30/11/2011
A bold and expansive vision, similar to that shown by Labor on economic reform in the 80s and 90s, would be required if we are to continue to capitalise on China's growth, Professor Geoff Raby has told attendees at CEDA's annual dinner in Brisbane.
Providing the keynote address on Australia's China Challenge, Professor Raby, who concluded his post as Australia's Ambassador to China in August, said Australia was so heavily hitched to China now we would be in for a "white knuckle ride".
"The challenge for Australia in China's growth over the next 20 years is not to stand back from it or to try to pretend it's not happening or will go away or to seek to build relations with smaller weaker states, it is to recognise the reality of it and the vast implications it holds for Australia, possibly more so than for any other country, and to imagine how we can use it to strengthen Australia and our prosperity," he said.
He pointed out that our exports to China are now worth more than the combined value of exports to our third, fourth, fifth and sixth biggest export markets.
"It is our single biggest export market having overtaken Japan in 2009, and the important point about this is not only the size but the fact that no other country will ever overtake China as our biggest export market unless China collapses," he said.
He said it was a safe assumption that China would be at least four times bigger than it is today in 20 years and the probability of political unrest was very low.
Australia's proximity to China and high quality resources were our strengths in our relationship with China, Professor Raby said, highlighting that two significant areas of opportunity for Australia were the steel industry and agriculture.
However, he said Australia's poor infrastructure was an issue but we could have high quality infrastructure if we were open to Chinese capital and skilled labour.
He highlighted Chinese investment in Australia was another key aspect of our relationship in addition to our exports.
"Chinese investment is bringing into production new resources. It is almost entirely Chinese investment that is developing the magnetite iron ore deposits of WA that had previously been ignored by the mining giants and the coal seam gas in NSW and Queensland is similarly being developed by Chinese investment primarily," he said.
He suggested it may also be time to seriously revisit fast trains on the east coast with Chinese capital and construction systems.
Members: for event audio, click here
Professor Raby's Speech transcript