Thank you very much John for those kind words.
And thank you respected members of the Australia China Business Council (ACBC) for inviting me to speak at your Networking Day here today. The ACBC has worked over the past 40 years to bring together Australia’s business sector to advance our relationship with China.
Australia and China are undergoing huge transformational change, which brings with it amazing opportunities.
We often characterise China and Australia as being in different stages of development. Australia is a relatively new and developed economy, and China is a very old country, with a dynamic and emerging economy.
However, despite how you might characterise us with a broad brush, the one thing that Australia and China have a huge thirst for, is new infrastructure.
High quality economic infrastructure underpins economic activity.
It promotes growth and employment in economies, and trade between all.
It is one of the most powerful levers to support businesses, be they small or large.
Economies around the world face significant challenges in meeting demand for infrastructure, driven by growing and ageing populations, and rapid technological change.
Australia and China have a shared interest, as we both are witnessing large demographic changes. This will require additional and new types of infrastructure.
I released earlier this month our Intergenerational Report, which highlights the many opportunities Australia has from a changing population.
To illustrate the change, in 1975, there were 122 Australian centenarians. Today there are around 4,000. And in 40 years’ time there will be around 40,000 people aged over 100.
This is something we share with China.
China’s population is ageing rapidly. By 2050, the proportion of the Chinese population aged over 60 will more than double.
This will undoubtedly result in greater demands for services and supporting infrastructure, be it in health services, accommodation and transport.
If we can get policy settings right, we can take advantage of the opportunities in our region, so that greater infrastructure can be delivered to lift living standards in Australia and China.
Australia as Chair of the G20 last year recognised the importance of infrastructure, not just in the region, but globally. In doing so, we established the Global Infrastructure Hub.
The Global Infrastructure Hub, based in Sydney, will provide dedicated resources to help implement a multi-year infrastructure agenda.
It will achieve practical outcomes on infrastructure through governments working collaboratively with the private sector.
The Hub will look to lower barriers to investment.
It will increase the availability of investment-ready projects, through developing a knowledge-sharing network.
It will build the capacity of officials through training.
And it will promote international best practice.
China recognised this, and became one of the first members of the Global Infrastructure Hub.
Infrastructure is vital for Australia and the region.
This is why Australia sees benefits in China’s initiative to establish the Asian Infrastructure Investment Bank (AIIB).
The AIIB is being developed to promote economic growth and drive regional integration. If well designed, the AIIB could play a key role in helping to address the region’s acute infrastructure needs.
The Asian Development Bank estimates there is an infrastructure gap of around $8 trillion worth of physical infrastructure required in the Asia region, over the next decade.
The AIIB could be part of the solution to help close the infrastructure gap.
In order to do this we will need a strong and well governed AIIB.
It is early days for the AIIB, but China has made strong progress on governance so far. The proposed governance arrangements will be modelled on international best practice.
We see these international best practice principles as including;
- open membership and working closely with other international organisations;
- having a high level of transparency;
- no restriction on procurement of goods or services;
- sound banking principles and high lending standards; and
- merit-based recruitment.
It is important to note that this is not another new development bank.
It is an infrastructure bank that will work closely with the private sector.
It will leverage both the capital and expertise of the private sector in delivering the massive infrastructure gap in the region.
Governments cannot do it alone.
We are considering our position and hopefully can make an announcement in the near future.
But what is important for us, is to secure Australia’s best interest in a well governed bank, working to promote greater infrastructure and growth in the region.
If we do sign the Memorandum of Understanding, Australia will move quickly to secure our place in the negotiations and will work closely with like-minded countries.
We will seek to ensure that all members have a voice in the AIIBs operations.
Any decision to join the AIIB in the future would result in Australia providing its fair contribution to the AIIB.
This would be a secure investment, and like our contributions to other international organisations, such as the Asian Development Bank, this would have no impact on the Budget bottom line.
Australian participation in the AIIB provides further opportunity to closely work with the world’s largest economy and Australia’s largest trading partner - and we want you to become an even bigger trading partner!
This is an opportunity for Australian economic growth and jobs, providing many opportunities for Australian businesses to take advantage of the growth of infrastructure in the region.