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Canberra should engage more with Beijing

By David Olsson | China Daily Global | Updated: 2023-04-18 09:27
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The Chinese and Australian national flags in Sydney, Australia. [Photo/Xinhua]

During the recent Boao Forum for Asia Annual Conference 2023, all eyes were on Premier Li Qiang as he delivered his keynote speech. We were not disappointed.

The well-crafted speech — Li's first to an international conference since becoming premier in early March — highlighted the growing importance of Asia in the world economy, reinforced key messages around the need for solidarity and cooperation in a world fraught with uncertainties, and provided international investors with confidence in China's efforts to support growth in its domestic economy.

The Boao Forum played host to more than 2,000 delegates from over 50 countries and regions. Among those attending were senior executives of major foreign companies, including Australia's Fortescue Metals, Treasury Wine Estates and Macquarie Group, as well as leading Chinese enterprises including top banks and giants of new energy.

The Boao Forum is primarily an economic platform, dedicated to improving regional economic cooperation and helping countries in the wider Asian region achieve their growth goals. As such, it was unsurprising to observe the close relationship of nations across the region.

These relationships are feeding trade and investment opportunities. They are also critical to resolving global challenges like climate change and energy and food security in a fragmented world.

The promise that Asia offers the world is enormous. It is home to more than half of the global population, one that is increasingly better educated, wealthier and full of confidence, ideas and dynamism. China has a huge and expanding consumer market, rapidly advancing technology and an increasingly skilled workforce.

However, realizing this potential is challenging. Whether the turning point we face leads to a bright or alarming future depends on how global uncertainty and strategic tensions are addressed.

The forum should serve as a wake-up call for Australia's strategic engagement with the region.

The first point to note is that the wider Asian economy is emerging as the chief driver of global growth. Combined, the regional economies are expected to contribute 75 percent of global growth. China and India alone are expected to contribute half of it.

The second is the region's priorities. Addressing the climate challenge and shaping a "new globalism" — one that is focused on inclusive, green development, rich with trade and investment possibilities, underpins regional policy priorities and actions. Green investment is embedded in China's 14th Five-Year Plan (2021-25), with its vision for a carbon-neutral China.

The third point is what this means for other nations. China's economy is creating powerful new local competitors who are looking abroad, as foreign businesses look toward the Asian region. Leaders of other nations and corporations who were in Boao made it clear — they are well down the path of talking to each other about highly strategic initiatives. Singapore sees that opportunity, with multiple green economy projects already underway with China. In addition, the European Union, Japan, South Korea, the Philippines, Malaysia and Indonesia are all in various stages of discussion with China on climate collaboration.

The final point is what it means for Australia. We need to be realistic about China's role in the global economy. There are areas where engagement is both inevitable and desirable for Australia's prosperity.

Australia's energy transition is one of these areas. Policy changes underway in Australia have spurred new investments and injected new energy into the nation's transition, but it is difficult to envisage any scenario in which Australia will achieve its desired "green energy superpower" transformation without China.

China is now a global leader of all aspects of renewable energy expansion — battery cells, wind power, large-scale electric vehicle recharging, hydrogen fuel cell vehicles and more.

Australia's challenge is to accelerate efforts to modernize its economy and rebuild lost industrial capacity.

The panda in the room is: How?

Australia has few direct ties to its largest trading partner's leadership outside of formal bilateral talks. The trust and intelligence gap will take years to fill.

However, there are promising signs. Foreign Minister Penny Wong's emerging relationships are an exception and standout, and the presence of the assistant minister for trade, Tim Ayres, at Boao was a vitally important gesture. Official visits to Beijing by Trade Minister Don Farrell and Prime Minister Anthony Albanese are also expected soon.

Embedding China in regional relationships, such as the Regional Comprehensive Economic Partnership agreement, with Australia as an active and leading partner, can provide a more effective way for Australia to manage its complex relationship with China.

Australian businesses active in China — including those that attended the Boao Forum — have blazed this trail.

There is also a need to welcome investments from China. Many Chinese investors want to help Australia's energy transition, including in value-added manufacturing capacity.

Despite differences in some areas, Beijing and Canberra remain committed to a mutually beneficial and respectful relationship. The takeaway is that Australia can remain trade-exposed to China without being dependent and vulnerable.

The next five years will be the most important we have ever seen.

Now is the time for Australia to move from being a spectator to the consequences of strategic competition to working proactively to build the capacity and skills for the next 100 years. It is also the time to shape the rules, norms and standards.

Together, we can move mountains.

The author is international director of global law firm King& Wood Mallesons and national president of the Australia China Business Council.

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