The Australian Financial Review
By Graham Bradley
President, Business Council of Australia
Australian and Chinese businesses took an important step in developing relationships at the second CEO Roundtable in Beijing just concluded.
The meeting brought together 25 of the most senior business leaders from both countries to discuss the future of the economic relationship in conjunction with the visit to China by Prime Minister Julia Gillard.
As Australia’s largest trading partner, China earns Australia more than $50 billion a year in export income. This highlights the importance of giving careful consideration to the concerns coming from those businesses buying our iron ore, coal, liquefied natural gas and other products and services.
In a dialogue that encouraged an open and respectful exchange of views, Chinese business leaders raised concerns about:
A strong perception that Australia has slower and more onerous project approval processes than many other countries. There was concern that, once a business committed to invest in resources and energy projects, it could face long and costly lead times.
A shortage of people with the key skills required to complete major new developments and the need for more flexible skilled migration arrangements.
A concern that foreign investment screening rules place Chinese state-owned enterprises at a disadvantage and clearer criteria regarding a national interest test.
Business Council of Australia participants said Australia’s foreign investment procedures were not out of step with other nations and that our approach was non-discriminatory, with very few Chinese proposals rejected in recent years.
They supported improvements that could be made to screening rules. These could involve clearer articulation of the reasons proposals were declined.
The issue of slow project approval requirements is particularly significant and it is a concern shared by Australian-owned businesses. Our delegates pointed out that one reason for lengthy approval processes was community engagement on major projects. Nevertheless, it will be necessary for business and the government to further streamline the regulatory requirements and approval procedures for major projects.
In relation to skilled migration, the government recently announced reforms to enable faster training of mature-age Australians and the introduction of fast-track visa arrangements for the construction of the largest resource projects to help reduce the lack of skilled personnel.
The discussions highlighted the need for Australian business and government leaders to improve the level of understanding in China about our rules and requirements, and to demonstrate, with examples, that we welcome Chinese investment.
The BCA will follow up on the meeting by analysing the regulations and processes involved in gaining approval for major projects. We will also examine the restrictions placed on Australian businesses seeking to invest in China. This issue was raised by the Australian participants and is critically important for our financial, agricultural and manufacturing industries, whose access to markets is often highly restricted.
The leaders of both countries recommitted to work towards a meaningful free trade agreement to open wider opportunities in these and other sectors.
Our chief executives believe that both governments should seek to ensure that inward and outward investment is supported by policies that are consistent and predictable; remove or avoid unreasonable restrictions; and encourage sharing of technology.
The implementation of climate change policies in both countries will have implications for future investment in energy. We discussed the need to ensure that national policies to reduce greenhouse gas emissions do not create disincentives to this investment.
The chief executives reported directly to Prime Minister Julia Gillard and Vice-Premier Li Keqiang.
For Australia and China to keep reaping the benefits of our rapidly growing economic relationship, we must continue discussions on bilateral matters of importance, involving both government and business leaders.
Graham Bradley co-chaired the 2011 Australia–China CEO Roundtable with Chen Yuan, Chairman of China Development Bank.