Bo’ao, Hainan Island
IT was all business for the Australian contingent – lead by PM Julia Gillard – at China’s Bo’ao for Asia Forum on the resort island of Hainan on Saturday.
But the message for the government was not good with Chinese participants on the inaugural Sino-Australia Business Leaders Initiative saying there is still too much inconsistency for Chinese companies trying to invest in Australia. Certainly China is looking further afield, particularly to Africa’s largely untapped mineral wealth for fresh sources of supply but Australia remains a close and reliable – in terms of sovereign risk – place to invest. While the big iron ore deals have all been either done or not done (in the case of Rio Tinto) dozens of Chinese companies are running the rulers over various coal assets in Australia right now and gas remains a likely target.
Lead by Fortescue Chairman Andrew Forrest and China EXIM Bank Chairman Li Ruogu the aim of the half day long meeting was to cut out the unnecessary formality of government sponsored meetings and talk frankly and openly about business issues on both sides of the $100 billion plus a year business relationship.
By all accounts it succeeded. Participants in the event almost unanimously said it was a particularly forthright and honest exchange of views with many such as Business Council of Australia chairman Tony Shepherd saying it was the most upfront talks with Chinese counterparts they had ever experienced in a business forum. Many also agreed that such a get together was long overdue as the Australia-China relationship has founded in the past five or six years. This is a terrific step in revitalizing it.
Topics covered included investment, aviation, Australian housing, regional security and cultural differences. Still, the proof will be in the pudding many admitted and the group is sensibly focusing on getting results in two areas. For the Chinese access to and investment in Australian rail and port infrastructure and for Australia, the availability of landing slots in Beijing. (Qantas gave up its slots in Beijing four years ago after losing $30 million or so each year on the direct route but now wants to breathe life into its China business via Jetstar and its alliance with China Eastern Airlines.)
It was an extremely impressive group of people and a tribute to Forrest and Li’s arm twisting abilities, many with links to two of the Initiatives organizers former China Ambassador Geoff Raby and media mogul Wang Boming who runs Caijing magazine. The two have been designated joint Secretary General’s of the Initiative which plans to have three more meetings before gathering again at the G20 Summit in Brisbane next November.
Gillard met with the twenty three business leaders from Australia and China who included three of Australia’s biggest banking chief executives ANZ’s Mike Smith, Westpac’s Gail Kelly and Macquarie’s Nicholas Moore. (The full list of attendees is attached).
As well, she met IMF chief Christine Lagarde as well and former PM Bob Hawke, one of the founding board members of Bo’ao Forum and national leaders from Mexico, New Zealand and Brunei.