GROUNDBREAKING April meetings between the Chinese and Australian business and government sectors have taken on a new significance as a study finds Australia is facing increased competition for Chinese investment. The report Demystifying Chinese Investment in Australia: Update March 2013 by KPMG and the University of Sydney’s China Studies Centre, stated that while Australia had maintained its position as the principal beneficiary of Chinese overseas direct investment (ODI), its dominance was slipping as the Asian giant continued to diversify investment.
“While Australia’s accumulated Chinese direct investment is still ahead of its main international competitors, there is no denying that the rest of the world is hot on our heels and aggressively competing for Chinese capital,”
University of Sydney Chinese Studies Centre Professor Hans Hendrischke said. The report indicated the US and Canada were catching up with Australia as countries of significance. On 9 April, Prime Minister Julia Gillard concluded her second visit to China following discussions with China’s new President Xi Jinping, just weeks after the country’s historic leadership transition.
The Australian and Chinese leadership groups announced a series of significant policies spanning business and finance, tourism, international cooperation, defence and climate change. Ms Gillard flagged a deal that would see the Australian dollar as the third currency to exchange directly with the Chinese yuan, along with the US dollar and Japanese yen, which would save transition costs for trading Australian and Chinese companies.
The Australian Chamber of Commerce and Industry stated that the direct currency convertibility would boost trade between the nations.
“Making it easier to do business often involves a myriad of small steps, of which today’s announcement is just one, but an important and welcome one,” ACCI chief executive Peter Anderson said in a statement.
Australia and China have also formally committed to annual leadership talks, giving the Australian Government greater access to the Asian superpower than almost any other Western nation.
“Right around the world, countries are competing for China’s attention,” Ms Gillard said at the end of her visit.
“They want their issues to be right there at the forefront of thinking in China.
“What we have secured is a structure that says we’ll be there at the table. We won’t have to compete every time to get to the table. We’ll be there at the table.” Ms Gillard and Chinese Premier Li Keqiang were also present at the 10
April signing of a financing agreement of MMG’s Dugald River project between the China Development Bank, China Minmetals Corporation and MMG.
The China Development Bank has committed to the provision of a loan of up to US$1 billion across a 13-year period to fund the development and construction of the Dugald River zinc-lead-silver mine in Queensland.
“MMG is uniquely positioned to be part of the deepening partnership between Australia and China,” MMG executive general manager business development Michael Nossal said in a statement.
Concurrent with the Prime Minister’s visit to China, the inaugural meeting of the China-Australia Senior Business Leader’s Forum was held in Hainan Province on 6 and 7 April.
Twenty-three business leaders attended from the two countries, representing a number of sectors including mining.
The forum was initiated following a 2012 meeting between Chinese and Australian delegates, including Fortescue Metals chairman Andrew Forrest.
It was touted as their first ever businessto-business dialogue, aimed at facilitating communication and discussion on challenges and opportunities in economic, trade, investment, cultural, philanthropic and political relations.
“China and Australia have many business activities between them, but they do not have a non-governmental platform to exchange views,” China Eximbank chairman Li Ruogu said.
“The importance of China-Australia relations absolutely goes beyond the import and export of minerals. “It is imperative that we make this work.”
“As Australia stands ready to support China’s historic task of becoming a middle income country over the next twenty years, I am delighted that these two groups of business leaders have resolved to breathe life into a permanent engagement to build understand and trust between us,” Mr Forrest said.