05/04/2013 - 15:24

Business leaders call for deeper China engagement

05/04/2013 - 15:24

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Sundance Resources and Gindalbie Metals chairman George Jones

Australia will continue to benefit from China’s economic growth but governments should strive to forge deeper and friendlier ties with the emerging super-power, business leaders argue.

With WA accounting for almost a third of Chinese investment into Australia over the past five years, panellists at a University of Western Australia Business School forum suggested China’s ongoing urbanisation will continue to fuel demand for the state’s resources.

Mining veteran George Jones said China’s capacity to manage and sustain growth should not be underestimated.

“I’ve been a bull on China for a long, long time,” he said.

“As time goes on, people forget that the economic transformation in China is unprecedented. There is no economic event in the world’s history that matches what’s happening in China.

“The only thing that went close is the industrialisation and development of America after the Civil War and that still doesn’t get close to what’s happening in China now.”

However Mr Jones, chairman of Sundance Resources and Gindalbie Metals, said rhetoric from the federal government on China had been unhelpful in building relationships in the region.

“We’ve had the prime minister before last saying to the world that China was our major military threat, and our current prime minister saying there’s something suspicious about state owned enterprises and we’ve got to take a lot more care with their investment,” he said.

“That stuff has got to change.”

His views were echoed by ANZ WA chairman John Atkins, who said the government's Australia in the Asian Century white paper was an example of the strategic focus of engagement with China.

“The discussion far too often, I think, when we talk about China is about what China’s going to do and what we’re going to sell them,” he said.

“It’s a very, very narrow focus and I think the culture issue is a part of what needs to happen towards greater understanding.

“What’s lacking is an overall understanding and commitment to a relationship with China to develop a mutually acceptable way of interacting. We’re far too tactical in the way we deal with China.”  

Mr Atkins said despite a slowdown in demand for Chinese exports from Europe and Japan, China had been gradually diversifying its economy since the global financial crisis and still had a long way to go in its urbanisation process.

“Our view is that while there are some problems with external economies, the internal drivers of the Chinese economy are still there,” Mr Atkins said.

“There are some potential short-term issues that need to be dealt with but we see a fairly consistent growth pattern for the Chinese economy over the next 20 years.”

Prime Minister Julia Gillard will arrive in China tonight for a six-day visit, where she will meet newly-elected President Xi Jinping and other senior dignitaries.

Ms Gillard told guests at a Foreign Correspondent Association lunch in Sydney this week she intended to use the visit to build a relationship of “greater depth and durability” between the two nations.

“The timing of this visit so soon after the new leadership has entered into office is deliberate and reflects the importance of our rapidly evolving relationship with China and our high-level political oversight of that relationship,” she said.

“And more broadly, it reflects the centrality of Asia in the story of our nation for the 21st century.”

Ms Gillard will be accompanied on the visit by a delegation of senior ministers, including foreign minister Bob Carr and trade minister Craig Emerson.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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