Originally published in China Daily Asia Weekly, 9-15 September 2016
In a recent high-profile speech, Australia’s Treasurer Scott Morrison made a fresh attempt to get Australians to support critical domestic economic reforms and improvements in government finances – causes I too believe Australians must embrace.
The need for Mr Morrison to take the lead on these issues is unquestioned; however his decision to use the speech to critique - in considerable detail - reform failings in China struck many as a curious intervention in foreign affairs.
I would have thought Australians would be more drawn to Mr Morrison’s call to action on reform, not by examples of the difficulties China is facing but by examples of China’s achievements in addressing its challenges.
As the CEO of one of the world’s largest professional accounting bodies that has been in China for many years, I see a government pursuing an ambitious reform agenda with strong determination. It is an example Australia could learn from.
Reforms to transform China’s economy from production-led to consumption-led growth and its massive corruption crackdown are truly remarkable and should be acknowledged as such.
Other notable examples include financial sector and supply-side reforms, efforts to encourage innovation and advanced manufacturing, improvements to intellectual property protections and the Belt and Road Initiative.
The latter aims to build a trade and infrastructure network along the ancient Silk Road routes.
Efforts to establish the Asian Infrastructure Investment Bank are also noteworthy. It is an important new regional institution which will help fund new dams, roads and other much needed development infrastructure across Asia.
While most of the developed economies around the world were forced to confront economic reform following the global financial crisis of 2008, Australia was cushioned from the worst impacts by its strong trading relationship with China.
China’s growth and demand for Australia’s commodities provided the Australian economy with enviable stability during that period.
While Australia was able to come through the crisis in a much stronger position than many other countries, the task of comprehensively tackling domestic economic reforms remains undone.
Given China’s critical importance to Australia’s economy, it is not unusual for Australian politicians to give a high level assessment of China’s economy.
However, commentary on specific aspects of another country’s economy, including “the activity of local government administrations”, “the shadow banking sector”, “debt levels” and “unfunded social security liability” is most unusual.
Australians need to be jolted out of their reform apathy. Mr Morrison, however, should consider if this is more likely to be achieved by highlighting China’s ambitious reform agenda or by providing an examination of the challenges that have driven the need for the reform.
The treasurer's speech also noted the need for Australia to lift the levels of private investment that are attracted to the country.
This is undeniably a priority. However, recent decisions taken by the Australian government, on the recommendation of the Foreign Investment Review Board, have left many observers baffled by the approvals process for foreign investment in the country.
These decisions have given the impression that Australia is an unpredictable investment destination for Chinese and other foreign investors. I do not believe that this is actually the case and it is something the Australian government must work to remedy.
Potential investors must be given clear and timely parameters for what is likely to be considered acceptable.
We need to avoid situations where bids from potential investors are blocked at the last moment, leaving the bidding parties frustrated by the process.
If Australia is to enhance its economic and broader cultural relations with China, a more balanced commentary on China’s economy – which recognises its significant reform agenda and increasing investor certainty for Chinese investors - is critical.
Beyond the political messaging, Australian businesspeople working in China understand these realities and will press ahead with meaningful engagement.