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Business must lead support for free trade

I was fortunate to be in Canberra earlier this year during Chinese Premier Li Keqiang’s trip to Australia and heard first-hand the shared commitment both China and Australia have to promoting free-trade and to realising the economic and social benefits it provides.

Premier Li’s visit coincided with a CEO roundtable, a highly productive session, but for me a key takeaway was the need for business to be an even stronger voice in advocating the benefits of open trade.

"We simply cannot allow the community to forget trade has delivered vast improvements in the standard of living for hundreds of millions.” - Shayne Elliott 

This week I’ve been in China with ANZ's full board, meeting with clients, regulators and political leaders with an aim to develop a deeper understanding of how the Chinese economy is changing. But the visit has also reinforced how vital the battle for free trade and investment remains.

Regrettably we now live in an age where politics is causing some countries to look inward, to question the benefits of free-trade and globalisation, and to step back from their role in the world economy.

Business needs to step up and fight these narrow ideas.  Not just out of self-interest but because free and open trade and investment is the foundation for prosperity in both our countries.

We simply cannot allow the community to forget trade has delivered vast improvements in the standard of living for hundreds of millions of people and it will continue to do so.

Right now, there has never been a more important time for business to engage the community about the critical role free-trade has in national prosperity and the prosperity of families and individuals.

ANZ in the region

Asia, and particularly China, is already a critical part of ANZ’s institutional business and I expect it will become even more so. Since we first established our presence in China back in 1986, ANZ has been building a unique network in Greater China and more broadly in Asia to support our institutional customers. 

There’s obviously a clear reason: the transformation of China is the single biggest economic, social and geopolitical event of the past 50 years or more. It is literally changing the world we live in - especially so for Australia.

During our board visit we’ve concentrated on emerging trends and opportunities. And we’ve been paying particular attention to e-commerce and companies like Alibaba and JD.com.

We’re also here to launch our latest ANZ insight report Now for Investment: Looking beyond trade in the China- Australia Free Trade Agreement.

Two years ago then-Australian trade minister Andrew Robb and Chinese Commerce Minister Gao Hucheng signed the ChAFTA agreement in Canberra. The new report looks at what the free-trade agreement offers business and where it is creating new opportunities for trade and investment between China and Australia.

Clear picture

We can already see ChAFTA impacts and the report paints a clear picture of where it is taking the China-Australia relationship: towards a deeper and more diversified economic engagement where trade and investment will be increasingly intertwined.

In particular we are now seeing more diversification in the trade and investment relationship beyond resources to new growth areas such as agriculture, food and beverage, construction services, commercial real estate and travel and tourism.

For me, the meetings we have had this week around the Chinese digital economy and e-commerce have been particularly fascinating. China is a global leader in this regard. Alibaba’s arrival in Australia has facilitated sourcing of pharmaceuticals and healthcare products from Australia and there are many other examples such as JD.com who have made Australia their main investment target to support its Australia Mall. 

One of the most interesting aspects of this report is its focus on the changing nature of Chinese investment in Australia.

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There is continued and growing goodwill between Australia and China. Australia is low political risk destination in which to do business. It has a high Chinese trade service infrastructure. It is a good test market. Finally - but perhaps most importantly - Chinese investment in Australia is generally profitable.

The aggregate picture is clear enough – over the last eight years the flow of Chinese investment has shifted quite dramatically from minerals and energy to now include all major sectors, including real estate, finance and agriculture.

Yes, it is early days for ChAFTA – but I hope our report provides sends a strong message our hopes for the relationship are more optimistic than ever. And supports the case for the benefit of trade and investment.

Shayne Elliott is CEO at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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