Wayne Swan condemns attacks on China investment
The Australian, 14 September 2012
TREASURER Wayne Swan says local political opposition to Chinese investment in the country is “very damaging” and he has called for a national consensus on attitudes towards foreign buying.
Defending Australia’s rules and oversight of foreign investment – which include a national-interest test that isn’t defined – Mr Swan said the country needed to embrace capital from offshore to fuel its economy.
“To have senior politicians come out and behave in a xenophobic way is very damaging,” Mr Swan told an audience in Sydney after delivering a speech at the Australia in China’s Century conference.
The conference was organised by The Australian in partnership with The Wall Street Journal.
Opposition Leader Tony Abbott in July raised concern over the level of control Beijing exercised over Chinese companies’ investments in Australia. Last month, he called for greater oversight of foreign investment in agricultural land.
That was before the government sparked an outcry among conservative politicians, led by Senator Barnaby Joyce, by approving the purchase of the giant cotton farm Cubbie Station by a Chinese-led consortium.
Mr Swan earlier today detailed an Asian Century white paper focusing on driving the nation’s productivity and resilience through five policy pillars embracing education and skills, innovation, infrastructure, tax reform and regulatory reform.
The paper, Mr Swan said, delivered a long-term vision outlining “a set of ambitious policy objectives for Australia to achieve by 2025, some of which will be implemented immediately and some that will unfold over many years”.
Declaring the “easy yards” have already been gained in reaping the benefits of the China boom, Mr Swan told the conference that maximising the opportunities offered by China “will require Australians to forge deeper and broader relationships with our neighbours at all levels – not only through economic and political links, but through social and cultural links as well”.
Opening the conference, News Limited chief executive Kim Williams said that since formal diplomatic relations were established with China in the early 1970s, “all Australian governments and businesses have rightly accorded China a special and increasingly important place in our diplomatic and economic activities”.
“In 2012 the maintenance of good relations with China is a matter of strong political consensus. On the big questions, our parliamentary system unites and gets it right,” Mr Williams said.
Also speaking at the conference, West Australian Premier Colin Barnett expressed frustration with the boom-bust mentality associated with the mining boom “and the way that distorts economic thinking and policy at a national level”.
“The perception of Western Australia and the mining industry seems to vary from boom state to China’s quarry to a land of bogans and billionaires. A little respect, please!” Mr Barnett said.
“The more substantive point is that the mining industry and the China relationship can sustain the West Australian economy for decades to come, but not the Australian economy as a whole.
“The mining industry is neither the saviour nor the destroyer of the Australian economy.”
Mr Swan told the conference the key to maximising Australia’s future prosperity lies with an Asia-literate private sector prepared to diversify into services and tourism exports as well as resources.
The Treasurer conceded commodity prices have reached their peak. But he maintained that the resources boom would endure well beyond the boom in prices, driven by investment in new projects and then an increase in export volumes.
Mr Swan said that while the government could get the policy settings right, it cannot guarantee outcomes.
Maximising the benefits of the China boom would depend “on the willingness of our people – across business, academia, the arts, across every field of endeavour – to accept change and adapt to it”.
“Our success will be in part shaped by our capacity as a nation to eschew and denounce the types of xenophobic claptrap we’ve heard from various very prominent public figures lately.
“It will be shaped by the strength of our leadership figures – both in government and civil society, including the media – to bring the weight of reason and progress to bear on this regressive fearmongering.”
The Treasurer challenged business to embrace the opportunities offered by China and the Asian Century.
“If I could distil what I’ve learned in my half-decade as Treasurer, it would be that making the most of the Asian Century will depend as much on what the private sector does as what governments do.”
Mr Swan argued that the nation did not only need “flexible, dynamic markets – we need flexible, dynamic people”.
“We need Asia-focused people as well as Asia-focused policies; this is the way for us to succeed in an Asian Century supercharged by China’s rise. Neither our luck nor our location will deliver prosperity into our laps.”
Describing China’s return to pre-eminence in the global economy as “the most momentous development since the industrial revolution re-shaped the Western world”, Mr Swan declared 2012 as a year of great significance for the bilateral relationship.
“The way I see it, this is the year where Australians are beginning to understand that the easy yards have already been made.
“Gone are the days when a passive Australia could hang its shingle out then sit back and watch the easy money roll in from China.”
But as Asia’s middle class swelled in size Australia would see “an evolution of opportunities – as this middle class demands more of our food, our services and our skill sets”.
Mr Swan argued Australia’s open, flexible and resilient economy and highly skilled, creative and multicultural population, world-class institutions and high level of productivity put the nation in a “prime position” to capture the opportunities offered by Asia.
The growth in Asia would mean Australia was no longer hampered by the tyranny of distance, with half of global output predicted to be within 10,000km of the nation’s shores by 2025.
“So we’re in the right place at the right time, but the benefits will no longer just fall in our lap. We’ve got to sprint to keep up with such rapid change.
“We’ve got to diversify – so that we’re doing as well in services and tourism and other exports as we have traditionally done in resources.”
Mr Swan said Australia needed to “inspire and develop a generation of students, workers, thinkers and policymakers that are more in touch with our region, and have a greater hunger to participate in its evolution”.
He argued that part of the conversation around the Gonski review of education funding was about how to keep up with Australia’s Asian neighbours, “who are committed to putting their kids way out in front … But more broadly still, we need to ask how we see ourselves in the Asian Century.
“How do we shape our identity as a developed nation facing East? Are we at home in Asia, as a great prime minister once declared we should be?”