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MEDIA RELEASE - John Brumby's Speech at Canberra Networking Day - 19 June 2018

19 June 2018

The Hon. John Brumby AO, National President, Australia China Business Council (ACBC)

Speech at Canberra Networking Day 2018

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On behalf of the Australia China Business Council, welcome to Canberra Networking Day.  May I particularly acknowledge our distinguished guests who will be joining us through the day:

  • The Prime Minister
  • The Chinese Ambassador
  • The Minister for Foreign Affairs
  • The Minister for Trade, Tourism and Investment
  • The Shadow Treasurer
  • The Shadow Minister for Foreign Affairs, and
  • The Shadow Minister for Trade and Investment

We appreciate this is an extremely busy time in parliament, and your efforts in being here highlight the real importance you place on the Australia-China relationship.  So thank you again.

This event really sums up what the Australia China Business Council is all about: we talk to business; we talk to government; we help business talk to government; and we help Australia talk to China.

And there’s never been a more important time to be talking than now.

For most of the years I have been involved with the
Australia China Business Council, I’ve seen an Australia-China relationship which has been in great shape – strong business links, strong people-to-people links and a strong and mutually respectful relationship at government level.

Last year, the business and people relationship remained strong and positive, but we saw the early signs of some fraying at the edges of the government-to-government relationship.

This year, we meet in more challenging circumstances. While the trade and investment relationship remains robust, the deterioration in the government-to-government relationship has the potential to undermine our business opportunities and future success.

At the ACBC, our core business is business – we work to increase the trade and investment relationship with China, to the benefit of business and, of course, the broader Australian community. We leave politics to our elected politicians. But I would be doing a disservice to our members and the feedback they have provided over recent weeks and months if I didn’t call out the current challenges to the relationship.

To put it bluntly, the relationship needs reset and repair – to return to a position of mutual trust, respect and friendship – to the long-term benefit of both Australia and China.

And to be clear, this doesn’t mean compromising Australia’s values or interests. The choice is not about whether to protect our national interest or engage more closely with China. Rather, it is about how to protect our national interest, which includes a positive relationship with China.

One of the things I have learnt over the past 20 years or so observing the development of the Australia-China relationship is that many commentators and analysts all too often underestimate the growth and sheer dynamism of the Chinese economy – as well as the huge benefits of this to the Australian economy and our living standards.

Since the global financial crisis, China has accounted for almost 40% of all global GDP growth. Looking forward, the Reserve Bank Governor Philip Lowe recently pointed out a simple piece of arithmetic: China has four times the population of the US. That means, when Chinese per capita income reaches just half of that of the US, their economy will be twice as big.

At the ACBC, we look at the $183 billion of two-way trade between our countries as a great achievement. Our trade with China has significantly lifted Australian household incomes and living standards and helped build some great Australian companies. But we also believe that if the Australia-China relationship can be reset on strong and positive terms, there are further gains to be had for both our countries in the years and decades ahead. As China enters a new economic cycle, we see $183 billion as just the beginning – as the foundation for even more growth.

So just how significant are these opportunities? When President Xi Jinping made his keynote address to the APEC CEO Summit last November, he provided a compelling picture of the extraordinary trade and investment opportunities China will generate over the next 15 years: ‘... it is estimated that China will import US$24 billion worth of goods, attract US$2 trillion inbound investment and make US$2 trillion of outbound investment ...’.

These numbers are backed by other analysts ... McKinsey’s, who advise that China now has a massive 42% of global e-commerce, and Boston Consulting, who predict that by just 2020, more than 100

million Chinese households will have annual incomes in excess of $A60,000.

These factors help explain why on Singles’ Day last year, Alibaba did more than $US25 billion of business. The combined total for US Black Friday and Cyber Monday was under $US8 billion.

So there are extraordinary opportunities for Australian exporters as well as service providers ... but we will need the relationship on a strong and positive footing if we are to maximise this potential.

For our part, ACBC intends to take a leadership position in maintaining and building the Australia China relationship. Over the next 6-9 months we will push forward with a range of initiatives to support and build the relationship.

  • In July in Darwin, we are hosting a large two-day conference on the Belt and Road Initiative. We see BRI as a driver of growth in our region, generating new opportunities for Australian businesses as well as lifting the lifting standards of less well developed economies. It’s worth noting the area covered by BRI encompasses a population of 4.4 billion people, or 62.55% of the world’s population, and represents almost 30% of global GDP.
  • Second, ACBC will be actively supporting and participating in the China International Import Expo in Shanghai in November. We are delighted that Minister Ciobo has committed to supporting and attending the CIIE and we will be working with him as well as Federal and State agencies to generate new business opportunities for our members.
  • Third, ACBC in partnership with AustCham will again be actively supporting the AFL and the relevant AFL clubs for next year’s Shanghai game. We will be building business events around the game and hope that next year a Women’s AFL game might also be played. We are firm believers in the power of sports diplomacy.
  • Fourth, over the next year through our ACBC State Branches, we will be organising around 100 seminars, events and functions to promote trade and investment, covering topics as diverse as health and aged care through to dairy and horticulture. We will also be supporting numerous outbound and inbound China trade and investment missions.


And finally, last year ACBC organised and hosted the Australia-China Economic and Trade Co-operation Forum at which
Premier Li Keqiang and Prime Minister Malcolm Turnbull spoke. We would welcome the opportunity to work with Government and host such a forum again in 2019.

 

To conclude.

This year we celebrate the 40th anniversary of China’s ‘opening up’ to the world.

As Bill Gates recently put it:  ‘No other country has accomplished what China has achieved in the last few decades—breaking the relentless cycle of poverty and disease for hundreds of millions of people while modernising its economy at a scale and speed unprecedented in human history.’

But it’s also worth noting that last year we celebrated the 45th anniversary of Australia-China diplomatic relations.

That means Australia has been engaged with China at every step of their growth journey.  (And so, by the way, has the Australia China Business Council.)

At ACBC we believe this journey has only just begun, and that Australia and China have much to gain from a strong and positive partnership into the future.

That’s why Canberra Networking Day is so important.

It’s why it’s wonderful to see so many businesses and individuals here to support the Australia-China relationship.

And it’s why we look forward to working with you all to help generate new friendships and opportunities in the years ahead.