On the evening of March 17th, 2009, H.E. Mr. Zhang Junsai, the Chinese Ambassador to Australia, hosted a reception at the Chinese Embassy for the delegates of Australia China Business Council at their Annual Meeting in Canberra, and delivered a speech entitled China and China-Australia Economic Cooperation in the Global Financial Crisis. He made his statements on how China would challenge the world’s financial crisis and on the hot topics by the Australian business circles such as how China and Australia should co-operate and find new solutions to jointly stave off the crisis.
Among over 80 attendants at the reception, most of them were members of National Secretariat, branch Presidents and other delegates of ACBC, some from DFAT or other departments of the Federal and State government, and a few from Chinese enterprises in Australia.
Ambassador Zhang indicated that China, like Australia, has felt the adverse impact of the global financial crisis. However, what China encounters is a difficulty in the process of development. The fundamentals of China’s economic development remain unchanged. Conditions that favor sustained and fast growth are still there. China also enjoys political and social stability. In particular, we have located in the reform and opening up process the lines and policies that suit China’s reality and are supported by the people. Accelerated industrialization and urbanization in China has brought with it huge potential for growth. China is a massive market. A dollar spent by every Chinese amounts to an enormous figure.
During the Second Session of the 11th National People’s Congress, which concluded recently, Premier Wen Jiabao set a target of 8% GDP growth for this year in his Report on the Work of the Government. The Session sent out an important message that the Chinese Government is capable of overcoming the crisis. It has bolstered the confidence of the Chinese people to tide over the difficulty. As Premier Wen put it confidence is more precious than gold.
To sustain growth, the Chinese Government has adopted a series of forceful and timely measures, such as cuts in reserve deposit ratio, interest rates and taxes for enterprises. China also plans to invest 4 trillion RMB, or A$900 billion dollars, from the fourth quarter of last year to 2010, in public welfare projects, infrastructure building, environmental development and post disaster reconstruction. More importantly, China is prepared to fight a protracted war. We have formulated plans to respond to worse situation, and have stocked enough ammunition for new stimulus package when necessary. We therefore have full confidence and the capability to overcome various difficulties and ensure sound and steady growth in a longer period.
If China can well manage its own business, it is good news for the rest of the world. Sustained and steady growth in China will reinforce global confidence in growth and increase China’s import and outbound investment, thus creating more development opportunities and employment for Australia and the rest of the world.
Ambassador Zhang said that China and Australia should stand together, seize the opportunity, meet the challenge and jointly stave off the international financial crisis. He proposed that two countries observe the following three principles and two areas to tap the full potential of our business relationship.
The first principle is mutual benefit and win-win cooperation. The Chinese always stand for mutual benefit and win-win cooperation as this is the only way to secure a long-term cooperative relationship. China adopts an open attitude towards Australian investment and has taken various measures to protect Australian companies’ interests in China. We hope that Australia will treat Chinese companies in a fair and just way and facilitate their investment here. A relationship solely built on trade and without mutual investment is not a sound and stable economic relationship. It is against the win-win principle.
The second principle is mutual understanding and mutual accommodation. The bilateral FTA negotiation has been going on for 13 rounds since its launch in 2005. We both have our respective concerns in this negotiation, but sticking to positions will not sort out the problem. The way out is for both sides to make concessions to accommodate each other’s concerns. I am convinced that the two governments have the wisdom to expand common understanding, bridge differences and reach an early agreement.
The third principle is to bear in mind the larger picture. Economy and trade are important part of the overall China-Australia relations. They complement each other with political, security and people-to-people exchanges. A sound bilateral relationship and deeper understanding between the two peoples are conducive to lasting and healthy economic cooperation and trade. “It is my hope that China hands and Australia hands or both will serve as a bridge between the two countries and contribute to the growth of friendship between our two peoples and the comprehensive cooperation between China and Australia.”
Based on these three principles, China and Australia can then work together and cooperate in the following two areas.
First, in the multilateral area, China and Australia can strengthen coordination for the establishment of a fair and reasonable international financial and economic order. The G20 Summit will soon be held in London. China and Australia should further coordinate their positions and push the meeting to achieve tangible results in stimulating global economic growth and reforming the international financial and economic system.
Second, in the bilateral area, we need to step up our trade and mutual investment. Recently we have seen several intended investments by Chinese companies in Australia, such as the strategic cooperation between Chinalco and Rio Tinto, Minmetal’s takeover bid of OZ Minerals, and Hualing Group’s Acquisition of FMG stakes. These three investments will bring mutual benefits. For Australia, they will not only solve the companies’ capital shortage, but also facilitate their development in the Chinese market to promote Australia’s economic growth. For Chinese companies, they will draw on their Australian partners’ advanced managerial expertise and access stable and reliable supply of resources.
Regarding some skeptical about Chinese investment, Ambassador Zhang clarified that these three SOEs follow market rules and are accountable to shareholders. Some of them are already publicly listed companies. The government does not interfere in their operation. Chinalco and other Chinese SOEs’ investment in Australia are their independent decisions based on market demand and are aimed at companies’ further growth. The argument that Chinese SOEs are government controlled and intend to monopolize Australia’s energy and resource industry to exert influence on pricing is nonobjective. Such is not possible. Nor does China have the intention to do so.
Australian companies began to invest in China more than 20 years ago and have been moving ahead at a quick pace. By the end of 2008, China has approved investment by 8,954 Australian companies with a total volume of 5.82 billion US dollars. Last year, while 337 Australian-funded companies opened in China, only about 300 Chinese enterprises made direct investment here, with a paid-in volume of 3 billion US dollars. Frankly speaking, investment by Chinese companies here is small compared with some other countries. It is only 1% of the total foreign investment in Australia, which does not match China’s status as Australia’s largest trading partner.
At the reception, Mr. Frank Tudor, ACBC National Chairman also delivered a speech and expressed his confidence in China’s future development and his willingness to advance the economic and trade relations between China and Australia.