The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

11 July 2012

Doorstop interview

Hong Kong

SUBJECTS: Internationalisation of the RMB, Gough Whitlam's 96th Birthday, 40 years of Bilateral Relations between Australia and China, The Asian Century, ASIC, G20 Leaders' Summit in Brisbane.

Treasurer:

I'm delighted to be here in Hong Kong. I'm delighted to be here at this forum for a discussion about the internationalisation of the RMB and how we can deepen our links - both financial and economic. Not just with Hong Kong but with China more broadly.

In terms of our engagement with the currency, I'm delighted about the progress that we've already made so far. We have a direct swap between the People's Bank and the Reserve Bank – that was announced in March this year. At the end of last year there was convertibility onshore announced in terms of the US dollar through to the RMB from the Australian dollar, so that was very substantial progress. I'm delighted today to announce a continuing dialogue with the business community and the Hong Kong authorities and Australian Government and Reserve Bank and Treasury on this matter.

I'm also delighted to be in China because this is the 40th anniversary of the establishment of diplomatic relations with China. I'm going on to Beijing to meet with senior officials, with the Vice Premier, the head of the NDRC [National Development and Reform Commission], the head of the People's Bank to have further discussions about how we further strengthen our economic and broader relationships.

I meet senior Chinese officials through the G20 and we talk a lot, but I'm delighted to be here particularly on the 40th anniversary of diplomatic relations because it was a far-sighted Labor Prime Minister by the name of Gough Whitlam who took the decision to establish diplomatic relations with China forty years ago. I'm pleased to say that today is his 96th birthday. I think he will be very proud that this milestone has been reached given the strength of the economic relationship there is between Australia and China. Because in the past forty years, trade between Australia and China has increased 1000 fold. But it's just not trade. It's also the people, the people linkages and relationships. Something like 500,000 Chinese tourists come to Australia every year and in excess 300,000 Australian tourists go to China every year. That says something very special about the nature of the people, the people relationships, but of course they are far broader than that. So I'm delighted to be here in Hong Kong but more broadly delighted to be here to celebrate this important milestone in our relationship. And really to pay tribute to all of the far-sighted leaders that took that very important decision forty years ago.

Journalist:

(inaudible)

Treasurer:

No, not to my knowledge. I think we've come a long way in recent times. I was here last August you might recall I came to Hong Kong and had a talk to the Finance Secretary. You saw action in November where we could engage convertibilities via the US dollar for onshore transactions, that was announced then. Then of course we had the swap announced between the People's Bank and the Reserve Bank of Australia in March this year. And I'm back here again having further discussions. We have pursued these issues and other issues vigorously.

Journalist:

I was wondering if you could offer some clarity (inaudible)

Treasurer:

What I can say is what I've just said in my speech inside. We're establishing this dialogue which involves not only the Government here in Hong Kong but also in Australia, but also the People's Bank, the Reserve Bank of Australia and the business community to work on the broader issues, just not convertibility, but the broader issues in the financial and economic relationship. I think you can see by the turn out here today that there's a lot of interest in the business community about these matters. I've been very encouraged by the turn out today.

Journalist:

(inaudible)

Treasurer:

No I don't expect it will have an impact on the trade relationship whatsoever.

Journalist:

As you head to Beijing, what are the indications that you're getting from Beijing officials that Australia is going to become the third country to be allowed to directly convert the yuan after Japan and the US?

Treasurer:

I'm here for discussions about those matters today and I'll have further discussions in Beijing. But can I just say, we've come a long way on this issue since I was here last August. We'll continue our conversation about it. We've already taken some very important steps in that direction.

Journalist:

Do you think an announcement on that could be imminent?

Treasurer:

No.

Journalist:

Are you worried about China's economic (inaudible)

Treasurer:

I think China is enormously important, not just to the regional economy but to the global economy. As I said inside earlier, we're here at the epicentre of global growth. We are going to see in Europe, over a long period of time, a long and painful adjustment. Europe is currently, in some countries, in recession. What's going to happen in the 21st century, which is the Asian Century is increasingly a greater percentage of global growth is going to come from the Asian Pacific. It won't just be China. It'll be the rest of the region as well. Countries like South Korea, Indonesia, Malaysia, India and so on.

So that's why we hear people talk about the Asian Century. The Asian Century is one in which the region will supply a greater proportion of global growth. China is such an important part of all of that. As you'd be aware the Chinese authorities have put in place via their five year plan, plans to reform the economy, so they can continue to grow sustainably and to lift more people out of poverty. Part of the reason of being here is to pay tribute to the great success of the Chinese people and Chinese policy makers over the past forty years to have presided over such strong economic growth, which has lifted so many people out of poverty. To reflect on why that is the case and what we need to do in the region, or in the next forty years; the Australian Government has decided to produce an Asian Century White Paper to inform our policy makers about what we must do in the future. Not just to maximise the opportunities from economic growth for Australia, but what we can do to contribute to growth to the region as a whole so that it continues to grow in a way which makes more people prosperous and in a way in which we all lift together in the region with a growing economy and lift people out of poverty.

Journalist:

(inaudible)

Treasurer:

There is strong inward investment in Australia from China. I think after the United States and the UK, Chinese direct investment in Australia comes in at number three over the past three years. So we've seen a lot of Chinese investment in Australia, principally in the resource sector over the last few years. That investment has been welcomed.

Journalist:

(inaudible)

Treasurer:

The Government's White Paper is not going to be a laundry list of policy initiatives. It's going to be about how we make policy and engage in the Asian Century more broadly about our relationships in the region. Not just about the pure economy or economic growth, it's about how we grow together in the region. It's such a fantastic opportunity for everybody who is fortunate enough to live in our region in the years ahead. What the Australian Government is interested in is how we make sure we continue to not only do business together, but lift together. And the White Paper will have emphasis on people to people contact; so it won't just be about pure economic policy. It'll be about how we engage as people. I cited the figure before of 500,000 Chinese tourists a year coming to Australia; a phenomenal increase in recent years. But also a very big increase in Australian tourists coming to China. That's a good thing because what it does is over time, it makes our people grow closer together and it promotes understanding.

Journalist:

Mr Swan on ASIC in Australia, Greg Medcraft has come and said there should be reform of the takeover provisions, do you agree with that?

Treasurer:

I'll have a look at what Mr Medcraft has had to say. I'm sure if he's got a view about it he'll convey it to the Government. And if there are policy implications that flow from that view that the Government will take those decisions in the appropriate way.

Journalist:

Do you agree however though that people or individuals (inaudible)?

Treasurer:

I'll take the advice from the regulator direct. If he's concerned about these issues and he's got issues he wants to raise with the Government, the Government will consider them in a methodical and logical way. We haven't got to that point yet.

Journalist:

One more thing Treasurer, can you tell us how important it is to have the G20 in Brisbane. And also will it not be perhaps Joe Hockey's show, rather than your own?

Treasurer:

It won't be anyone else's show, it won't belong to any individual. What it will belong to is not just Australia but to the people of the G20. The great genius of the G20 is that for the first time in our economic history, globally, we have sitting at the table via the G20 not just the big developed economies, but the developing economies as well.

So for the last four or five years since the end of 2008 when we had the first G20 leaders meeting, the leaders of China and Indonesia and South Korea, for the first time in our history got to sit at the same table with all of the developed world. That's the significance of the G20. Australia is proud to host the G20 and we'd proudly host it in any city. But I'm a Queenslander through and through and I'm especially proud that it will be hosted in my home city of Brisbane. I think in many ways Brisbane and Queensland and particular our economy, represent a snap-shot of what has happened in the Australian economy over the last forty years. The growth in South- East Queensland as I said to your Party Secretary from Guangdong a couple of weeks ago, the growth in South-East Queensland has not been dissimilar in some ways in terms of its speed and wealth creation to the growth in China. A remarkable transformation has occurred in the Australian economy in the past forty years, just as it has in the Chinese economy in the last forty years