China Studies Centre: Engaging China

1 December 2011

The Sydney China Business Forum, a major new initiative of the China Studies Centre at the University of Sydney, was launched in Sydney yesterday.

The forum is a new annual event which will pivot business, government and expert attention to Australia's international partner. Its aim is to strengthen knowledge, skills and networks with China, with a particular focus on business development and emerging markets.

Leading figures from government, business, finance and industry from Australia and China discussed challenges and emerging opportunities including new investment possibilities in agriculture and health, Australia's role in China's currency distribution and the importance of Australia's defence arrangements to its business relationship with China.

Backed by the City of Sydney and sponsored by leading law firm Corrs Chambers Westgarth and a number of other business groups, the Sydney China Business Forum brings together the combined expertise of more than 150 researchers at the University's China Studies Centre with that of global business advisors KPMG.

Professor Hans Hendrischke, Executive Chairman of the China Studies Centre, reported on joint research conducted with KPMG on China's outbound direct investment (ODI) in Australia which shows that NSW has the widest diversification of Chinese investment across different sectors.

"Encouraging Chinese investment in a spectrum of non-resource Australian industries may increase the potential for greater ODI stability - and growth - over the long-run," Professor Hendrischke said.

"Chinese investment is crucial for future development of the Australian agricultural sector. More Chinese ownership of Australian agricultural assets may be welcomed if it were accompanied by capital injections into the relevant industries and transfers of management skills and technological innovation."

For Jason Li Yat-Sen, Chief Executive of Beijing based Yatsen Associates, increased Chinese investment in this country's national building infrastructure would play a major role in addressing Australia's decline in productivity.

Commenting on investment in the other direction, Ian Bauert, Managing Director in China for Rio Tinto, observed that China's service industry is expected to grow from 43 to 48 percent of the economy in the next five years. He identified the need for health care services for China's ageing population as a major opportunity for Australian providers.

Australia's role in a possible internationalisation of the Chinese currency was encouraged by Warwick Smith, Chairman of ANZ Bank, who said the Renminbi and not the US dollar should be used in certain trade deals such as the recent Fortescue iron ore settlement and Australia should also participate in currency swaps.

Mr Smith underlined another emerging theme of discussions - the Chinese government's perception that Australia's security and economic relations are interdependent.

"In the Chinese mind the (Australian federal government's) Defence White Paper and Asian Century White Paper are not separable," Smith said. According to John Denton, Partner and CEO of Corrs Chambers Westgarth, the need for Australia to define its security arrangements with China is also an economic priority.

One of the personal perspectives came from one of China's best known investigative journalists, Hu Shuli, editor-in-chief of the Caixin business and finance media group.

"Behind the booming facade is a market lacking transparency, ridden with corruption, weak in intellectual property rights protection, and most dangerously, encouraging an advance of the state monopoly, through favourable regulations, heavy subsidies, cheap loans, and market accesses, at the cost of private players," she told the forum.

"Next year it's the second year in China's twelfth five-year plan and it's a testing time whether the economic transformation, charted out in the grand plan, will be actually implemented.

"Being at a China event like this you feel like you are receiving dispatches from the front line - things change so quickly," said Dr Michael Spence, Vice-Chancellor of the University of Sydney.

"We are proud to be playing a pivotal role as thought leaders, helping Australian policy makers and businesses develop a deeper understanding of China as a result of this forum," he said.

"The China Studies Centre not only has an important academic role but a crucial role in providing public and government education on issues of importance to China and Australia."

Contact: Verity Leatherdale

Phone: 02 9351 4312, 0419 278 715

Email: 400f43392c146a5908092d29261107061a15323c2d025d2c155a3d50037d0325