-- CHECK AGAINST DELIVERY --
My apologies for not being there in person today.
It almost goes without saying that you are meeting in the heart of Australia's world class financial services sector.
Many of Australia's biggest banks, investment funds and superannuation funds are headquartered in Sydney.
Sydney is also home to the ASX, our regulators, and to many of our best and brightest financial minds.
So I apologise again that I can't be there.
In many ways I think the fact that I am speaking with you from Beijing highlights our connections as a region, despite the vast distances we are apart.
It is this – the power of our connections – which I want to talk to you about today.
The Asia-Pacific is a diverse place.
That over 16 countries are represented at the Symposium is a testament to that fact.
We are region which is diverse historically, culturally, linguistically – yet we are all connected.
Australia's friendship with China bears this out.
It was 1971 when Gough Whitlam had the vision, and the sense of history, to send a message to Chinese Premier Zhou Enlai [Z-hoe En-lie] suggesting they meet to discuss 'matters of mutual concern.'
Whitlam, then Opposition leader, was panned by his critics and provoked fascination from international observers with his historic reaching out to China.
It is a matter of historical fact that Whitlam made the right call – and indeed that his public trip coincided with clandestine meetings between Henry Kissinger and the Chinese government showed that Whitlam was a leader truly ahead of his time.
During those few weeks in July 1971, a few days before Whitlam's birthday, a connection was made.
Tom Burns, the then President of the ALP and a member of the 1971 delegation, recalled in 2006 that it was close to midnight when Whitlam and the attendant press pack was summoned to the Great Hall of the People.
There the two men sat.
Prime Minister Whitlam – the erudite Sydney barrister – youthful and supremely self-assured.
Premier Zhou – the suave bureaucrat raised on classical Chinese literature – toured the international horizon with Whitlam, who by all accounts acquitted himself well.
As Burns recalls, after three hours of conversation Premier Zhou corrected his interpreter in perfect English, with a smile.
The two spent the next half hour talking in English about Greek mythology, their travels in France…
…"matters of mutual concern" indeed.
Save for the gold spittoons and endless packs of Panda brand cigarettes, the Great Hall of the People – with its mammoth wooden doors, huge gold columns and romantic landscape murals – had stood largely unchanged since that first meeting between China and Australia.
But our friendship, and our connection, has gone from strength to strength, to the benefit of both our countries.
I participated in historic discussions between Prime Minister Gillard and Premier Li last night and I can assure you both leaders of our great nations are firmly focussed on financial services, and indeed it was one of the first issues which they discussed.
Benefits of increased connections
Friends, there are many benefits of strengthening our financial connections as a region.
As the fasted growing region of the world, the Asia-Pacific has much to gain from banding together.
As a region, we have already taken steps to shock-proof our markets.
The actions taken following the 1997 Asian Financial Crisis are an example of this.
The crisis spurred policymakers to develop new regional arrangements to help address the region's vulnerabilities to external shocks.
This resulted in a number of initiatives aimed at developing the region's bond markets, such as the Asia Bond Market Initiative and the Asian Bond Fund Initiatives.
Further examples of financial cooperation in East Asia include the Chiang Mai Initiative and the ASEAN+3 Macroeconomic Regional Office.
These both show how we are determined to build a strong regional financial architecture critical for crisis prevention, management and resolution in the region.
This generation of reforms has undoubtedly brought Asian markets closer together.
The need to invest in the region
But the fact is too much capital in the Asia-Pacific is leaving the region seeking investment elsewhere.
A 2010 McKinsey Global Institute report has projected that by 2020, global investment demand could reach levels not seen since the post-war rebuilding of Europe and Japan, being driven by demand in emerging markets.
Nevertheless, most investors still prefer to invest outside the region, creating a critical gap.
In 2011, only 22.1 per cent of the Asia-Pacific region's cross‑border assets were held in Asian equities, with a mere 9.4 per cent in debt securities.
Too much Asian capital is leaving the region.
This is a trend which needs reversing.
Because it's not like there aren't productive investments to be made in Asia.
Take infrastructure for example, which is essential for lowering barriers for trade, raising productivity, and generating jobs throughout the region.
It's particularly striking speaking to you from China, where massive infrastructure in investment has gone hand in glove with economic growth.
To illustrate this, between 1998 and 2006, investment in infrastructure in China grew from 5.7 per cent of China's GDP to 14.4 per cent of GDP.
Moreover, the Asian Development Bank has estimated that almost $8 trillion is needed for infrastructure investment in the region through to 2020.
So while the focus of this forum is about financial markets, we must never forget that the function of financial markets is ultimately to support real economic activity.
Activity which supports jobs and growth, lifts peoples' standard of living, leaves the world a better place for our children and grandchildren than the one we inherited.
Bettering our connections
I can report the Australian Government is taking steps to further strengthen the connections in our region.
The Government has taken up the challenge of cementing Australia as a regional financial centre.
We have committed to establish the Investment Manager Regime, which establishes a framework for global investors to utilise the talents of Australia's financial sector professionals.
Late last week I released a draft of legislation that we hope to pass by 30 June this year finalise this important reform.
We have undertaken a number of reforms to broaden and deepen our financial markets in Australia, making them an even more attractive place for global investors.
We have taken steps to create a deep and liquid corporate bond market in Australia.
The Government has passed legislation to enable the retail trading of Commonwealth Government Securities.
Trading is expected to commence in the first half of this year.
We have also introduced legislation into the Australian Parliament that will further encourage the development of Australia's corporate bond market, through the reduction of red tape on the issuance of simple corporate bonds.
And whilst in China the Prime Minister has announced Australia's will be the third major currency in the world to be directly convertible with the Chinese Renminbi, after the US dollar and the Japanese Yen.
As a Government, we are also eager to progress the idea of an Asian Region Funds Passport.
Because we believe that the whole region would benefit from a more streamlined, efficient and uniform licensing regime.
This makes us more attractive to foreign capital…
…and allows funds to market products across the region.
The Australian Government believes this is an idea with merit, and we have taken the lead in working in the Asia-Pacific region to develop a pilot model for the Passport.
As a Government, we remain committed to promoting Australia as a financial services hub with a strong, dynamic financial services sector and competitive markets, and promoting the growth of the Asia-Pacific as a great place to do business.
I am pleased to announce today that Financial and Energy Exchange Global Pty Ltd Financial Market (FEX) has been granted an Australian market licence to establish a market for energy, commodity and environmental derivatives.
The establishment of the FEX market expands the range of options for participants in Australia's financial markets.
I can also announce the Government has granted LCH.Clearnet Limited (LCH) an Australian Clearing and Settlement facility licence to clear and settle contracts traded on the FEX market.
The licence will also be the first non-ASX clearing licence in Australia in relation to a significant market.
By encouraging competition we are promoting Australia as a financial services centre and helping ensure our financial markets are efficient and innovative.
The decision will provide a trading venue to trade specialised derivative products, and provide a greater service offering to the market. This will benefit participants, investors and the Australian market more broadly.
I believe we are all optimistic about our nations and our region.
And I believe we all share the belief that as a region we have much to gain from building connections and growing the financial services sector which we all have a stake in.
I believe there is a need to develop regional financial architecture to assist us with our global challenges in areas like health, infrastructure and the common challenge of our ageing populations.
It is this sense of purpose which I hope guides this Symposium over the coming days.
I thank you.