The Australian: Business leaders say Australia lagging behind in China

 Michael Sainsbury, The Australian September 30, 2011

AUSTRALIAN business leaders in China have criticised the government's planned white paper on Asia as overdue, and say Australia is increasingly being beaten to business in China by other nations.

Julia Gillard this week named former Treasury secretary Ken Henry to write a white paper on Australia in the Asian Century, but businesses in China have reacted warily to the move.

"We've had no serious public debate around Australia's engagement with Asia for a number of years," Australian Chamber of Commerce Beijing chairman David Olsson said.

"Kevin Rudd's election as PM in 2007 reignited enthusiasm for China, but there has been no serious attempt at a senior political level to bring the Australian people along on a journey to better understand how Australia can position itself to take advantage of the massive structural changes that are taking place in a region where Australia is right in the middle. Both sides of parliament have danced around key foreign policy issues," he said.

"The PM missed an opportunity to talk with Australians on the ground in China when she came to Beijing in May of this year. We have a strong platform to work from, but we must not squander the opportunity to build on it.

"The new foundations that are needed have to be underpinned by strong political leadership -- we need leaders that can articulate policies that will drive our future engagement with Asia, and especially China."

Mr Olsson said that key issues that needed to be dealt with were investments by Chinese state entities and wealth funds; bringing the long-running Free Trade Agreement negotiations to a conclusion; how Australia positioned itself in response to emerging food security issues facing China and other nations; and a response to the emerging political influence and military power of China.

"These policies need to be built on the strong economic ties and mutual dependencies, and underpin the development of a relationship with China that is more sophisticated and enduring," Mr Olsson said.

"Understanding and accommodating the new reality of China's emergence is likely to be the most important task for the next quarter century and beyond."

While consultancy Dezan Shira, which is member of the Australian Chamber of Commerce Shanghai, welcomed the white paper, it said the government needed to create policies to encourage small and medium Australian businesses.

"Dramatic changes in the purchasing power of the respective middle classes of both countries mean a presence in these markets can't be ignored," Dezan Shira director Richard Cant, an Australian lawyer, said.

"The Americans, Europeans and the rest of the world are flocking to participate in these new markets. The Australian presence is badly lagging behind."

The criticism echoes comments made by Australia's former ambassador Geoff Raby, who stepped down in August but stayed on in Beijing as a business consultant.

"There reality is that the rest of the world is rushing to China. We were once very well placed in China but we haven't kept up with what the rest of the world is doing," Dr Raby said ahead of the announcement of the white paper.

Mr Cant said Australian SMEs were missing the boat when it came to investing in China and India.