Home > Macfarlane > Speeches > 15th Annual China Mining Conference and Exhibition
15th Annual China Mining Conference and Exhibition
3 November 2013
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It’s a great honour to be with you here in Tianjin.
It’s now more than 40 years since Australia and China established diplomatic relations.
What began as a new, uncertain and tentative dialogue between our countries has developed into a strong, open and robust relationship.
Over time this relationship has gone from strength to strength.
- Trade between our countries has grown from A$100 million in 1972 to A$125 billion last year. One day's trade today is now worth more than three years' trade in the early 1970s.
- In 1975 the first five Chinese students came to study in Australia. Today there are nearly 120,000 enrolled.
- Only 1,000 Australians had visited China prior to 1972. Today there are a million annual visitors between the two countries.
The numbers are certainly impressive.
But the one very important thing they can’t show is the deepening of the people to people interactions that ultimately define relations between countries.
And it is the quality and sophistication of these people to people interactions that will serve us well as we look to the future.
Bilateral Resources and Energy Relations
In overall terms China is now Australia’s most important trading partner.
The success and growth of our trading relationship is most visible in terms of resources and energy.
- Australian mineral exports to China are now worth nearly A$50 billion.
- China is our top export destination for iron ore, accounting for nearly 70 per cent of exports.
- And China is our second largest export market for coal, accounting for over 20 per cent of exports.
Clearly, China’s demand for Australia’s resources is important to our economy.
It creates jobs and revenue, improves technical innovation and has helped cushion Australia from the worst effects of the Global Financial Crisis.
And I’d suggest that from China’s perspective, Australia’s abundant and stable supply of resources has been a key ingredient in your unprecedented economic transformation.
And as China, and the entire Asia-Pacific, continues to rise, this demand for energy will only increase.
Global per capita energy consumption is set to jump by close to 20 per cent by the year 2035, with the growth in China expected to be even greater, forecast to rise by 22 per cent over the same period.
In this increasingly energy-hungry environment, the security and certainty of Australia’s energy supply will not only underpin China’s development, but will play a critical role in the stable and orderly growth of the region.
Foreign Direct Investment
However, meeting global energy demand will require significant investments.
Satisfying our region’s energy demand alone is expected to require up to US$15 trillion worth of new infrastructure between now and 2030.
The Australian Government firmly believes that the best way of achieving these investment levels is through open trade and investment.
In Australia we fully appreciate the large scale and scope of our resources projects–and the significant levels of investment needed to bring them on line.
We know the timely, efficient and effective development of our resources requires outside investment.
That is why we welcome foreign investment and its role in driving local projects and helping us meet the energy demands of the region.
And we welcome the growth opportunities that foreign investment provides.
Over the last five years, 380 business proposals valued at around A$81 billion have been approved, representing an increase of 5.8 per cent per annum.
And today Chinese investment for mineral exploration and development in Australia is worth about A$10.5 billion.
We have certainly come a long way from the early days when 25 years ago Sinosteel’s joint venture with Rio Tinto in the Mount Channar iron ore project in Western Australia was one of the first Chinese investments in Australia.
The fact is that foreign investment serves both our interests.
Free Trade Agreement
Australia’s openness to foreign investment leads me to the proposed free trade agreement between our countries.
Prime Minister Tony Abbott and President XI Jinping recently discussed the importance of a free trade agreement between our two countries.
And after eight years and nineteen rounds of negotiations, the time has come to make an agreement happen.
I know that free trade agreements are notoriously difficult to negotiate, but our close neighbour New Zealand has finalised one in a much shorter negotiating period.
They’ve been beating us at sport recently and now it seems they’re getting ahead of us in the world of free trade agreements!
Our intention is to have a comprehensive agreement ready to be signed when Prime Minister Abbott visits your country in the first half of next year.
I know discussions are ongoing about the role and level of investment by state owned enterprises.
I’m not going to get into the detail of those discussions today, but I think I have made myself perfectly clear; Australia welcomes foreign investment and this should be reflected in the final agreement between our countries.
Conclusion
On first impressions, Australia and China are two very different countries.
China is the world’s oldest extant civilisation.
Over a millennia of dynasties it has been responsible for some of the golden eras of science technology, medicine and philosophy.
Its economy has been the most powerful and pervasive in the world–and is in the process of becoming so again.
On the other hand Australia is a country that is barely two centuries old.
We are the product of a handful of British colonies, on a vast continent with 50,000 years of Indigenous history and culture.
Our economy is approximately one 14th the size of China’s.
Yet despite these differences, we have a great deal in common.
- We share a commitment to mutually beneficial relationship based on common respect and open and frank dialogue.
- We share a commitment to free and open trade and investment.
- We share a commitment to forging even stronger ties between our countries.
- And perhaps most importantly, we share an interest in a regional growth and stability that delivers prosperity and certainty for future generations.
As a major trading partner and key source of resources Australia has contributed to China’s rise.
And at the same time China’s demand for our resources has contributed to our prosperity.
The strength of relations between our countries has benefited us both.
The challenge now is for us to work together, to ensure we keep our investment and trade open and free and to maximise our shared economic interests in a sensible and practical way.
Resources and energy will always be at the centre of that.
Thank you.
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