Work Together for Stronger China-Australia Business Ties
--Keynote Speech by H.E Ambassador Ma Zhaoxu at the Annual Dinner of the CAAA
March 30, 2014 Melbourne
Ladies and gentlemen,
It is my pleasure to attend the annual dinner of the CCCA. I would like to take this opportunity to share with you some of my thoughts on China-Australia relationship.
Before doing so, I want to pay tribute to the Chinese business community. While doing business every day, you are also strengthening China-Australia relations. I want to especially acknowledge the CCCA’s leadership. It is the premier body representing almost all the big Chinese companies investing in Australia. Under its leadership, the Chinese businessmen, together with their Australian partners, have made our economic cooperation a powerful and enduring bedrock of China-Australia Strategic Partnership. Without your efforts, it will be hard to imagine that our business cooperation could be as successful as it is now. I hope the chamber and its members could continue to make efforts for closer economic cooperation.
China-Australia relationship is growing important as highlighted by the expanding trade volume. China has been Australia’s largest two-way trading partner, export market, source of import and trade surplus for five years in a row. Our two-way trade stood at more than AU$140 billion in 2013 according to Australian statistics. Australia export to China exceeded AU$94.5 billion, running a trade surplus of over AU$ 47 billion. Trade with China has benefited Australia in both aggregate and average terms. More jobs and income are created. An ACBC report estimates that two-way trade with China has brought an additional income of AU$13400 to each Australia household every year.
Our investment cooperation also significantly strengthened our relationship. China’s non-financial investment in Australia exceeded AU$ 3.9 billion in 2013, covering a wide range of areas, mining, energy, agriculture, manufacturing, financial service, and information technology. It is predicted by the ANZ that China’s direct investment to Australia will increase by tenfold to AU$ 200 billion by the year of 2030. Just imagine how these investments will boost the development of Australian economy.
It is nothing short of remarkable achievements in our economic relationship. And it is our business people, especially all of you here, who are doing this great thing. As the pioneers of our economic relationship, you have accomplished greatly in boosting local economy and employment.
Let me share with you some living examples. A joint consortium held by China’s Shangdong Ruyi Group and Australia’s Lempriere Company invested AU$300 million for the acquisition of Cubbi Group in October, 2012, saving the bankrupt company and helping it turn losses into profits one year later. The Cubbi field is estimated to generate AUD 120 million worth of revenue every year and have contributed to local employment, infrastructure and community development.
Another example is China’s Yancoal Australia. The company only has 16 Chinese manager and engineers and hires more than 3000 local employees. And Huawei Australia has been committed to localization since its founding in 2004. 90% of the company’s employees are Australians.
I visited West Australia and the mining areas in Pilbara not long ago. I got the first-hand experience of how effective and mutually-beneficial the cooperation is between Chinese and Australian companies. The iron ore mining operations jointly invested by Sinosteel as well as Baosteel and Rio Tinto are extremely successful and have created numerous jobs for local community.
Yet the potential of China-Australia economic relationship is to fully materialize. New opportunities are emerging with great economic transformation taking place in both our countries. China’s ongoing industrialization and urbanization means a stable market for Australian exports while Australia’s infrastructure and agriculture development has attracted huge Chinese investment. We will have more promising cooperation in energy, resources, services and agriculture, providing us strong engines to upgrade our cooperation.
As Chinese market is promising, competition is quite intense for Chinese market and investment. We should not take it for granted that Chinese companies will choose to invest in Australia.
Indeed, we have the ANZ prediction of ten-fold increase of Chinese investment to Australia. We have also estimates showing that China’s total outbound investment is expected to reach US$500 billion in the upcoming five years. And Australia has long been an attractive destination for Chinese investment.
Attractive it is, perfect it isn’t. The Chinese businessmen here maybe in the best position to tell the difficulties in investing here, such as foreign investment review for Chinese state-owned enterprises, restrictions on the entry of Chinese workers, and so on so forth.
To address their concern, we need to look at Chinese businesses with an open mind and convince them that Australia is “open for business” and is making substantial efforts to facilitate Chinese investment. Chinese businesses should also make their own efforts to accommodate themselves to local situation.
It is also worth mentioning here that China and Australia are negotiating a comprehensive FTA. Premier Li Keqiang singled out FTA talks with Australia in the Chinese Government’s work report and confirmed that China will speed up FTA negotiation with Australia. Think about how the FTA will benefit us. Australian GDP will increase by AU$20 billion each year because of the trade pact. In agricultural business alone, the FTA will add AU$ 600 million to Australian export to China each year.
Bilateral economic ties have always been a driving force of the overall China-Australia relations. Our overall relations are also supported by strong people-to-people links, such as students and tourists exchanges. I hope the business community could support people-to-people exchanges even more actively. Fundamentally speaking, it is people who do the business. Stronger people-to-people links is only good to business.
The year 2014 will be a remarkable year in our relations. We will have an important agenda in our relations. Next month, Prime Minister Abbott will visit China, which will be highlighted by an unprecedentedly large tradedelegation and the first “Australian Week”. President Xi Jinping will attend the G20 Summit in Brisbane and visit Australia in November. These top-level exchanges are a strong guarantee for broader economic cooperation.
As a bridge linking the Chinese and Australian businesses, the CCCA have a greater role to play in this new context of our relationship.
I believe that the very best days of the relationship still lie ahead.