00:00Certainly timely to debrief on that roundtable and some of the engagement that's taken place.
00:05The sort of Chinese state media approach to this has been very positive in terms of some of the glowing reviews over this visit from the Prime Minister.
00:14Can you tell us about perhaps some of the deliverables or the areas of agreement that we've reached?
00:23Thank you and good morning.
00:25Yes, the press generally has been very positive both in China and also in Australia.
00:30The whole point of this visit was not so much to re-establish the relationship after a difficult few years,
00:36but to find commonality, to work out where we can work together in the way forward.
00:42So while there's a very big business delegation accompanying the Prime Minister on the delegation,
00:50it's not the commercial outcomes that are actually the drivers.
00:55We're trying to seek commonality of interest, as I've said.
00:57So the first big outcome, though, was the signing of a new agreement around trade in tourism.
01:05Tourism is one of Australia's biggest trade sectors.
01:10It's worth about nine billion Australian dollars every year.
01:13And the Tourism Authority in Australia and Travel.com, a big startup in China, agreed to reactivate that.
01:20So that people activity was a very significant part.
01:24The only other so far most significant commercial activity was a discussion that the Prime Minister led in Shanghai on Monday
01:32with four of Australia's top iron ore producers and China's top consumers of iron ore, the steel producers.
01:41And that was a very constructive discussion.
01:43It's the first time I think we've had in recent years a conversation about the importance of Australia's iron ore sector and resources sector to China.
01:51And there was real agreement there that there is an opportunity to work together to decarbonise the steel sector right across the value chain.
01:59And apart from that, many, many other sort of smaller MOUs have been signed by companies.
02:03But ultimately, this is all about showing intent that Australia and China want to work together and that we have ambition to find ways in which we can do so.
02:13Even within the commercial realm, it's not always sort of clear areas for agreement, right?
02:18We heard that Chinese Premier Li Tiang apparently had redoubled down on efforts for looser foreign investment restrictions on Chinese businesses coming into Australia.
02:29Was that raised at all, some of the restrictions when it comes to FERB?
02:35So we had a large roundtable yesterday.
02:37We had 14 delegates from Australia, 14 from China at the most senior levels, each went around the table with both the opportunities and the challenges.
02:46Certainly from the China side, a couple of the investors who have businesses in Australia talked about the business environment.
02:54They talked about their desire for it to be freer and more open.
02:58But on the other hand, I think there was a strong recognition that Australia's foreign investment rules, while there might be some circumstances where China has not been successful, but that they are broadly satisfactory.
03:10No major complaints about that.
03:12The challenge is really just to find the opportunities that can be worked through that meet the national interest test in Australia, which is exactly the same as happens for investment into China.
03:22David, we do have to discuss some of the risks going forward because, you know, we saw in the past few years under the Morrison government just how quickly the wind can change.
03:34It wasn't that long ago Australia was suffering some quite severe trade strikes at the hands of China.
03:39Can you see a scenario where that might happen again or has there been some discussion on this visit of getting some guardrails in place?
03:47Well, the discussion around guardrails or building resilience is not something that's necessarily happened on this delegation.
03:55But, you know, over the last year or so, there's been very intense conversations in Australia about how do we continue to find that balance between maintaining a very strong economic relationship with Australia,
04:07which is critical to jobs, employment and prosperity against the security and national interest aspects of Australia's foreign policy.
04:16The strategy that many companies have been adopting, which is the one that the government has been encouraging, is one of diversification.
04:23So China is still an important market, but look to other markets to manage the risk of over-reliance on one single market.
04:30That's all right in theory. The fact remains, though, that China is by far our largest trading partner.
04:38You know, it exceeds the trade value the next four jurisdictions combined.
04:44So we can't look away from it. How do we manage that risk?
04:48Well, it's one of building resilience and that's happening in different ways.
04:52For some example in the iron ore sector, there's a lot of work around creating long term partnerships,
04:58looking at that green iron ore supply chain right through from, you know, extraction, processing, export and then the final steel manufacturer
05:07and working out where does Australia fit into that equation in that value chain to make it sticky
05:12so that the relationship is less likely to be subject to any adverse geopolitical issues.
05:17And that same scenario is applying across the board. In the agribusiness sector, we're seeing Australia is moving away from just being an exporter of high quality food
05:27and agricultural commodities, which we certainly will continue to be, but looking more at the more sophisticated ends of the relationship.
05:36Ag business, ag tech, you know, how can we take Australia's services sector in the agricultural space to help China boost
05:42and make more efficient its agricultural sector. And we had, for example, a rice producer on the delegation who was talking about partnerships
05:50to share technology and information around the management of water levels for rice production.
05:58And this happens right across all the sectors. So I think, you know, it's a story that's different for every company,
06:04but companies are well aware of the risks of over-reliance.
06:06They're well aware of geopolitical risks and they're trading very carefully.
06:12We risk to be fragile, but the opportunity is still worthwhile.
06:17David, that's a good jumping off point for our last question here.
06:20There is a review of the free trade agreement underway.
06:23I'm sure this is something that the Australia-China Business Council has some views on.
06:26What would you like to see changed?
06:29Well, we've had 10 years of remarkable success under the free trade agreement between China and Australia.
06:35We celebrate that in December of this year.
06:39What would we like to see in it?
06:41Well, there's a number of areas where we know that both governments are starting to look at,
06:45and that's to remove some of the behind-the-border customs barriers,
06:50dealing with issues around traceability for products and how we use technology and digital systems
06:57to enhance our ability for our markets to connect to each other.
07:01That's one clear area.
07:02We're broadly continuing the focus on the services sector, which is the growth area within China,
07:08as its consumers demand a different sort of service,
07:12and Australian companies are well suited to provide that.
07:16So looking at the new areas around technology that might need some work there.
07:22I know the topic is AI.
07:25Our Prime Minister has said that AI won't be the subject of the next round of free trade agreement discussions.
07:31I think the reality is that we get a little bit blindsided by the use of the term AI.
07:37Really, we're talking about AI, robotics, data, and a whole range of things,
07:43and advanced manufacturing, all of which are critically important to Australia's ability to connect to China.
07:48So whether that forms part of the free trade agreement, part of broader discussions, remains to be seen.
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