Tackling the big questions of Chinese investment into Australia
27 September 2012
Has Australia scared Chinese investors with mixed messages? To what extent can we rely on China to realise $230 billion in pipeline projects we will be unable to fund? Should Chinese companies be more transparent about goals and strategy to help ease anxiety about Australian deals? What can Australia do to meet Chinese investment goals to remain an attractive proposition against competing countries?
These and many other challenging questions on Chinese investment in Australia were hotly debated this week at NSW Parliament House as more than 150 academics, federal and state ministers, and Australian and Chinese business leaders met as part of the 2012 Sydney China Business Forum.
Presented by the University of Sydney's China Studies Centre, the forum is an annual event, which aims to open dialogue across Australia-China business relations by harnessing Sydney's geographical and cultural role as a gateway to NSW and Australia, and its role as a financial centre. It is hosted by the City of Sydney and supported by the NSW Government, KMPG, the Australia China Business Council and the Sydney Business Chamber.
The theme of this year's forum was 'Australia-China Partnerships in Energy Infrastructure'. Keynote speakers included Federal Minister for Resources and Energy Martin Ferguson, Federal Shadow Minister for Communications and Broadband Malcolm Turnbull, China Daily newspaper Deputy Editor-in-Chief Mr Qu Yingpu and Deputy Premier of NSW Andrew Stoner.
Launching the day's events, Professor Kerry Brown, Director of the China Studies Centre, said that Chinese investment and trade engagement was an inevitable part of the 21st century global economic landscape. "It's not whether you want to deal with this constructively and collaboratively, it's how you do so now. There is no reverse gear."
In his address NSW Premier Barry O'Farrell declared NSW a welcome and willing destination for Chinese investment and said the state was well-placed to build on its strong trade and investment partnership with China and to take advantage of increasingly diversified outbound Chinese investment.
Federal Resources and Energy Minister Martin Ferguson concurred saying Australia should not take Chinese investment for granted. Warning the commodities boom was over he said Australians would have to work harder to attract foreign investment and improve our productivity in light of downward pressure on commodity prices.
"The days of record high commodity prices are gone. The commodity price boom is over," Mr Ferguson said.
"We need to maintain Australia as an attractive destination for foreign investment. Capital is footloose and will go to the country that can offer a stable investment environment that is low risk, provides competitive production costs and stability of supply." Read Mr Ferguson's full speech.
In his keynote speech Shadow Minister for Communications and Broadband Malcolm Turnbull urged China to reflect on the state of its public diplomacy and corporate communications in Australia and more generally.
"I imagine there are many more excellent speakers of English in China than there are Australians. But why is it that we so rarely see a Chinese official or business leader explaining their policies or strategies in our media? A lot of the concerns about Chinese investment come about through the uncertainty which is a consequence of a lack of transparency. So much of the concern about Chinese investment - the political or public concerns, if you like - would be allayed if their representatives were more publicly transparent," Mr Turnbull said.
"And so I would strongly encourage - and I have made this remarks in Beijing at the International Department of the Communist Party and other places - that I think a more overt public explanation of China's strategy, its ambitions, its rationale would be enormously helpful. Enormously helpful for China and would help inform the debate." Read Mr Turnbull's full speech.
China Daily newspaper Deputy Editor-in-Chief Mr Qu Yingpu warned in his keynote address of a perception that Australians have been quite resistant to Chinese investment in many ways. He said alarmist political comments had been widely reported in China along with decisions such as to restrict telecommunications company Huawei from bidding for work on the national broadband network.
"Australia has a big job to do to communicate well with China and convince our investors and our people, the consumers there that Australia welcomes Chinese investment," Mr Yingpu said.
Panel discussions at the forum covered a perceived need to remove federal and state regulations overlap as a potential investment barrier; new areas of partnership and investment such as the creative arts, and film development; non-tariff barriers to investment; and to what extent Chinese companies should invest in social capital to establish a local presence and confidence.
Closing the conference University of Sydney Vice-Chancellor Michael Spence said the forum was illustrative of what was needed if the Australia-China relationship was to develop its full potential.
"That was what today was about - today was an event hosted by the University of Sydney with the cooperation and support of the state government of NSW and the City of Sydney and that is what we need if this relationship is really going to develop to its full potential - we need government, we need the academy, we need the city, and we also need business to work alongside us, making the most of the opportunities that there are in the Western Pacific," Dr Spence said.
"But it is not just all the parts of our community… we also need to be working honestly with our Chinese colleagues explaining how the world looks from Sydney, understanding how the world looks from Shanghai and engaging in the kind of reflective conversation that was going on today with the sort of honesty and openness that there was in the room."
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