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The Antipodean Silk Road
The case for deeper/broader engagement
Frank Tudor
National Chairman, ACBC
OUTLINE
Outline
 ACBC
 Political
 Trade
 Investment
 Opportunity
 Takeaways
THE AUSTRALIA CHINA BUSINESS COUNCIL
• The premier organisation dedicated to promoting trade and
investment between China ...
POLITICAL
The Top 10 Leaders of Global Growth
Source: Financial Times
POLITICAL
Source: Maddison (2010), Total Economy Database, IMF and Treasury.
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
35
1...
POLITICAL
Leadership in China
1949 1976 1992 2003 2012
1st Generation 2nd Generation 3rd Generation 4th Generation
Middle
...
POLITICAL
The four „uns‟ of Wen Jiabao:-
 Unstable
 Uncoordinated
 Unbalanced
 Unsustainable
The Paradox of the Four ‘...
POLITICAL
Billions $$
Unbridled Debt Financed Consumption
Overall Global Current Account Balances in 2011
-473
122
200 201...
POLITICAL
-4
0
4
8
12
16
-4
0
4
8
12
16
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Percentage pointsPerce...
POLITICAL
Source: IMF, Conference Board, UN and Treasury.
-3
0
3
6
9
12
15
-3
0
3
6
9
12
15
1980 1989 1998 2007 2016 2025
...
POLITICAL
Gini Coefficients from the UN Human
Development Report
POLITICAL
Concentrations of particulate matter
and sulfur dioxide
Source: Iworld Growth Report, Michael Spence, et al
POLITICAL
Development Strategy
Implicit or explicit
white paper on
“Australia in the Asian
Century”
Essential Role of
St...
TRADE
A simple open economy –
trading with china
Source: ACBC Household Report
TRADE
Australia's top export destinations
Source: ACBC Household Report
TRADE
Australia’s top ten
merchandise exports to China
Source: ACBC Household Report
TRADE
Australia's top import sources
Source: ACBC Household Report
TRADE
China in the Australia Household
Source: ACBC Household Report
TRADE
Chinese students in
Australian Universities
130,000 students
in 2012/13
Source: ACBC Household Report
TRADE
Chinese Visitors to Australia
2000-2010 (‘000)
Source: ACBC Household Report
TRADE
International Visitors to Australia
July 1, 2011 – June 30, 2012 (‘000)
Source: ACBC Household Report
INVESTMENT
China FDI to Australia
INVESTMENT
International Economic Indicators
Source: Lowy Institute
INVESTMENT
Composition of foreign Assets
Source: Lowy Institute
INVESTMENT
Top destinations of Chinese OFDI
Source: Lowy Institute
INVESTMENT
Top OFDI countries in Australia
Source: Lowy Institute
INVESTMENT
Regulatory Restrictiveness Index 2012
Source: Lowy Institute
INVESTMENT
Australia and other countries by sector
INVESTMENT
Accumulated Chinese ODI by industry
Source: KPMG
INVESTMENT
Chinese ODI by industry 2012
Source: KPMG
INVESTMENT
Australian OFDI destination
Source: Lowy Institute
OPPORTUNITY
Case Study – Investing in the Pilbara
 Australia-China resource partnership no longer relying on trade – now
...
OPPORTUNITY
OPPORTUNITY
Energy
(From gas to resources, renewables and uranium)
 China has a low per capita endowment
 Energy intensi...
OPPORTUNITY
Food Security
(From mining boom to dining boom)
 Global population 9bn by 2050 plus requirement for more prot...
OPPORTUNITY
Regional Initiative
Shanghai Zhongfu president Pui Ngai Wu embraces
Miriuwung Gajerrong Corporation Chairwoman...
OPPORTUNITY
Collaboration is key
 Investment proposals which demonstrate long-term commitment to
local, often remote comm...
TAKEAWAYS
1. Globalisation = macro-convergence and micro dislocation
2. High stakes + uncertain future = countries will „h...
SPONSORS
Sponsors
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Frank Tudor, Australia-China Business Council - Fostering strong resource development partnerships between Australia and China – paving the way to a new cooperative business model for mining in the Pilbara

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Frank Tudor, National Chairman, Australia-China Business Council delivered this presentation at the Mining the Pilbara 2013 conference. The conference aims to promote the sustainable development of mineral resources and the Pilbara region.

For more information, visit http://www.informa.com.au/miningthepilbara

Published in: News & Politics
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Transcript of "Frank Tudor, Australia-China Business Council - Fostering strong resource development partnerships between Australia and China – paving the way to a new cooperative business model for mining in the Pilbara"

  1. 1. The Antipodean Silk Road The case for deeper/broader engagement Frank Tudor National Chairman, ACBC
  2. 2. OUTLINE Outline  ACBC  Political  Trade  Investment  Opportunity  Takeaways
  3. 3. THE AUSTRALIA CHINA BUSINESS COUNCIL • The premier organisation dedicated to promoting trade and investment between China and Australia • A peak national body representing the collective interests of 1,000 companies • An independent, membership-based, non-profit organisation • An organisation with relationships at the highest levels of the Chinese and Australian governments • Branches in all mainland Australian states, a National Secretariat and a growing strategic presence in China The Australia China Business Council
  4. 4. POLITICAL The Top 10 Leaders of Global Growth Source: Financial Times
  5. 5. POLITICAL Source: Maddison (2010), Total Economy Database, IMF and Treasury. 0 5 10 15 20 25 30 35 0 5 10 15 20 25 30 35 1500 1550 1600 1650 1700 1750 1800 1850 1900 1950 2000 2050 China Western Europe India USA Share of world output Share of world output Re-emergence of China
  6. 6. POLITICAL Leadership in China 1949 1976 1992 2003 2012 1st Generation 2nd Generation 3rd Generation 4th Generation Middle income GDP $ 5th Generation • Chjnese Dream • Xi Jinping and Li Keqiang • A resurgent nation mindful of historical victimhood • Doubling China‟s GDP 2010 by 2020 • China – status quo player or........
  7. 7. POLITICAL The four „uns‟ of Wen Jiabao:-  Unstable  Uncoordinated  Unbalanced  Unsustainable The Paradox of the Four ‘Uns’
  8. 8. POLITICAL Billions $$ Unbridled Debt Financed Consumption Overall Global Current Account Balances in 2011 -473 122 200 201 133 91 -11 -74 149 -55 -600 -500 -400 -300 -200 -100 0 100 200 300 USA Japan Developing Asia China Middle East Russia EU Italy Germany Spain over-extended Over-heated Chinese economy Source: Professor Dick Vietor, Harvard Business School
  9. 9. POLITICAL -4 0 4 8 12 16 -4 0 4 8 12 16 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Percentage pointsPercentage points Final consumption expenditure Gross capital formation Net exports GDP Forecasts Source: CEIC China Database and Treasury. Contribution to economic growth
  10. 10. POLITICAL Source: IMF, Conference Board, UN and Treasury. -3 0 3 6 9 12 15 -3 0 3 6 9 12 15 1980 1989 1998 2007 2016 2025 Productivity Working age population Per cent contribution to growth Per cent contribution to growth China Growth outlook
  11. 11. POLITICAL Gini Coefficients from the UN Human Development Report
  12. 12. POLITICAL Concentrations of particulate matter and sulfur dioxide Source: Iworld Growth Report, Michael Spence, et al
  13. 13. POLITICAL Development Strategy Implicit or explicit white paper on “Australia in the Asian Century” Essential Role of State International context Public goods Rule of law Organisational structure Mediate strategy Australia’s Five Year Plan for the Economy…
  14. 14. TRADE A simple open economy – trading with china Source: ACBC Household Report
  15. 15. TRADE Australia's top export destinations Source: ACBC Household Report
  16. 16. TRADE Australia’s top ten merchandise exports to China Source: ACBC Household Report
  17. 17. TRADE Australia's top import sources Source: ACBC Household Report
  18. 18. TRADE China in the Australia Household Source: ACBC Household Report
  19. 19. TRADE Chinese students in Australian Universities 130,000 students in 2012/13 Source: ACBC Household Report
  20. 20. TRADE Chinese Visitors to Australia 2000-2010 (‘000) Source: ACBC Household Report
  21. 21. TRADE International Visitors to Australia July 1, 2011 – June 30, 2012 (‘000) Source: ACBC Household Report
  22. 22. INVESTMENT China FDI to Australia
  23. 23. INVESTMENT International Economic Indicators Source: Lowy Institute
  24. 24. INVESTMENT Composition of foreign Assets Source: Lowy Institute
  25. 25. INVESTMENT Top destinations of Chinese OFDI Source: Lowy Institute
  26. 26. INVESTMENT Top OFDI countries in Australia Source: Lowy Institute
  27. 27. INVESTMENT Regulatory Restrictiveness Index 2012 Source: Lowy Institute
  28. 28. INVESTMENT Australia and other countries by sector
  29. 29. INVESTMENT Accumulated Chinese ODI by industry Source: KPMG
  30. 30. INVESTMENT Chinese ODI by industry 2012 Source: KPMG
  31. 31. INVESTMENT Australian OFDI destination Source: Lowy Institute
  32. 32. OPPORTUNITY Case Study – Investing in the Pilbara  Australia-China resource partnership no longer relying on trade – now focusing on direct investment in projects  Investment moving up stream into projects, and infrastructure  Opportunity for the Pilbara –openly encouraging international investment  Investing in economic and social infrastructure builds communities, drives down costs and nurtures grassroots goodwill
  33. 33. OPPORTUNITY
  34. 34. OPPORTUNITY Energy (From gas to resources, renewables and uranium)  China has a low per capita endowment  Energy intensity increased post - WTO  Reliant on coal and imports  Negative externalities focus effort on renewables  Australia well placed with presence of 'big three' in various projects
  35. 35. OPPORTUNITY Food Security (From mining boom to dining boom)  Global population 9bn by 2050 plus requirement for more protein  Australia's understated reputation for 'quality'  Need $500 bn to capture $1.7trn opportunity for additional agricultural export  Industry structure needs to change - fragmented ownership reliant on high levels of debt to corporatised/aggregated structure. TOP 25% 55% of capital 85% of profit BOTTOM 25% 10% of capital loss making
  36. 36. OPPORTUNITY Regional Initiative Shanghai Zhongfu president Pui Ngai Wu embraces Miriuwung Gajerrong Corporation Chairwoman Edna O'Malley after the announcement. Picture: Courtesy of the ‘West Australian’ Regional Outreach and Relationships (ROAR) ACBC working with regional stakeholders to forge:  cooperation in regional development, food security, infrastructure (economic and social)  investment and community engagement. ACBC‟s reach across Australia and China, and the breadth/depth of members‟ expertise will assist regional organisations to make connections, identify opportunities, clarify objectives and support activities with China.
  37. 37. OPPORTUNITY Collaboration is key  Investment proposals which demonstrate long-term commitment to local, often remote communities and which provide access to new markets breathe life back into rural communities and must surely be welcomed for their immediate benefits and for the positive image created for foreign direct investment.  The Australia China Business Council is working with many regional stakeholders as they reach out to Chinese investors.
  38. 38. TAKEAWAYS 1. Globalisation = macro-convergence and micro dislocation 2. High stakes + uncertain future = countries will „hedge‟ 3. Australia a status quo middle power that does need not choose between friends 4. China is transitioning to lower sustainable growth rate(s) 5. Three waves of trade/investment – minerals, agriculture and services 6. Australian has opportunities in energy and agriculture (pull) 7. Australia has opportunities in services and technology (push) 7. „Political, professional and personal‟ all attest to a strong bilateral relationship “May we live in interesting times” 8 Chinese Takeaways
  39. 39. SPONSORS Sponsors
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