Tomorrow, I will be honoured to meet His Excellency, Mr Li Ke Qiang, Vice Premier, the State Council, in the Great Hall of the People. Today, I will attend meetings with Mr Xie Xu Ren, Minister of Finance, Mr Liu Ming Kang, Chairman China Banking Regulatory Commission (CBRC), and Mr Zhang Ping, Chairman National Development and Reform Commission (NDRC).
The importance of China and its economic growth to Australia and to the world has never been greater. Over the past 25 years, the Chinese economy has grown at an annual average rate of around 10 per cent in real terms, and over the past decade it has accounted for around 20 per cent of global growth.
China is now our largest trading partner and second largest export destination after Japan. Australian businesses are also vigorously pursuing trade opportunities with China and FTA negotiations are under way.
China and Australia are increasingly developing an already close relationship, based on a strong foundation of economic, social and cultural linkages.
I am pleased to announce that following my meeting with the CBRC, Australia will become an approved investment destination under the Qualified Domestic Institutional Investor (QDII) scheme. This will enable investment in Australia by entities regulated by the CBRC.
Recognition of Australia under the QDII scheme, as administered by the CBRC, will create new opportunities for Australia's fund management industry to provide their services to Chinese investors seeking Australian investment opportunities. This initiative will also add liquidity to the Australian capital market and open the way for broader investment choices for Chinese investors.
This outcome will be warmly welcomed by the Australian fund management industry and was recently highlighted as key priority for this trip by my Financial Sector Advisory Council.
The increased inward Chinese investment into Australia will further strengthen and deepen the already growing and important financial and economic relationship between Australia and China. Today's announcement further demonstrates the quality of Australia as an investment destination and also demonstrates our nation's quality regulatory framework for financial services.
I will also be discussing strengthening institutional linkages between the Treasury and NDRC. I would like to encourage regular dialogue between senior officials from the Treasury and NDRC to share experiences on economic reform in our respective countries and policy approaches in dealing with current and long term economic issues. Such an arrangement would reflect the roles of both the Treasury and the NDRC as economic policy advisers in each of our countries.
I would like to encourage China to continue its program of financial sector liberalisation and reform, noting the importance of appropriately sequenced and broad-based reform. Australia has undergone significant financial sector deregulation and reform, and I would be pleased to offer our experience and support in this area.
The strengthening of our partnership on climate change has been elevated with our regular dialogue moving to ministerial level. Australia looks forward to working with China at upcoming UNFCCC meetings.
10 June 2008