（4 May 2012, Melbourne）
Ladies and Gentlemen,
It is my great pleasure to attend this lunch hosted by Bespoke Approach.
I am delighted to meet my old and new friends.
As a career diplomat, it is part of my life to follow daily news.
I have noticed the recent media interest on slower growth rate of the Chinese economy and a fear that a hard landing in China will have severe impact on the Australian economy. My view is:
First, China’s economy will maintain strong growth.
Affected by weaker external demand, China’s first quarter GDP growth moderated to 8.1%, but still higher than the 7.5% target.
China is still the front runner in global recovery.
The latest IMF report sees no hard landing in China, and estimates 8.2% growth for 2012 and 8.8% next year.
Second, China’s economic slowdown is the result of proactive macro economic control.
In China’s 12th Five-Year Plan, the annual GDP growth speed was set at 7%.
By lowering this year’s growth target from 8% to 7.5%, we want to make it fit the requirement set out in the 12th Five-Year Plan.
The aim is to shift China’s growth towards one that relies on development of new technologies and higher skills of the labor force, better adjust economic structure and give priority to quality instead of speed of development.
Third, China’s economy has structural drivers for long term and stable growth.
The next five to ten years will see sustained, steady and relatively fast growth in China driven by three engines: huge demand for investment released by on-going urbanization and industrialization; enormous consumption from hundreds of millions of rising middle class in China, and higher productivity as a result of the upgrading of industrial chain.
In a word, balanced growth is the core concept of China’s proactive and moderate slowdown.
Is this a new opportunity for mutually beneficial cooperation between China and Australia? The answer is yes.
First, areas of cooperation are broadened.
China recently signed with Australia the currency swap agreement worth 200 billion yuan (30 billion dollars), and the MOU on enhancing infrastructure cooperation.
Holden joins hands with Shanghai General Motors and the Pan Asia Technical Automotive Centre.
Australian car makers will access the Chinese market, opening a new chapter in cooperation between the automotive industries of our two countries.
Second, new forms of cooperation emerge.
Monash University, a prestigious university from Victoria, has established with China’s Southeast University an international graduate school in Suzhou, setting a new model of joint educational project between China and Australia.
China’s GCL Projects and Australia’s LINC Energy have teamed up to build plants that will turn gas extracted deep underground from coal into diesel.
It is a good attempt to explore new ways of Australia’s new technology being commercialized in Chinese market.
Third, there are greater potential for cooperation.
China is Australia’s largest source of international tourists by value.
Last year, 540,000 Chinese tourists spent 3.6 billion dollars in Australia.
The number of Chinese tourists will exceed 600,000 this year.
Tourism Australia expects 30 direct flights routes between China and Australia by 2020.
“Black commodities” like energy and mineral products continue to be shipped to China, and higher living standard of the Chinese people is offering enormous market space for “white commodities” such as Australia’s quality dairy, meat, wool, wines and higher education.
As Shakespeare wrote in his play the Winter’s Tale: “What you do still betters what is done”.
Trade volume between China and Australia increased by 1,000 times over 40 years.
There is more than that.
Apart from commerce, our people-to-people, cultural, educational and scientific and technological exchanges have also grown fast.
But we cannot stop at that.
Our relations need a balanced and solid foundation, which is a long term and strategic vision, political, economic and security mutual trust and respect for each other’s core concerns.
We aim for a comprehensive and cooperative relationship built on long term and stable trade and investment and ever expanding political, people-to-people, cultural, educational and research exchanges.
China’s development is like a stable and safe high speed train, which we have no reason to miss.
There are people who want China to slow down, destabilize and change, and want China and Australia to be at odds.
The past 40 years have disappointed them and so will the next 40 years.
My friends present today, I hope you and your friends will make efforts and appeal for the happiness of our children, for the comprehensive and stable cooperation between China and Australia, for the common prosperity of our two countries.
As China’s first astronaut said, if political leaders can have a look at our beautiful planet from the space, the world will be more peaceful. Thank you.
