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Ladies and gentlemen,
Alongside my ministerial colleagues, Stephen Smith and Simon Crean, I’m pleased to be part of the Australia-China Business Council’s annual Canberra Networking Day.
To those of you who came from interstate, a special welcome to our national capital.
As Minister for Tourism, I invite you to make the most of your stay in Canberra.
Some of Australia’s finest galleries, exhibitions and restaurants sit alongside our national institutions of government.
Resources are the backbone of Australia’s trading relationship with China.
Australia is committed to strengthening that relationship and being an important partner in our region’s economic growth.
Australia-China trade
China is now our largest two-way trading partner.
Trade in two-way goods and services with China amounted to $83 billion last financial year.
One-third of Australia’s mineral exports go to China.
Mineral and energy exports account for three-quarters of our merchandise exports to China, worth more than $33 billion last financial year.
Australia’s trading relationship with China is healthy and mutually beneficial.
While there is no hiding from the fact that the relationship between China and Australia over the last two years has faced some difficulties, I believe we have both learnt a lot over that time.
Importantly, I believe we are both committed to finding a mutually satisfactory way forward in the resources relationship.
And the truth is we are having more successes than failures.
In 2008-09, more than $26 billion of Chinese investment was approved in the Australian resources sector.
Earlier this year, I had the pleasure of speaking at a ceremony formalising the merger between Yanzhou Coal Mining Limited and Felix Resources.
This $3.5 billion acquisition represents one of the top 10 mergers and acquisitions undertaken in Australia in 2009 and represents a good deal for both Australia and China.
It is a deal that moves beyond the strict producer/ consumer relationship and involves technology and expertise exchange.
Just as the Japan-Australia trade and investment relationship matured and grew into a lasting friendship over the last 50 years, so will the China-Australia relationship.
Our aim is to be the region’s premier supplier of minerals and energy resources and of related services.
Already, Australia is the world’s largest exporter of iron ore.
Last financial year, China was Australia’s most significant iron ore export destination, taking two-thirds of Australian iron ore exports by value.
- Australia provided 240 million tonnes, or close to two-thirds, of China's total iron ore imports.
Overall, we are the world’s largest exporter of coal, one of the largest uranium exporters, and fifth for LNG.
So business is good and set to get better.
LNG
Today, I want to single out gas as a particular opportunity for growth.
In the space of two years, the value of Australia’s LNG exports has grown by 72 per cent.
While global price declines will see a drop in export value in this financial year, volumes will continue to increase.
China is already Australia’s second-largest trading partner for LNG.
I was very pleased to see ExxonMobil last August sign a sales and purchase agreement with PetroChina to supply 2.25 million tons per annum of LNG from Gorgon for 20 years.
The China National Offshore Oil Corporation last May signed a Heads of Agreement for the supply of 3.6 million tonnes per annum of LNG for a period of 20 years from BG Group's Queensland Curtis LNG Project, another very positive announcement.
I hope that in the coming years, we will see many more such announcements as deals are finalised in relation to Australian LNG projects such as Browse, Gorgon, Inpex, and the coal seam methane-based projects under development in Queensland.
Just as we are investing in new LNG production, China is rapidly expanding its LNG receiving capacity to cope with growing demand for cleaner energy.
Currently it has three operating LNG receival terminals.
Petrochina and CNOOC have four more under construction and there are at least another eight terminals being planned.
I hope that Australian LNG is the predominant source of supply for these new market opportunities.
China is not alone in seeking cleaner-burning fossil fuels.
Global demand for LNG is forecast to double by 2030.
Renewable energy and CCS
Sustainable development is front-and-centre of my vision for energy security in the Asia Pacific region.
Innovative, efficient technology must guide our approach to energy security – improving the quality of our water and air.
Australian and Chinese companies are working together on wind, solar and geothermal energy projects.
The Australian Government’s $4.5 billion Clean Energy Initiative has been designed to help drive down the costs associated with clean energy technologies.
At the same time, we cannot ignore the reality that fossil fuels will continue to do much of the heavy lifting for the region’s energy security.
That’s why carbon capture and storage technology is vital.
The potential of CCS is something many nations are seeking to fully and properly investigate – right now – with or without common targets of the kind that Copenhagen set out to achieve because:
- The component technologies are available
- It gives governments another option for energy security – cleaner burning fuels
- For countries rich in fossil fuels, it strengthens confidence that low-carbon technology won’t compromise jobs or exports
According to the International Energy Agency, demand for coal has been growing faster than any other energy source.
Coal is projected to account for more than one-third of incremental global energy demand to 2030.
A prosperous transition to a low-carbon economy is better than building one from scratch, and cleaner fossil fuels are valuable assets in that transition.
China is a foundation member of the Global CCS Institute and our governments are working closely on geological storage of CO2.
Australia and China are engaging with other nations in the Asia Pacific Partnership for Clean Development and Climate.
This partnership is tasked with finding cleaner fossil energy and low-carbon technology, and distributing it as widely as possible.
At the same time, we set up the Australia-China Joint Coordination Group on Clean Coal Technology, making it easier for low-carbon expertise to be transferred between our two countries.
It is through the work of this Group that a pilot of carbon capture and storage technology at a coal-fired power station in Beijing was established.
The Prime Minister Kevin Rudd has committed $20 million to the Joint Coordination Group and we are working with our counterparts in China to identify more projects to take this important initiative forward.
Tourism
Services trade between China and Australia was valued at over $6.5 billion last financial year.
Education related travel to Australia by Chinese nationals is our strongest services tourism export for that market worth around $1.3 billion, followed by leisure travel worth $1billion.
China was Australia’s fourth-largest inbound market in 2009 for visitors and is expected to continue to grow.
Air capacity between Australia and China has doubled over the last 10 years.
Looking ahead, we expect annual arrivals from China to increase to more than three-quarters of a million in 2018.
Australia was one of the first nations to receive Approved Destination Status from China facilitating group leisure travel from China to Australia. This program is now in its 11th year and China regards Australia as a model partner in the scheme.
The Scheme is a bilateral arrangement between the Chinese and Australian governments and enables Australia to host Chinese tourists undertaking group leisure travel in Australia.
We ensure our Chinese guests are protected from unethical business practices and enjoy a high quality experience in Australia.
Tourism is a key focus of Australia’s pavilion at the Shanghai World Expo.
It was a great honour for Australia when President Hu visited the pavilion in January.
Expos forge stronger trade links, and President Hu caught a glimpse of what millions of people will see when the Expo opens later this year.
With positive signs for global economic recovery, Australia is determined to make the most of the expected upturn in business travel.
That’s why I recently announced a $1.8 million partnership targeting the associations sector.
This partnership involves Tourism Australia working with the Association of Australian Convention Bureaux to strengthen our capacity to host events.
This is a lucrative market, with professionals from across the region coming together to share expertise.
Tourism Australia’s largest pitch for business events is happening in Beijing right now, bringing Australian sellers together with Asian corporate buyers.
Australia is a world-class destination for business events – we have the facilities, the people and the great restaurants and settings that make conferences memorable.
Conclusion
Ladies and gentlemen, Australians are traders.
Asia’s developing economies are expected to make up 50 per cent of future global growth between now and 2014 according to the IMF’s economic outlook.
Australia is on the doorstep of that growth.
We are a dependable supplier of resources, a world-class partner for trade and investment, and a great place to visit.
I invite business leaders from both our countries to take full advantage of the growing opportunities on offer.