ABC 774, Melbourne

  • Transcript, E&OE
Subjects: Prime Minister Malcolm Turnbull’s visit to China, Australia Week in China (AWIC), South China Sea, China’s transitioning economy.
14 April 2016

SALLY WARHAFT: On the line is the Minister for Trade and Investment, Steve Ciobo. He's in Shanghai right now. Good morning, Minister.

STEVEN CIOBO: Good morning, Sally.

SALLY WARHAFT: Our economic relationship with China is really complex and really fluid. What does the Prime Minister want from China for Australia's economy?

STEVEN CIOBO: The Prime Minister's coming this week as part of Australia Week in China. We've got more than 1,000 delegates that have travelled from Australia, paying their own money to come up to China because they want to explore the opportunities for trade and investment in China. It's a terrific, outstanding success of the way in which we're engaging with the world's biggest market, 1.3 billion and obviously the reason why we have 1,000 delegates is because people recognise the scope of opportunity in China. The Prime Minister is coming for Australia Week in China and he's also here for meetings with the Premier and the President of China.

SALLY WARHAFT: What does he want from this visit?

STEVEN CIOBO: Well, I think this visit is underscoring the reason why we continue to engage with China, recognition that they're our most important trading partner, with two way trade worth around $150 to $160 billion. It's a chance to talk about issues that affect both countries, of course, as well as the region.

SALLY WARHAFT: Well, let's get into some of those issues. I suppose the most pressing one from Australia's point of view is the move away from a commodities economy, from the mining economy and so on. We are a tiny nation next to China. They are so big and we do a terrible job of adding value to the fruits of our quarries. What is the Prime Minister hoping to do about that?

STEVEN CIOBO: Well, I'm not, I've got to be honest with you, Sally, I'm not as negative about our value adders as you are. I mean, there's many examples of where Australia is at the cutting edge. We've got goods trade. We've also got services trade. If you look at opportunities that have been opened up under the China-Australia Free Trade Agreement, we've got Australian businesses expanding into China now and importantly, many of those on the services side. I mean, for example, yesterday, I had the opportunity to open up for Goodman, the logistics company, their 41st business here in China. They've got investment now of around $7.5 billion in China. The logistics business is a good value-add business, so sometimes the ways in which Australia is scoring runs isn't necessarily recognised, but that notwithstanding they're still here. Likewise, you've got a strong focus on innovation on this trip. There's many businesses that are here from the health and aged care sector. We've got businesses here from financial services, as well as the more traditional businesses around agribusiness and premium food and wine.

SALLY WARHAFT: Minister, I understand that there's lots of good things to talk about and it's obviously, particularly part of this week in China, it's your job to talk them up, but we are in a fluid situation in terms of the economic relationship between these countries, our country and China, but also China itself. That its economy is slowing. That there are real changes that are going to be taking place and I don't think it's enough of a response just to say things are better than you put them.

STEVEN CIOBO: Well, I mean, yes the Chinese economy is changing and so is the Australian economy. I mean, we're going to see China continue to change from being an investment-led economy to being a consumption-led economy. Likewise in Australia, we're seeing our economy transition from being led by the resources and energy sector into a more innovative economy. Therein, in that change, lies the opportunity. I mean, that is precisely why we have the largest delegation from Australia to ever travel abroad and come to China. I mean, what I'm trying to say, Sally, is there's a reason why a 1,000 plus delegates invest their own money in a trade delegation. That's because they're genuinely excited about the opportunities that present themselves. You know, I'm just not fearful of a transitioning China economy and I don't think people should be, because therein is actually the opportunity. As the Chinese economy continues to develop, there'll be more demand than ever for Aussie knowhow, for access to high quality services around wealth management, around financial services more generally. Of course, as its population ages, like the Australian population, there'll be more demand for Australian intellectual property and knowhow around how you design, build aged care facilities and health services more generally and that's what people are picking up on.

SALLY WARHAFT: There are strategic challenges as well for the Prime Minister and his delegation this visit, especially around the South China Sea and Australia's alliance with the United States. Malcolm Turnbull said he will not be shifting in his views against Chinese expansion. How much of a tension is this?

STEVEN CIOBO: Well, this is obviously an area of disputed claim between China, Vietnam, the Philippines and others. Australia has indicated that from our perspective, this is an area where we should continue to see the maintenance of the United Nations Convention on the Law of the Sea. We should continue to see over-fly rights and we should continue to see freedom of navigation. Clearly, this has the potential to be an area of conflict, but that notwithstanding there's got to be I think a strong focus on maintaining regional peace and stability. Australia's trying to play its role with doing that. We've made our position clear in relation to the United Nations Convention on the Law of the Sea and to those over-fly rights, for example. I think we'll continue to stand by that strong position.

SALLY WARHAFT: It's a very different culture, obviously in China, in Mandarin, the character for crisis is a mixture of danger and opportunity. Chinese politics, it's viewed very differently to our politics. What's it like for you to be there on a personal level as the Minister for Trade, encountering these cultural differences?

STEVEN CIOBO: Look, it's genuinely quite exciting. I mean, I've had the opportunity to travel to China many times now. Each time I come, it's clear that, yes there are a large number of differences in terms of cultural values and in terms of the approach to matters involving politics or business. But that notwithstanding, there are as I'm sure you'd appreciate, so would anyone who travels, you realise how many things there are that are all so similar. Ultimately Australia needs to look at the opportunities that a developing economy like China presents. When you have a country of some 1.3 billion people, that are going through the transition of becoming wealthier, that are going through the transition of having an economy continue to develop, especially in major centres like Shanghai or Guangzhou and others, that is the real opportunity for Australia to be part of that story and for precisely the reasons that you outline, given we are a small economy of 23 million, we certainly do have scope to hitch our wagon, to some extent, to the continued growth that's taking place in China.

SALLY WARHAFT: Well, it's going to be a very big couple of days. Shanghai today and Beijing tomorrow for banquets galore with the Chinese Premier and we look forward to seeing, well what this will bring for the relationship. We appreciate your time this morning.

STEVEN CIOBO: Terrific, thank you very much. Have a great day.

SALLY WARHAFT: You too. Steve Ciobo is the Minister for Trade and Investment.

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