It is wonderful to welcome you, Premier Li, here in Australia with your wife Professor Cheng Hong. Lucy and I are looking forward to spending some time with you tonight. And also it is wonderful that you have brought so many of your distinguished Ministers here, the Foreign Minister Wang Yi, the Minister for Commerce and NDRC. And of course our Ministers are here as well – Steve Ciobo, the Trade Minister. And of course distinguished state and territory leaders from Australia – I see the Victorian Premier there and other Premiers being here at an earlier meeting. Provincial leaders from China as well.
So this is a great gathering of leaders from China and Australia at a political level, at the provincial and sub-provincial and state levels, sub-national level and so many business leaders as well.
Perhaps more than any other country, Chinese leaders draw strength and guidance from the lessons of history.
Deng Xiaoping reached back into the 15th century when in 1979 he began to open China to foreign trade. And he called up the great example of Admiral Zheng He. And he said and he was right that history had proved that when China was open and engaged with the world it was strong and when it was closed to the world, it declined. He said this was the time to open China up again to the world. That was the leadership he gave, drawing a lesson from the history of centuries passed.
And since then the world has been amazed by China’s dramatic rise, growing at an annual average of 10 per cent since 1980, but of course the long view of history, Chinese people can recognise this as a return to the natural order of things.
In fact, the late Angus Maddison, the great OECD economist that constructed national accounts going back centuries, in fact millennia and he concluded that from antiquity until the middle of the 19th century, several decades into the industrial revolution, China and India were the two largest global economies, accounting for around 50 per cent of the world’s output over most of 18 centuries.
So as we learn from the past, it is my great pleasure to be here today among people, Chinese, Australian leaders who share a common desire to see our two great trading nations strengthen our economic relationship.
It is a trade we believe may have involved a global production chain from China to Arnhem Land well before European settlement - judging by Qing Dynasty coins discovered on Elcho Island near Arnhem Land, most likely via Indonesian or Macassan intermediaries.
Over the last two days, Lucy and I have had the honour of hosting Premier Li and Professor Cheng Hong in our magnificent country.
We have spoken of the great respect and fondness that exists between our peoples, the cultural and educational ties that enhance our understanding of each other, and the desire to align our economic fortunes.
We enjoy a longstanding and successful partnership. It is a partnership built on those cultural and personal ties. People to people ties. Family ties. And one built on the complementarity of our economies.
China’s manufactured goods provide key industrial inputs and meet consumer demand here, reducing the cost of living for Australians.
Reliable, high quality Australian resources and energy exports have been integral to the building and powering of China during its period of rapid infrastructure-driven growth. In 2016 we exported 650 million metric tonnes of iron ore to China, 5 times as much as we did in 2006.
But our economies have been intertwined for much longer and beyond raw materials and manufactures.
When I was in Shanghai last year for Australia Week in China, I spoke about one of Australia’s early investments in China – dating back to 1917 – the Sincere Department Store.
Ma Ying-Piu, the son of a Chinese-Australian goldminer, took the ideas about customer service that he had learnt working at David Jones and applied them with great success in Shanghai and Hong Kong.
Not long after, other Chinese-Australian businessmen noticed his success and followed, building what were known as the Four Great Companies, which dominated the Shanghai skyline.
Even in those early days, our relationship was not just about capital, but about the transfer of innovative ideas, and the opening to competition driving ever-improving goods and services.
Australian direct investment in China continues to grow, to a stock of $14.1 billion in 2015 from only $847 million in 2005 – which was a very long way from the stock of Australian investment in 1993 and ‘94 when I was making my own investments, Mr Premier. So we have seen phenomenal growth.
And Australia too welcomes investment from China. Australia is a favoured destination for Chinese investors and China is the fifth largest source of foreign direct investment in Australia—increasing from negligible levels in 2005 to a stock of $35 billion in just 10 years.
Where, traditionally, Chinese investment was in the minerals and energy sector and real estate, it is now diversifying into the agriculture, dairy, infrastructure, tourism, and health sectors.
This investment helps to grow our economy and generate jobs. It delivers investment that delivers the jobs and the growth that we need. It provides the capital to develop our agricultural sector, expands the operations of successful businesses so that they can compete internationally.
And most importantly, China’s investment also strengthens our linkages to distribution networks and sales channels, increasing our reach into China’s markets.
We saw a fantastic example of this, just today, with Andrew Forrests’s Australian company Minderoo and the leading Chinese e-commerce firm JD.com, whose CEO Richard Liu is here as well, agreeing to establish a $500 million fund to develop premium Australian food products including constructing new food processing operations in Australia.
They’ll market the products in China via JD.com’s online platform, showcasing the distinctive quality of Australian produce to China’s vast and growing middle class.
And it is China’s vast and growing middle class that is transforming our economic relationship. China is transitioning to be consumer-driven economy, just as Australia strives to become more diversified, more innovative, producing high end goods and services.
And we are well-placed to provide the safe, high quality foods, beverages, goods and services that China discerning middle class are demanding.
Already, in 2016, 157,000 Chinese students chose our educational institutions to study at and 1.2 million Chinese tourists visited to experience the wonders of Australia, our cities, the outback, our beaches, all of the great resorts and opportunities here.
And in the China Australia Free Trade Agreement, one of whose architects Andrew Robb is here with us, we have the perfect platform to facilitate this growth in our relationship.
ChAFTA has delivered three rounds of tariff cuts since December 2015 and now over 96 per cent of goods trade in both directions is eligible for either duty free or preferential status.
The early results are very compelling.
In 2016, exports of fresh Australian cherries increased by 86 per cent in one year.
Skin care products were up 82 per cent in one year.
Skim milk powder exports were up 53 per cent to $162 million in one year.
Companies such as Blooms Health Products in Sydney tell me they have experienced huge growth because of ChAFTA and this week concluded an agreement with a major Traditional Chinese Medicine company to distribute their products in China, which will see a $60 million injection into the Australian economy, creating more manufacturing jobs here in Sydney.
Premier Li and I intend to build on this success. We have agreed on a major agricultural package to increase the number of companies that can export Australian beef to China.
Make no mistake, this is a big deal. As the Premier learnt yesterday, the Deputy Prime Minister, Barnaby Joyce, is truly excited about it, filled with enthusiasm! It delivers incredible market access in China to top-quality Australian beef.
In our talks our two nations have agreed to work together on agricultural research and food safety standards.
And we have decided to bring forward the review of ChAFTA’s service and investment chapters. And as the Trade Minister told me just a moment ago, the progress is going very well indeed.
This will open further doors for our health and aged care services, our universities and colleges, and our professional services firms to do more in China.
Firms such as the Australian architectural firms that designed seven of the state-of-the-art Olympic venues which contributed to the great success of the Beijing Olympics, including the award winning ‘water cube’.
Premier Li and I are also strong believers in innovation. We know that is the critical driver of productivity and that is the driver of economic growth.
We are already a top research partner to China, behind only the UK and United States in the volume of joint research produced with China.
To bolster this, we’re announcing up to $6 million each in funding over three years for the Australia-China Science and Research Fund to focus on advanced manufacturing, medical technology, pharmaceuticals, resources and energy.
And we are establishing a new Ministerial Dialogue on Innovation to drive greater collaboration between our researchers, entrepreneurs and companies.
Our dynamic economic partnership is proof that trade and investment liberalisation is the clear path to economic security and prosperity.
Over the past 30 years—as Australia and China both undertook reforms to open our economies to global markets—our living standards have risen and in China of course, the transformation is probably the most dramatic economic progress in the history of the world. Hundreds of millions of people have been lifted out of poverty in a generation.
Liberalisation has driven productivity, created jobs, raised incomes, and lowered prices. Any retreat from this path, will only undercut the gains that we’ve made and would risk us going backwards.
We know what protectionism delivers. It is not a solution. It’s not a ladder to get out of the low-growth trap. It’s a shovel to dig it deeper. We’ve seen the film before. We saw what happened in the Great Depression when countries started to put up tariff barriers and protectionism was rampant. All it did was make the situation far, far worse.
We know that the cooperation between China and Australia showcases to the region and the world our determination to defend trade liberalisation and advocate the benefits of free trade. We must as President Xi has reminded us at Guangzhou last year and Davos this year, we have to make the case for trade.
That is why we have to remind our communities that trade creates jobs. It enables businesses to do more, to export more, to invest more. All of that opens up enormous opportunities.
The Premier and I have reaffirmed again during this visit we will work to conclude an ambitious Regional Comprehensive Economic Partnership. And that’s an important element in the growing, developing Australia-China relationship. It is one with a bright future, full of mutually beneficial collaboration.
So I want to thank you all for what you are doing. This extraordinary relationship, delivering on this shared destiny is not just the work of leaders and of governments and ministers. It is the work of thousands and thousands of Australians and Chinese people. Thousands of businesses, some of them very small enabled for the first time to reach a global market because of online platforms like JD.com or Alibaba.
But it is your work that is so critical to this, your imagination, your courage, your optimism. We share it, we applaud it, we salute you.
We thank you for the continued commitment you’ve made to the growth and evolution of our economic partnership.
Premier Li I want to thank you for your leadership and your vision in this area of vital importance. Your leadership has been so critical to the development of this strong relationship between our two great nations which I know will continue to flourish into the future.
Thank you very much.