ACBC Chairman Duncan Calder reflects on the Australia Week in China festivities.
 

 

In April, as I arrived at Perth Airport, bleary eyed and half asleep at 4.30 am to join Prime Minister Abbott’s select CEO Delegation to China, I found myself queuing behind 125 noisy and excited school children.

Frustration turned to delight when I realised they were all going to China.

Some were part of Shenton College’s Beijing Music Tour culminating in a performance of Waltzing Matilda on the Great Wall! Others were from La Salle College travelling on a school education programme.

*Pictured left: Students from Shenton College in Western Australia sing Waltzing Matilda on the Great Wall of China. (Courtesy Shenton College)

Bilateral trade and investment flourishes strongest when built on the bedrock of a deep, rich and diverse bilateral relationship that includes strong cultural links built upon friendships.

The innovative New Colombo Plan established by the Minister of Foreign Affairs Julie Bishop will take so many of our university students into Asia. The outlook is very rosy for more people to people exchanges.

It was refreshing to see participants from the arts, film and ballet communities in the Prime Minister’s CEO delegation. The Sydney Symphony Orchestra performed the traditional Chinese piece “Galloping Horses” at the Prime Minister’s Gala lunch of some 1,800 business and political leaders at the Expo Centre in Shanghai. It is very positive to see our Government embracing such a broad relationship with our most critical economic partner.

*Pictured right: Australian Prime Minister Tony Abbott, left, poses with Chinese President Xi Jinping for photographers before a meeting at the Great Hall of the People in Beijing, on April 11, 2014. (AP Photo/Parker Song, Pool)

During his visit Mr Abbott delivered a clear message to the top Chinese leaders that Australia is “Open for Business”, a phrase that was emblazoned on the enormous backdrop behind the PM as he delivered his key note address.

The seniority of the delegation accompanying the Prime Minister, including six Premiers and the Chief Minister of the ACT was a political first.

Business leaders including Kerry Stokes, Andrew Forrest, James Packer, Andrew Harding, Mike Smith, Gail Kelly and Ian Narev, representing over half the total value of the Australian Stock Exchange were in China to support the Prime Minister and Australia’s ambitions with China.

This was the biggest combined delegation ever to accompany a Prime Minister overseas. The sheer size of the delegation accompanying Trade Minister Andrew Robb to China at the same time as the Prime Minister’s delegation strongly reinforced this “Open For Business” message.

And the message was welcomed by Chinese leaders who appear increasingly committed to the promotion of trade liberalisation and investment facilitation.

Li Keqiang, Premier of the People’s Republic of China, at the opening plenary of the Bo’ao Forum for Asia attended by Prime Minister Abbott on this trip noted: “When everybody puts firewood in the fire, the flames rise high.”

Without question, a free trade agreement with China will be a great boost for Australia. Financial modelling carried out by the ACBC in the past has shown these benefits are very significant.

An FTA can deliver improved access for Australian businesses to invest in China as well as greater access for Australians to China’s agricultural markets and to legal, architectural, finance, health, environmental and water management services.

It is exciting that Premier Li Keqiang and Prime Minister Abbott have both committed publicly to a swift conclusion to the FTA.

Premier Li has emerged as a strong proponent of a major economic reform agenda pushing for reform and openness. Mr Abbott has noted that completing the trade deals with Korea and Japan means that we can “redouble [our] efforts and focus single-mindedly” on the China FTA.

The issue of Chinese investment into Australia is one key aspect of the FTA negotiations. This has long been a valid concern of China, particularly the level of scrutiny applied to state-owned enterprises making even modest investments.

I was greatly encouraged by the positive signals emerging from the Government during the visit regarding the adjustment of FIRB rules for Foreign Government Investors that have shown a proven commitment to Australia.

Speaking in Shanghai the Prime Minister said: “We now appreciate that most Chinese state-owned enterprises have a highly commercial culture.”

The business community has long waited for a leader with the insight and courage to appreciate and communicate what we in the ACBC have known and have been saying for some time.

An adjustment of the rules is a practical and realistic approach that fairly rewards those leading Chinese companies whose capital investments and trade support have made such an enormous contribution to the growth of Australia’s energy, resources, agribusiness, education and tourism food sectors.

The ACBC is engaging with the Australian Government in relation to these issues. We will work with the Government to promote the key messages and opportunities for Australia that have emerged during this successful delegation.

As Ambassador Ma Zhaoxu told me at the conclusion of the final session in Beijing: “We are on the right track. We must all maintain that momentum for the benefit of both our peoples.”

The inaugural Australia Week in China was a great success. The organisation and coordination of the Australian Government’s team in China, led by Michael Clifton and his colleagues at the Australian Trade Commission and supported by Ambassador Frances Adamson and the Department of Foreign Affairs and Trade team at the Australian Embassy in Beijing was extremely impressive and delivered excellent results.

Business and politics have always gone hand in hand in China. Seldom, if ever, in the past has Australian business and politics collaborated to such success.

Government is doing its job.

The Prime Minister has made it unambiguously clear that Australia treasures our relationship with China. Mr Abbott and Minister Robb have injected momentum into the Free Trade Agreement negotiations such that a signing by the time of the G20 meetings in Brisbane in November is a genuine possibility and excellent progress has been made towards making Sydney an offshore RMB centre.

*Pictured left: Open For Business: Australian Prime Minister Tony Abbott delivers his keynote address in Beijing, April 2014 (Courtesy ACBC)

Now it is up to those of us in business to do our job.

China’s overseas foreign direct investment script is still being written. Australia made a strong start in the past, but has recently lost ground to competitor countries seeking Chinese investment dollars to boost the development of their respective nations.

A recent report by KPMG and The University of Sydney highlighted the United States as having overtaken Australia as the number one destination for outbound Chinese foreign direct investment.

Let’s all take advantage of Ambassador Ma’s message that the bilateral relationship is firmly on track and let’s reinstate Australia firmly in first place as China’s preferred destination for outbound direct investment.

The Australia China Business Council is fully committed to supporting our members to ensure that we capitalise on the enormous opportunities for Australian business from our close and growing relationship with the people of China.

Duncan Calder is the National President of the Australia China Business Council and was a member of the Prime Minister’s select CEO delegation to China in April. ■

To learn more about the Australia China Business Council, visit: www.acbc.com.au

*Pictured top left: Duncan Calder, National President of the Australia China Business Council with Li Cunxin, author of Mao’s Last Dancer during the April priministerial delegation to China. (ACBC)