ABC 24

  • Transcript, E&OE
Subjects: Australia Week in China (AWIC), China-Australia Free Trade Agreement (ChAFTA).
13 April 2016

MATTHEW CARNEY: Minister, first up just tell us what the aims and objectives at the start of this week and at the end of it, what do you hope to achieve? Coming to the end and what are your objectives?

STEVEN CIOBO: Australia Week in China is an exciting prospect frankly. We've got more than 1,000 delegates that have taken the time to invest their own money to travel to China. I think it really underscores the level of aspiration from the Australian business community, to look at what the market opportunities are in China. The great thing about this Australia Week in China is that out of those 1,000 delegates that are coming, there's a large number of them that are small to medium sized enterprises. The old cliché about the engine room of the Australian economy. It just highlights that it's not just about big corporates. The change under the China Australia Free Trade Agreement, the opportunity to engage with China, is spreading now through the Australian economy. That's frankly great news for Australia because we know that as we generate more export sales into China, as we generate more investment into China, that will drives jobs and growth back in Australia. At the conclusion of this Australia week in China, I'd anticipate hearing, I hope, about some great deals that have been done; about the development of some key relationships in terms of the people to people links and the business to business links, because ultimately that's got to be the benchmark of success. By building those relationships, by growing Australian exports to China, by growing Australian investment in China, that will underscore our economic growth, in the Australian context, for many years to come.

MATTHEW CARNEY: A key part of this week of course is really capitalising on the transition from this economy, second biggest economy in the world from manufacturing exports to consumers. How are we placed to fully capitalise on that do you think?

STEVEN CIOBO: I think Australia's really well placed. If you look at the operation of the China Australia free trade agreement, I guess there's really two parts to it. One is the very important work that Andrew Robb, my predecessor did, around the negotiation and implementation of the China Australia Free Trade Agreement. He was able together with a great team of negotiators, to deliver upon preferential market access that puts Australia in a really strong position with respect to other competitor countries that we compete in a global market place against. The second aspect now is the critical aspect of actually building the momentum to actually capitalise on the market opportunity that that preferential access has delivered to Aussie businesses. In that respect, as we continue to see the Chinese economy diversify from being a production based economic model, to one around consumption, does create tremendous opportunities for Australian businesses. We've seen some examples like, just to name one Bellamy's the infant formula group, which are just having record sales into China. So much so that they can't even come close to meeting the demand for their product. I think what we'll continue to see is businesses that just get what that opportunity is in the Chinese market, service that opportunity. I'm excited particularly about what it represents in terms of services trade. Goods trade is a big part of what we're doing in the lower tariffs we've achieved under the China Australia Free Trade Agreement is a big step. But it's also the opportunities to invest in China through services trade that's exciting as well.

MATTHEW CARNEY: There's also of course, you know everyone talks the slowdown and there's varying interpretations to that, which you just mentioned in the presser - in terms of volumes you can't compete. Nevertheless when you drill it down, you look at export sales - January, February, they're done quite substantially, so how can you be so sure that this can really deliver for us in terms of the context of the slowdown?

STEVEN CIOBO: The decision for government is a pretty basic one and that is in light of global economic tumult, in light of a lot of economic headwinds, do we recede from the world or do we open up and engage with the world. That's fundamentally the policy question that governments have got to make. The Coalition has taken the decision that what we want to do is engage with the world. We don't want to put up trade walls. We don't want to put up barriers that say "No, we're turning our back on the rest of the globe". What we want to do is grow Australian exports, grow Australian opportunities for investment and if we do that successfully, we know that we'll drive jobs and growth in the Australian economy. Now people say "Well hang on, we're seeing patches of retreat with respect to trade value" - not necessarily trade volumes - but with respect to trade value. You know what, we've seen the commodities spot price for example go up, we've seen it come down, we'll see different market segments move in different directions. Ultimately though, if you put in place a pro-trade framework, what the last 50 years of history teaches us, is that a pro-trade framework boosts national wealth, makes your economy be stronger, creates opportunities to drive employment. We've created jobs in Australia at three times the rate under the Coalition, than took place under the previous government. The reason in part that that has happened is because we're opening ourselves up to the world.

MATTHEW CARNEY: Just lastly, every market has its own unique challenges and of course China does too. What do you see as the biggest challenges here for those small, medium term businesses, to really actually sustain and penetrate this market and of course as you said, take advantage of it. What are the key challenges to it?

STEVEN CIOBO: One of the things I guess anecdotally that I hear, find most interesting, is you travel around China and people will say "We want to do business with Australia but we're not really sure where to start". You move around Australia and people say "We know that there's tremendous opportunity in China, but we don't really know where to start. How do you sort the tire kickers out from those that are genuine?" I think one of the biggest challenges that Aussie businesses face is knowing where to plug into China. The sheer enormity of China at 1.3 billion, the fact that you've got cities with populations that are equal to the entire size of Australia, I think can often be daunting. That's precisely why Australia Week in China works so well because it actually starts to break down the sheer scale of China into, for lack of a better term, a bite sized piece. An Aussie business can come along to Australia Week in China, participate in one of the investment streams, one of the business streams, meet people that are relevant to them that are based in China, get expert knowledge and advice about how to tackle that investment into China or that export opportunity into China. By doing that we know that ultimately that will help to drive sales. We've got some big corporates that are here that are looking at doing big deals, but we've also got smaller businesses. I met a business, an exporter of seafood from Queensland, from Brisbane, who just spoke about having been to a couple of trade events in China, securing a $65 million contract over the next couple of years. This is precisely what we want to do. Create opportunities for these small to medium sized businesses, as well as the big corporates, because that's ultimately going to be great for our country.

MATTHEW CARNEY: Good. Thank you very much for your time.


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