China and Australia’s Complementary Economies and Shared Responsibilities

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Dean Xiang Bing speaking at the 2019 China-Australia Business Forum

Cheung Kong Graduate School of Business (CKGSB) along with the Victorian State Government and the CKGSB Australia and New Zealand Alumni Association jointly hosted the 2019 China-Australia Business Forum in Melbourne on May 2^nd, convening 250 senior business and government leaders from the two countries to shed light on economic outlooks, bilateral relations and new growth sectors, including agriculture, e-commerce, healthcare and investment. The event was livestreamed to a further 150,000 viewers via Phoenix media. Today, China is Australia’s largest trading partner and since the establishment of the China-Australia Free Trade Agreement in 2015, trade between the two countries has increased by $62 billion, resulting in a total trade of $153 billion in 2018. Given socioeconomic, technological and geopolitical transformations occurring globally, the two countries’ complementary economies are as well changing, bringing about new opportunities for trade.

At the forum, the Premier of the State of Victoria the Hon Daniel Andrews reflected his views on the important China-Australia relations via a video messaged made especially for this event, in which he said, “Australia’s partnership with China is built on the firmest of foundations. It’s much more than just trade and transactions. It’s based on shared trust and true friendship. That’s what underpins our successful China strategy. It’s the reason why today we’re the only Australian state to have joined the Belt and Road Initiative, which I was honored to be part of and discuss with our partners in China just last week.” With regards to the Forum, the Premier expressed his emphasis on the need for such platforms connecting the two countries. “The China-Australia Business Forum builds on our shared successes,” said Premier Andrews, “and while I can’t be there today, I know – in fact, I’m certain—it’ll play host to some very important conversations. I would like to thank the Cheung Kong Graduate School of Business and everyone who dedicates themselves to bringing our people and our states closer together.”

Sharing the Premier’s views, the Chinese Consul General in Melbourne, Long Zhou, said, “China and Australia are important partners to each other. The two countries share broad common interests in maintaining regional peace and stability and in promoting common development. In fact, their interests are far greater than their differences. Promoting the sustainable development of China-Australia relations is also aligned with the interest of the people of the two countries.” The Consul General also praised the agreement between the Victoria State Government and China National Development and Reform Committee on the Belt and Road Initiative signed in October 2018. Finally, Long Zhou also expressed his appreciation for CKGSB in holding this important China-Australia Business Forum to promote economic and trade cooperation and exchanges between the two countries.

The Forum first provided a wider perspective of the global business landscape through CKGSB’s Founding Dean Xiang Bing’s keynote speech that looked at “Development Models and China-US Trade Frictions,” and its impact on global trade, including that between China and Australia. “Today, more than ever before, we have multiple, ongoing transformative and disruptive changes covering economic development models, technology, social systems, global trade and investment systems, global governance, geopolitics, as well as climate change and sustainable development,” said Dean Xiang. Quoting Charles Dickens famous saying, ‘It was the best of times, it was the worst of times’, Dean Xiang added “That’s why China and the US, the world’s two largest economies, should cooperate to ensure it will be the best of times.”

CKGSB Founding Dean and Professor of China Business and Globalization, Xiang Bing, delivering his keynote speech on ‘Development Models and China-US Trade Frictions’

Austrade’s CEO Stephanie Fahey echoed Dean Xiang’s remarks by saying, “The connections, like the ones here today, bring bilateral relations alive and it’s in times like these that we need to call on those connections. The theme of today’s Forum—Shared Responsibilities between China and Australia in an Era of Global Transformation—is pertinent given the events that are unfolding in the world economy. The competition between the US and China creates ripples around the world. We need to encourage that these frictions are resolved in a way that maintains a global balance of a multicolored world.” Resonating what soon became the recurring keyword of the day, Dr Fahey emphasized the complementary nature of the China-Australia relations. “The relationship between China and Australia is not a fiercely competitive relationship,” said Stephanie. “In fact, our two economies are the most complimentary ones in the world. It is our shared responsibility to ensure that continues to be the case.” 

Dr Stephanie Fahey, CEO of Austrade, delivering her keynote speech on ‘Trade and Investment Relationship between Australia and China’

Shedding light on the recent trends of the Chinese and Australian economies, CKGSB Professor of Economics Li Wei and Australia China Business Council President John Brumby each delivered a keynote speech, prior to joining a panel discussion with other distinguished speakers, including the Melbourne Business School’s Dean Ian Harper. “We are strong believers and supporters of the Belt and Road Initiative,” explained the Hon John Brumby. “We believe it is a great project to boost our economies and lift our neighboring countries out of poverty. The Australia China Business Council believes that if we could move a step closer towards the Belt and Road Initiative, it will be good for our economy, our region and global prosperity.” John also described the need for enhanced understanding to ensure such initiatives are successful. “Many people still misunderstand China. It’s a very digital market today. Last year on Alibaba’s Singles’ Day, sales topped 30 billion USD in 24 hours. What’s driving this is China’s new middle class, which will make up 30% of China’s population by 2020, these are households of over 30 thousands USD a year and whose aspirations are the same as that of the Australian middle class.”

The Hon John Brumby, National President of the Australia China Business Council and former Premier of the State of Victoria, who shed light on the importance of the Belt and Road Initiative

Turning to China’s economy and the recent dip witnessed in 2018, Professor Li Wei explained the results, which are accurately reflected in the monthly CKGSB Business Conditions Index (BCI) that surveys Chinese leading businesses, many of which are run by CKGSB alumni. “In 2018 we saw a rapid shock in financing to private businesses in China, but thanks to the country’s infrastructure, this was not felt in the China-Australia trade,” said Prof. Li. While China’s economy is going through a new normal, under which the growth rate will not be as high as before, Prof. Li remained positive. “We still see from our BCI data that a 6% growth rate is achievable, and this should bode well for China and its trade with Australia.”  

CKGSB Professor of Economics, Li Wei, speaking on ‘China’s Economic Outlook’

The China-Australia Business Forum also included three Fireside Chats on Agriculture and E-commerce, Healthcare and Wellness, and Investment Opportunities, between business leaders from China and Australia. Joining one of these sessions was Alibaba Group’s Managing Director for Australia and New Zealand Maggie Zhou, who shed light on China’s e-commerce trends and opportunities for Australian companies. “China’s growing middle-class consumers are seeking higher quality products online, they want to better understand the culture and story behind the brand, and they care more about the customer experience,” explained Maggie. “For these reasons, increasingly there are more types and quantities of Australian products sold on Alibaba’s online and offline channels, including Tmall, Hema Fresh and Taobao Global.” 

Alibaba Group’s Managing Director for Australia and New Zealand, Maggie Zhou, speaking on the Fireside Chat on ‘Agriculture and E-commerce’

Other notable speakers from the business sector included David Nation, Managing Director from Dairy Australia; Justin Howden, Group Head, Global Government Affairs and Industry Development, H&H Group; Fu Jianping, Chairman of Greenwood Group and CKGSB alumnus; Mark Middleton, Group CEO of ICON Group; Chiu Yung, President of Fu Wah International Group and CKGSB alumnus; and Doug Ferguson, Partner in Charge of Asia and International Markets and NSW Chairman at KPMG Australia, among others.

Left to right: Fu Wah Group’s President and CKGSB Alumnus Chiu Yung; KPMG Australia’s Partner in Charge Doug Furguson; and Jeremy Blackshaw, Office Managing Partner and Head of Melbourne M&A Corporate Group at MinterEllison

The China-Australia Business Forum is the by-product of a partnership agreement signed between CKGSB and the Victorian State Government. Explaining this background, CKGSB Assistant Dean Zhou Li said, “On November 28, 2018, at the Women in Leadership Forum we co-organized with UN Women, CKGSB and the Victoria State Government of Australia officially announced our partnership and signed an MOU to collaborate in promoting the economic ties between China and the State of Victoria. Only 155 days later, we are meeting here and now to have our first forum.” Stressing the importance of mutual understanding, he added “We believe that all of the attendees here today are among the most global-minded business people in China and Australia. We hope that the forum today will help you understand the other side better and make the first step of your long-lasting relationship. In the world of uncertainty, it is certain that sustainable partnership can only be built on mutual respect and trust, which starts with mutual understanding.”

CKGSB Assistant Dean Zhou Li delivering Welcome Remarks at the Forum, where he emphasized the partnership between CKGSB and the Victorian State Government

Representing the Victorian State Government, their Commissioner to China Tim Dillon stated: “the Victorian Government is delighted to collaborate with one of the region’s most prestigious business schools, and we welcome CKGSB’s expanded presence and profile in Australia. We recognize the many eminent CKGSB alumni attending today’s Forum, and we also acknowledge many more who have leadership roles across industry and government in China. As the Australian State with the largest footprint in China we value our relationship with the CKGSB and its network as it contributes to our strong commitment to strengthening business, cultural and people-to-people links between Victoria and China.”

Victorian Commissioner to China Tim Dillon commencing the China-Australian Business Forum as the Emcee

After the China-Australia Business Forum, Dean Xiang re-affirmed the increasing importance of China-Australia ties. “Today, China is transitioning from an investment and export-led economy to an innovation and consumption-driven one,” said Dean Xiang. “This changing economic landscape—combined with the Chinese government’s new rounds of reforms and opening up—may generate enhanced collaboration opportunities for Chinese and Australian businesses. In the era of transformative changes, China and Australia have the joint responsibility to ensure that the reconfiguration of global investment and trading systems promotes social and global good.”