Australia aims to lift Asia trade to one third of GDP by 2025
Australia unveiled a long-term plan to boost trade with a booming Asia on Sunday, aiming to lift Asian input into its economy to one third by 2025 from 25 percent now, via more business with China and India in particular. By James Grubel.
Releasing a new policy document, 'Australia in the Asian Century', Prime Minister Julia Gillard said Australia was well placed to benefit from the economic rise of China and India, and to boost trade and investment with the broader region. "Whatever else this century brings, it will bring Asia's return to global leadership, Asia's rise. This is not only unstoppable, it is gathering pace," Gillard said.
The plan has few specific policy announcements, but targets Asian tourism and greater expected demand for food and education to match Asia's appetite for mineral resources that has fuelled a long mining boom in Australia. It also targets more Asian investment into Australia and lower trade barriers, although does not recommend changing Australia's foreign investment rules, which include intense scrutiny of planned investments from overseas state-owned firms.
Australia is a member of the 21-member Asia Pacific Economic Cooperation (APEC) group, and is one of the 11 nations involved in negotiations for a Trans-Pacific Partnership (TPP), both of which aim to liberalise regional trade. Since the early 1970s, when Australia set up formal diplomatic relations with China, and Japan cemented its role as Australia's top trading partner, Australia has regularly tried to deepen its Asian ties to cash in on regional economic growth.
Since then, China has become Australia's top trading partner, ahead of Japan, the United States and South Korea. The policy document targets stronger trade and bilateral links with neighbouring Indonesia, and with a booming India, where Gillard visited earlier this month.
Australia will be able to balance its defence and security ties to the United States with supporting China's military growth and stronger role in the region, the document said, adding that any policy aimed at containing China would not work.
The United Sates is Australia's closest military ally and a deal to allow the U.S. to rotate marines through northern Australia, under the U.S. "pivot" to the Asia-Pacific region, has met with suspicion in Beijing and Jakarta.
"We accept China's military growth is a natural, legitimate outcome of its growing economy and broadening interests," the policy document said. "It is important that China and others in the region explain to their neighbours the pace and scope of their military modernisation, to build confidence and trust."
Australia is reviewing its defence and strategic outlook and will release its new long-term military outlook in mid-2013. The 'Asian Century' policy also aims to ensure that by 2025, one in three board members of Australia's top 200 companies will have a deep knowledge of Asia, while all school children will have the chance to learn an Asian language. DM
Photo: Remotely controlled tipper trucks operate at a Rio Tinto iron ore mine in Western Australia in this undated handout picture made available March 26, 2012. REUTERS/Rio Tinto