitable market in Australia.

SIMON CREAN: I think the importance of Australia's trade relationship, it goes back - it doesn't matter with what country. Australia is a very diversified economy that has a reputation for that which it does, it does well. It produces a quality product. The education sector is very much in that league, and that's why education services is now our third largest export.

I think going forward in terms of export services, the interesting equation to contemplate is why just bring the students here if there is an ability to do the training within country.

Now, that involves some important decisions within countries about the role of education as a public good, whether it's provided only to government authorised institutions or whatever. But I was struck in South Africa at the presence of the Monash University there in Johannesburg, which is a $150 million investment and providing vital education and training opportunities to students from all over Africa in a way that is a seamless international university.

So I think the institutional side of it, I think the opportunity is huge.

So far as Saudi is concerned, I think on the bilateral front there are important issues for them at stake. I think that not energy security; I think they're in a fortunate position of having that, but it's in oil. But it struck me when I was there how much resource was under the ground, not out in the Gulf, and yet not tapped.

This is true of many countries in the world - Africa, the Philippines, Papua New Guinea. You just look at the region. If a world hungry for resource and energy security has the reality of the resource but the inability to extract it, then there is opportunity, it seems to me, for the strength of our mining sector, which isn't just about the fact that we have the commodity, but the fact that we're the most efficient producer and shipper of it anywhere in the world, and we know how to rehabilitate, we know how to deal with indigenous communities and all of those sorts of things.

So the services dimension of mining and the services dimension of agriculture become terribly important in addressing food security, which is a big issue for Saudi and why they're looking to investment in this country to help secure that base.

I think rather than trying to do it just through the investment drive, far better to try and get a framework that is encouraging of it, understanding the particular aspirations and the opportunities of the countries in question.

Now, when it comes to trying to do the FTA with Saudi, the decision that had been taken over there is that it has to be the Gulf as a whole, we would clearly like to advance the Gulf Cooperation Council FTA. That too has been stalled, but Saudi has a key role to play, and that's why I've spent some time with your Government and visiting your country to try and convince them not only of the importance of the two-way relationship, not just either in education and students, but far beyond it, and the importance of looking at the region as a whole.

And I might just finally make the point that one of the other things that struck me when I went to Malaysia and to the Middle East, the importance of Islamic financing. And this is why as part of the Johnson Report, and we announced the other day and released the working paper on this, I think there's a huge opportunity in the financial services sector in this space.

QUESTION: Hi to you, Minister. My name's Christina from [indistinct] Radio. We broadcast through internet local time and also short-wave direct to China mainland.

I have a direct question without sugar-coat it, if you don't mind. A lot of people want to know, you did mention, you know, China play a very important role and also will continually play this role, but we all know it is different system from the western country, and without me mentioning, you know, the Rio Tinto cases.

So how much concern do you have with dealing more, and also do you think our government - how do you ensure the government can protect the benefit of Australian company and also the businessperson there? Thank you.

SIMON CREAN: Okay. Look, I think this is a very important question and as much as we would like to think that we all operate under the same rules, we don't. And whether it's China, because of its political system - and it's not unique in Asia - I mean Vietnam, for example - these are countries that have had a history either because they were colonised, or exploited. But they don't forget. And if we don't understand that as an under-pinner in their culture, we're doomed to fail in terms of advancing the relationship.

So I think understanding, first of all, the history and the approach that they come to, in trying to embrace westernisation - and embrace seems probably the wrong term - deal with westernisation, without having made a conscious decision to embrace it - and probably, in a number of cases, they don't want to embrace it - we have to live with that.

It's also true that people who do business in other countries have to observe the laws of those countries. So often consular cases that rise in the context of problems, we're dealing often with circumstances in which the laws that apply there, we don't apply here and people are trying to make judgements about application in accordance with Australian law. We can't impose our legal system, or those standards on China, just as we wouldn't want China to be imposing theirs on us.

So your question then is; how do we deal with that? I think we deal with it by understanding it and by having a political dialogue, not just a government-to-government dialogue and, certainly, not a megaphone diplomacy approach.

We've continued to treat the Stern Hu case as a consular case. We've argued for its expeditious and transparent handling. We continue to do that. It's gone from the Procuratorate to the legal system and there's a timeline for that being dealt with.

But so far as the economic relationship is concerned, I'm convinced that what's going to drive that is the realisation that both our economies are heavily dependent on each other. And if that's the bind - and it's not just related to China. I think it's true of so many countries - you get - you go back to the essential elements that countries need; mostly developing countries, but it's not limited to them - need for sustainability. Energy and resource security, food security, water and skills development, because skills are the determinant of how a nation's able to adapt and embrace and grow and sustain itself.

Australia can play in all of those areas, in a quality way. What we've got to do is to get the market openings. That's what we're finding difficult in a number of these FTA negotiations: China, Japan, Korea. But we will persist, because in the end what we'll win over is the realisation that it's mutually beneficial and mutually reinforcing. And quite frankly, the student movements and the people movements are the most important, because that way people get a better understanding - much better understanding, deeper down - not just at government-to-government level - deeper down, as to what the cultural differences are, what the attitudes are, what the objectives of the Government are.

I think through that better understanding, we'll make it. But when I was Opposition Leader, I established a political dialogue between the Labour Party and the Communist Party of China, because I believed it was important to have a party-to-party dialogue to deal with sensitive issues, as much as a government-to-government dialogue, particularly when you take account of the fact that in China not all government ministers are politicians. Key ones are, and that's important. But you've got to have a dialogue on both levels, and we do.

QUESTION: [Indistinct] Japanese newspaper. Now my Chinese friend asked many a blunt question to you, so I have too I think. Well, now, about the free trade negotiations with Japan, what kind of the break do you expect for your government, especially this weekend, when new Foreign Minister will come to you in Australia.

This is the first Cabinet visit under the new government since last general election. Just one question.

The other one is - I'm sorry about asking this, but [indistinct] after what whaling, because I think Japan and Australia have enough longevity relationship; do you accept and respect the differences of opinion. But - so, I'd like to ask you about how - what you will - what also government do about deal with the Sea Shepherd, because in Japan - especially the beginning of this year - the public opinion has the perception that Australian Government support the criminal activity, by pirates, on this South Pacific Sea. So it's very hard to change such perception. So I think the Australian Government should deliver a more clear message to Japanese people about this issue I think. Thank you.

SIMON CREAN: We don't - just on the whaling question first. We don't condone lawlessness at sea and we've made that position clear publicly, as well as directly. And I had the opportunity to speak to Minister Akamatsu in Davos a couple of weeks ago, where I made exactly that point and he accepted that position on our part.

Clearly, what happens in international waters, we haven't got an ability legally to deal with. International law has to take its course.

And on the issue of whaling more generally, I agree with you that the issue of whaling - because we do hold such differences between the two governments - it shouldn't - it should not interfere with the other aspects of our bilateral relationship, around which we hold a lot in common. We're still pursuing a diplomatic solution in terms of whaling. We'll continue to persist with that.

We welcome very much Minister Okada's visit here next week. I had the opportunity to meet with him in August last year, just after they'd been sworn in. Had very good access and it was a very busy time, because the Diet was just about to meet.

We really see the team in government in Japan as people that really do want to drive forward in terms of strengthening the relationship. And Minister Okada is at the forefront of that. But so too, very supportively, is Minister Naoshima, himself a former trade union official. So it's interesting that we've been able to have a lot of in common discussions in terms of approaches to these issues from - not so much philosophical, but positions of realism and, in terms of what's important in openness in trade.

Now the truth is that Japan, just like China, the sensitive issues still remains agriculture. But we've made it clear we can't have a quality FTA with Japan that doesn't address some of those sensitive issues. We're hoping in the negotiations that we can make progress. We'll have the opportunity next week to again raise these points with Minister Okada and we'll push it.

I think the dynamic interestingly enough, in North Asia if you look at it, where Korea is really keen to conclude an FTA. Japan, I think, understands the importance of that as well. These can be mutually reinforcing dynamics between China, Japan and Korea. So we've got a number of options as I said, we're not just backing one horse and whether it's called Doha and 2010, or otherwise, there's lot of other horses in the race that we're backing and it will be interesting to see who gets over the line first.

QUESTION: Thank you for your time Minister. My name is Vera Sprothen I'm a German foreign correspondent.

Speaking of perceptions, a couple of months ago you launched a new initiative which is very interesting, the Building Brand strategy. Iunderstand there's a current - there's currently an advertising agency working on a new slogan or a brand image for Australia.

Branding experts suggest that it's quite difficult to change a nation's brand image by merely coming up with a slogan. Now you'respending $20 million on that initiative for four years. Do you think that money's wisely spent?

SIMON CREAN: Well I'm - it's my intention to make sure it is wisely spent. I think this is a very important issue for Australia. I agree with you that if you haven't got the image you can't just spend money on an advertising campaign and hope to change it. None of the evidence supports that view.

Australia's in a different position. Australia, where people know of it, where people know Australia's expertise, have a very high regard for it. Now what they haven't got globally is a high regard for our innovation, yet we've got 11 Nobel Laureates.

They haven't got regard for the fact that Australia has been at the leading edge of so many discoveries, not been good at their application until we've tried to address that over recent years. Australia is also a great place to do business, not just to come for a holiday, and Australia punches above its weight in so many different ways. I mean take the funds management industry for example.

Australia is the fourth largest country with funds under management in the world, and if that's not important for wealth accretion we're not focusing. It is, because as countries like China for example and in Asia deal with their safety net issues and people actually - in countries that already save a lot they're going to want bigger returns on those savings. And so the ability to offer that service is an important way forward.

We're also world leading in terms of financial instruments such as public-private partnership, infrastructure build, securitisation for example. Now does the rest of the world know about it? Not as well as it should. It's also interesting that as the world comes out of the global financial crisis countries in Asia that are looking to expand their financial services to the extent to which they realise they need international investment are going to be looking much more kindly on a country that got through the global financial crisis without its banking system collapsing or having to be propped up than countries that did.

And so Australia is in the position where if financial services is important as the driver of investment, innovative products going forward we have a big story to tell. We don't have to invent it, we don't have to say we're good at financials, we have to reinforce that message. It's the same with education services. Why do people come here? Because, as I said in response to the - our friend from Saudi Arabia, because it provides a quality product.

Now what we've got to do is to reinforce that message. All of the evidence says to us and Simon Anholt who's supposed to be the global leader in terms of brand identification actually reinforces the point. Your problem isn't that you don't have to invent a reputation you've got a reputation, youneed to promote it better. That's what the exercise is about.

And what I would like the world to take is when they see something that says not I'm made in Australia but I am Australian, they know it's good, they know it's quality. And a pride in terms of putting that notion forward and reinforcing it on the evidence not because we merely assert it. That's the exercise in hand.

Now I know nothing about advertising and campaigning and all those sorts of things. I'm happy to leave that to the experts, but that's the mandate that we've given them, it's a clear direction from Government. I'll be very interested to see what the product is that emerges.

QUESTION: Okay. My name is George Yan, Phoenix TV, Hong Kong Broadcaster. And the question is, Minister in the core mining negotiating start while there's a [indistinct] into sort of made an announcement it will be going to 40 per cent up, raise the price, and I'd like your comment on that. And the second question is while you welcome, Australia welcomes Chinese company to invest here, but the thing is that a lot of China, the largest company, the very worthy companies are owned by Government enterprises, so how do you make sense of that? Thank you.

SIMON CREAN: Okay well just on the question of price, your question should be directed to the markets because we'll leave it for the markets to determine what the price is, the Government is not going to interfere in terms of market negotiations, and for countries like China that have sought recognition as a market economy, which wewere prepared to give, well I say to them in return, act like one.

So we won't be interfering in terms of market negotiations. I think we're in the fortunate position given the demand, not just in China but in Asia generally. You look at all the infrastructure, you look at the stimulus packages, they've predominantly been around infrastructure. That's why the demand for resources, iron ore, coal is so high. And where do people turn to first when they're short? They turn to Australia.

My only urging to them is they should think long term. Australia is a reliable supplier over the long term. Japan has understood that for many decades. Interestingly last year China, Korea and India all entered long-term contracts for gas. And so I hope that trend develops.

As for the investment side of it I said before investment is a two way street. We don't fear investment from China or any other country, we welcome it. But like every other country it will be subject to foreign investment review board consideration to see whether the national interest is met.

The question of SOEs sovereign wealth funds in the broader sense is a matter to be taken account of in consideration. It's not a barrier to the investment, but it's a matter to be taken into account.

And I think that we've opened - we've demonstrated a very open environment in attractiveness for investment. It's now under the portfolio. I welcome that because I think that, I said before, investment is the new form of trade, and the truth is that Australia's growth and prosperity has fundamentally been built around foreign investment.

Fortunately because of a brilliant and far-sighted policy that was entered into in '85 with the superannuation funds we have demonstrated an ability to grow in a significant way domestic sources of savings. So I think that Australia is in the interesting position going forward particularly given global demand for our resource base where there'll be a lot of competing interest for interest, not just by private companies or public companies and private companies from overseas but by the sovereign wealth funds as well as the superannuation funds.

CONVENOR: Thank you very much, Minister. Unfortunately that's it for today. I think we all agree that it was an extremely interesting, not only speech but also the Q and A session was extremely eye opening. And I would like you to help me thank the minister for coming here and hope that we can have you here again soon.
Thank you, Minister.

SIMON CREAN: You've got to sing to me next time.

CONVENOR: I think that won't happen.

ENDS

Media inquiries

• Trade Minister's Office: (02) 6277 7420
• Departmental Media Liaison: (02) 6261 1555