Hainan Island, People's Republic of China
PM: It is good to be here in the home of the Bo'ao Forum, and to have started my program today.
I am joined here by Minister Emerson, and during the course of the morning I have also been accompanied by the Foreign Minister, by Senator Carr.
We commenced the day by meeting with Secretary-General Zhou, Secretary-General of this forum.
We thanked him for the excellent arrangements and we reflected on former Prime Minster Bob Hawke's pivotal role in establishing this forum.
I then had the opportunity with Minister Emerson and with Minister Carr to meet with Christine Lagarde, the Head of the IMF.
We had a good discussion about circumstances in the global economy, particularly the continuing recession in Europe and the work that she and the IMF had to do in relation to the crisis in Cyprus.
We reflected on that work and what more needs to be done in Europe, but we also noted other signs in the global economy, particularly some signs of strengthening in the US economy, and the fact that the IMF has lifted its outlook for China, and has a very positive outlook for growth in the Asian economies.
This means of course that as we have spoken in Australia about the economic opportunities of the age in which we live, the IMF is verifying that we live in the growing region of the world with economic opportunities which mean prosperity for Australians.
Put simply, the economic opportunities of the region in which we live mean Australian jobs.
During the course of today I will have the opportunity to meet with Mr Forrest, ‘Twiggy' Forrest, and to meet with the business leaders that he has brought together as part of his initiative to encourage high level exchanges between Australia and China.
Mr Forrest is working to deepen understanding between the business communities of our two nations, and I, Dr Emerson and Senator Carr will have the opportunity to participate in some of those discussions.
I will during the cause of the day meet again with my counterpart Prime Minister Key of New Zealand.
We meet frequently as is appropriate in a relationship of such closeness as our relationship with New Zealand.
And I will then have the opportunity later today to meet the new President of Mexico, Peña Nieto, newly elected President of Mexico.
I have obviously in the past dealt with his predecessor former President Calderon and this will be my first opportunity to meet the new President.
Dr Emerson and I, apart from participating in this busy program, are also today announcing the opening of the guidelines for our AsiaBound program.
People may recall that when we announced the Australia in the Asian Century White Paper, we put a particular focus on ensuring that Australians got the opportunity to study with Asia.
To do an internship or a section of their course in Asia to form all of the links that come with people studying abroad, the friendships, the understanding of the other nation, to in that sense become an ongoing ambassador for Australia for the growth and change that we are living through in this Asian century.
This AsiaBound program is a $37 million new program, announced at the time of the white paper, and it is to support 3,500 extra Australian students to study in Asia.
We are today announcing that the guidelines are there for universities to start selecting the students who will participate in this special program.
Of course, as a nation we continue to support people from Asia coming to study in Australia.
It is one of the best ways of strengthening contact between nations of our region and Australia.
There is much said about the former Colombo Plan, which in its age was an important initiative to build bridges between the people of Asia and Australia.
But what we do today dwarfs in size and scale the work that was done under the Colombo Plan.
Under the Colombo Plan 20,000 people had the opportunity to study in Australia over 35 years.
Under the program we operate today 20,000 people from around the world will have the opportunity to study in Australia in five years and 12,000 of those will be from our region in the world.
Why do we do all of this? Well there is nothing more important to the ongoing friendships between countries than the people to people links, the depth of understanding and there is no better way to do that than to see an exchange for portions of people's study.
MINISTER EMERSON: Thanks Julia. The best investment governments can make is in the talents of their young people.
That's what the Gillard government is doing, investing in the talents of our young people, as set out in the white paper on Australia in the Asian Century.
We want to ensure more Australian students study in Asia and more students from the region study in Australia, thereby creating not just two ambassadors, an ambassador of China to Australia and an ambassador of Australia to China, but literally thousands of ambassadors because almost universally the experience is a great one and these young people then go back to their home countries and become ambassadors to the other country.
We're very proud to announce that from today applications are open, the guidelines have been issued from 1 July, under this new AsiaBound program, young people will be able to travel under the program from Australia to Asia, to do short courses, to do semester courses, even two semester courses and therefore share in the cultural experience that is available here in China and other parts of the region and similarly through our Australia Awards Asian century scholarships we will have over the next five years, 12,000 people from the Asian region studying in Australia under those scholarships.
The assistance depends on the nature of the course but we will ensure that there are those financial incentives for people to study here in the region.
In addition, in addition to that through AusHelp we will be offering AusHelp assistance of 7,500 dollars for students who want to study here in China and other parts of the region.
That's not of itself part of the AsiaBound program but it is very much linked to it.
These are the sorts of initiatives that we foreshadowed in the white paper on Australia in the Asian Century that we are delivering as we said we would.
JOURNALIST: Prime Minster, Andrew Forrest said today that Australia needs to lift its game in terms of its relationship with China; we've taken the relationship for granted. Do you agree?
PM: We work every day to strengthen our relationship with China. That's what we've done as a Government, and that's what I'm here doing, attending not only this Forum, but taking the opportunity which we have created for me to be here so soon after the election of the new leadership of China and to be in a position to meet that new leadership.
JOURNALIST: On North Korea, some of the European countries have received direct communication saying leave Pyongyang. Has Australia received any communications from the North Korean regime and what's your latest sort of briefing on the situation?
PM: My understanding is that North Korea has conveyed to people who have embassies in North Korea that they should consider evacuation.
We do not have an embassy in North Korea so that is the subject of media reporting, that this message is being conveyed by North Korea to people who have embassies there.
I would see that as another statement, which is about trying to exacerbate tensions in the region.
JOURNALIST: Do you feel any more optimistic or less optimistic today than yesterday about the situation there?
PM: I think the situation is unchanged. What we have seen is a continuing set of provocative statements from North Korea designed to cause tension, cause concern in the region.
That is what North Korea has been about, that is what North Korea has been doing.
This conduct is unacceptable, and we condemn it and condemn it absolutely.
It has been enlivened discussions at the Security Council leading to sanctions as is appropriate and as I indicated yesterday, we support those sanctions. We have autonomous sanctions as well.
We welcome the fact that nations including China supported those sanctions and it's now for each of us to use whatever pressure we can on North Korea to cut out this conduct, to see North Korea return to the Six Party Talks in a meaningful way and also to take the opportunity that the President of South Korea has outlined for trust building dialogue.
JOURNALIST: Prime Minister, you're here at a business forum to try and promote greater links between Australia and China in the business world, but the reality on the ground here is that there's at least three Australian business people who have been jailed in China for offences that most people believe are fairly spurious.
Isn't it time that, or do you believe it's time that the issue around safety and security and also the protection of property rights for Australians doing business in China is elevated beyond a consular matter, and is that something you'll raise as more than a consular matter?
PM: Well I will say a few things and then I'll go to Dr Emerson. There are huge opportunities for Australian businesses here in China and that fact that you're seeing such high-level attendance from the Australian business community here at this forum, and I will have the opportunity when I am in Beijing to see yet again leading Australian business identities there, speaks to the nature of the opportunity.
But there are also risks. This is a complex environment for people to work in and we believe that it is very necessary for people to understand that degree of complexity.
And if I can go to Dr Emerson now he will be able to speak about that.
MINISTER EMERSON: Your question pre-empts an announcement that I was going to make a little bit later in the week and that is that the Australian Government will be releasing a program for potential investors and traders for doing business in China.
And it is designed to alert people to the processes that they need to follow in terms of doing investment in China, potential risks of doing that, of course the rewards speak for themselves, and ways of mitigating that risk.
So we are aware of the issues that you raised but importantly we're responding to those issues.
JOURNALIST: But it's more than process, it's about whether or not the Government sees it as a sufficiently important issue to elevate it beyond a consular matter.
MINISTER EMERSON: Well we are elevating it in the sense that we have developed with a lot of thought and care and experience a program that we will make available to anyone who's considering trading with and investing in China so that not only the undoubted rewards are explained to people but also the risks.
In every country there are risks in doing business and what we're doing is simply explaining to the people who are interested in investing in China ways of mitigating those risks.
JOURNALIST: Are you saying the risks in China are greater than other places in the region?
MINISTER EMERSON: No, I'm not saying that at all. I'm saying a most obvious point that in any country there are risks in doing business.
That's why people seek returns to compensate for those risks. It's just a natural matter of reality that whatever the country; there are risks of doing business.
JOURNALIST: So you're not talking about the rule of law in China? There's lots of people in China that are concerned that the progress towards the rule of law has not happened in the last few years and if anything it might be going backwards.
MINISTER EMERSON: I think the way to answer that question is to reflect on the increase in Australian presence in China.
That Australians are increasingly interested in investing in China.
If you look at the relationship going back to 1990 it was close to zero. Now we have an incredible diversity of businesses that are seeking to do business in and with China.
Back then, when that all started, it was fundamentally based on resources and energy.
That's still a very large component but through the White Paper on Australia in the Asian Century, we are promoting the diversification of that relationship all through the service industries where we do have very great strengths, in manufacturing including in food processing to produce premium agricultural products and process them in Australia and in a whole diversity of business opportunities here in China, as set out in the white paper.
As I've indicated in any environment, in any environment, there are risks of doing business but we can play a role in mitigating those risks.
JOURNALIST: On a domestic issue, Tony Abbott said that with the assorted changes to the super tax arrangements yesterday he thought of what was happening in Cyprus. Can I get your response to that?
PM: Well this just shows how Mr Abbott is unfit on economic matters.
This is a crazy statement that no person of reason could make.
Anybody who is a person of reason, anybody who understands the circumstances in the global economy, anybody who cares about Australian jobs and our economic future could not make such a ridiculous statement.
These are dangerous words to play with.
We all know from the circumstances in Cyprus, I've obviously had the opportunity to speak to Ms Lagarde about it today, but even before coming here and speaking to Ms Lagarde it was clear to anybody who could read the media either domestic or international that the circumstances in Cyprus were very dangerous ones, for the banking system and for the people of Cyprus.
I get to mix with a number of Australians who are actually of Cypriut heritage and they were very worried about the circumstances for their families and what it meant for them and their lives and their future.
A genuine moment of economic crisis, and to toy with that as if it is a political slogan is a grossly unacceptable thing to do.
JOURNALIST: Prime Minister, there's a feeling from the conference today particularly from Twiggy Forrest that Australia isn't doing enough to really support its relationship with China, so in that frame, is the Asian Century White Paper, is that a catch up, or is the Asian Century White Paper putting us right where we should be?
PM: The Asian Century White Paper is setting us up for the future.
As a Government, step by step we have worked on the relationship with China, step by step every day tended to the relationship with China.
We delivered the Australia in the Asian Century White Paper because we wanted the whole region and the whole of the Australian people to understand the nature of the opportunity and some of the risks that would confront our country in this century.
Now it's only this Government that has a plan for Australia in this century of growth and change.
It's only this Government that has a plan for comprehensive engagement across the region as a result, including with China.
JOURNALIST: Prime Minister, on foreign investment, what messages if any have you been told by Chinese business people about their views of Australia's foreign investment system. Are you open to any changes, do you think it needs any changes?
PM: Well the section of the day in which I'll get to deal most directly with business people will be later in the day.
But from time to time I have had discussions about, with the Chinese business leaders, about foreign investment in Australia and what I say to them is, over the last ten years there has not been one investment proposal that has been knocked back, not one.
We have a Foreign Investment Review Board system which is appropriate, and we will continue to operate that system.
But what is its track record? Well its track record is over ten years not one proposal for investment by China has been declined, and we've seen I think the statistic, I think 380 given the tick.
Now this is in the interest of the Australian nation to see this capital investing in things like industries for the future including food processing that the Minister for Trade has just talked about.
It's in our interests to see that kind of investment. And that's the way in which we view investment decisions.
As for the future I might actually turn here to Minister Emerson for some remarks because he is the Minister directly involved in negotiating further trade arrangements including the free trade agreement.
MINISTER EMERSON: Thank you Prime Minister. As the Prime Minister indicated, more than 380 applications have been lodged and all of them have been accepted; six with conditions, six out of 380.
By any standard that is a country that welcomes foreign investment.
Yes we do have a Foreign Investment Review Board process; that helps give assurance to the community that that foreign investment is in the national interest.
The worst thing that can possibly happen is to meddle with that Foreign Investment Review Board process by dropping the threshold, the screening threshold, from $244 million for private companies, to $15 million, as advocated by the Leader of the Opposition and the Deputy Leader of the Opposition and the Leader of the Nationals in the Senate, Senator Barnaby Joyce.
If you want to send a signal to China that foreign investment in China is not welcome in Australia, just look to the play book of Tony Abbott and Barnaby Joyce, because Mr Abbott came to China, actually came to China, and announced in a speech, that particular types of Chinese investment in Australia would rarely be approved.
This is sending a very negative signal.
In contrast, the Labor Government welcomes foreign investment that is in the national interest.
We will keep working with the Chinese authorities, including the China Investment Corporation, the chairman of which I met recently and he indicated that they're looking at a new vista of opportunities beyond minerals and energy and he met too with the head of the Foreign Investment Review Board.
So we don't sit back on these things. We are proactive because we know that we are a savings deficit country, that we do need foreign investment; that has been our history since European settlement.
We are committing to that for the future.
The Coalition would jeopardise it.
Furthermore, the Coalition would jeopardise a free trade agreement between Australia and China for this very reason, that China wants at the very least the maintenance of those screening thresholds.
They'd like to see change in terms of those for the better from their point of view.
But what they are seeing from the Coalition is a decision that that threshold would be dropped, would be dropped.
That is the death of a free trade agreement between Australia and China.
That's Coalition policy.
JOURNALIST: But you haven't had any progress on the FTA so-
MINISTER EMERSON: Sorry?
JOURNALIST: The FTA doesn't appear to be progressing under your Government either.
PM: I think the point the Minister is making is we continue to have discussions to advance the free trade agreement.
We continue in those discussions to bring a sophisticated understanding to Australia's economy and to its future, as opposed to the sort of simple talk, the kind of economic simpleton talk that we've seen from the other side of politics, which would make a free trade agreement with China and all of the jobs that would flow from it for Australians impossible.
JOURNALIST: Prime Minister about this program...
PM: AsiaBound?
JOURNALIST: No, sorry, doing business in China
PM: Yes.
JOURNALIST: What exactly is it? Is it pamphlet, is it a course, is it a-
MINISTER EMERSON: It is a course. It's an online service; I'll get you all of the details later so that you can fill it out.
But it basically is being made available to any business that has an interest in doing business in China to point out that there are processes that need to be followed and to give recommendations on ways of mitigating risk of doing business in China as we would in other countries.
JOURNALIST: Do you have this service for any other country?
MINISTER EMERSON: This is particularly out of the white paper on Australia in the Asian Century.
We do provide this sort of service through our embassies whether it's in other countries in the region or more broadly.
But we thought that this is an initiative that is timely in respect to China.
Why? Because we do want to promote further Australian business engagement with the region.
Why do we do that? Because we want to create a splendid diversity of career opportunities for young people, more jobs, better jobs for young people and we see China as integral to that.
JOURNALIST: Prime Minister, can I ask you about the pivot? You've mentioned that [inaudible] is pivotal to Bo'ao, and China is pivotal to Australia. And there are Chinese Generals who believe that Australia is the fulcrum to the American military pivot...
PM: Okay, I want to hear two more layers on this before I answer this question! No I am teasing you.
JOURNALIST: My sense is that when you say that Australia is not part of any military containment or military pivot to China nobody believes you in the PLA. What do you say?
PM: In answer that question Australia's outlook on peace and security in our region is of long standing, it is well known to our interlocutors in China, it is well known across the region.
You have seen it canvassed by this Government, it forms a backdrop to the White Paper on Australia in the Asian Century and we will deliver a new defence white paper relatively soon as promised.
We welcomed the rebalance of the United States of America to our region.
The United States has been a force for peace and stability and security in our region of the world and we believe that will continue.
We believe that looking at our region of the world that we can continue to see peace and security; that we can work with China and with other countries in the region on that long term peace and security.
That's why we pursue compressive discussions about our relationship at every level including me being here in China to meet the incoming leadership of China.
As I indicated yesterday we do, amongst a wide range of ways of broadening and deepening the relationship, continue to have a defence dialogue, which is of long standing, basically been there for a decade and a half.
JOURNALIST: Prime Minister, Peter Costello is at this forum, he's - it probably won't surprise you - had a swipe at superannuation changes saying it'll raise barely any revenues and should have been left alone. Do you welcome his comments?
PM: The Acting Prime Minister and the Minster for Superannuation have dealt with all this in Australia today so I won't add.
JOURNALIST: Prime Minister, have you have any consultations or briefings with the US since the North Korean crisis has emerged?
PM: Clearly we get the opportunity, I haven't personally spoken to anybody from the US, but in terms of forming a view about what's going on and strategic outlook on these questions the dialogue is there as a standing part of what we do and what our officials do.
JOURNALIST: What do make of reports of Fidel Castrol that has weighed in and urged everyone to show restraint?
PM: I won't be commenting on that, our attitude is as I've outlined it yesterday and today.
Thanks very much.