Speech by Garry Draffin, CEO of Invest Australia, At the Energy Session
Excellencies,Past
and
present
guests,Ladies and gentlemen,
prime
ministers,Distinguished
I am delighted to be part of this panel to discuss China and
Australia's energy future and the valuable business proposition that
Australia offers. Australia enjoys strong and wide-ranging economic
complementarity with China which supports our broader relationship.
Bilateral relations have now reached a new level of maturity with the
commencement of negotiations for a wide-ranging free trade agreement. The
FTA will build on the friendship and understanding forged by both sides
over the past more than 30 years of diplomatic relations and the strong,
mutual respect we have for our shared interests. People-to-people links
at all levels are a vital part of the relationship. The long-established
Chinese community in Australia and the Australian business community here
in China play an important role as do the forums such as this. Education
and tourism have also bolstered those people-to-people links. In
education, the number of Chinese students studying in Australia rose to
nearly 70,000 in 2004. The growth of tourism has also been spectacular.
In 2004, over a quarter of a million Chinese traveled to Australia and
the expectation is that this will grow to 1 million by 2010. Our
relationship is also supported by the fact that more than 400,000
Australians now speak Chinese and it's our second highest foreign language
in Australia.
In 2004, China moved ahead of the United States to become Australia's
second largest merchandise export market. Exports grew to 11 billion
dollars and were dominated be resources exports which made up 60% of the
total. Services exports have also grown by more than 26% per annum over
the past 3 years on the back of those merchandise export and they represent
a very strong future focus.
As previous speakers have mentioned, from 2006, Australia will begin
exporting around 1 billion dollars of LNG per annum to the Guangdong LNG
project for a 25-year period. Australia is seeking LNG markets around the
globe, including the west coast of the United States and in Asia. But we
do see a particularly bright LNG future for China and Australia. Australia
has LNG reserves of around 5,000 billion cubic meters with the prospect
of future discoveries. Currently only around 14% of that is contracted.
So there is considerable capacity to supply additional LNG contracts. One
field alone, the Greater Gorgon, is sufficient to supply at least 10
Guangdong-size contracts. We're all aware the global LNG market is very
competitive. But Australia has some strong supply advantages. We have of
course those large uncontracted reserves and existing and developing LNG
infrastructure in the Northwest Shelf in Darwin. We now have 15 years'
experience in LNG production, operation and delivery into the Asian market.
Political and fiscal stability are critical to long-term,
high-capital-cost investment. And in that regard, Australia has the
lowest risk of political instability in the Asia Pacific. Our economy has
been ranked the most resilient in the world for the last 3 years. And we're
one of the lowest-cost business destinations in the industrialized world.
And finally, Australia is the easiest places to start a business. The World
Bank estimates that regulatory procedures take less than 2 days in
Australia. With well-established track record of building large resource
projects and ultimately of course, we are only 7 days by sailing from
China's coast, Australia completely demonstrates a reliable, competitive
LNG capacity to service China's future energy demands.
China and Australia are moving to diversify their energy sources. But
as Chairman Ma indicated in his presentation, coal will be predominant
for some time and therefore very important to the China-Australia energy
partnership. Australia's coal sector is technologically advanced and,
like LNG, has substantial reserves. But it also has an internationally
recognized safety record and this presents a great opportunity for
technology transfer to China as they develop their resources. There are
other opportunities, particularly in the clean coal technology which the
Australian government is supporting development of and where there would
be commercial and environmental benefits for both of us. Both through the
two major resources and of course as the Prime Minister mentioned,
Australia also holds 1/3 of the world's uranium supplies, there must be
future opportunities there for Australia and China to develop their
partnership. And in this Australia provides a single entry point to
facilitate investment into Australia.
We work in partnership with the states and territories and other
government agencies to provide assistance across a range of markets,
regulations and tiers of government. Here in China, we have been
developing strong links with the private sector. Partnerships between the
private sector and partnership and coordination between governments and
investment agencies like ours would ensure that we all achieve our shared
objectives. With support of this, particularly by appointing our senior
investment commissioner of China to be based here in Shanghai, we have
strengthened the offices in Shanghai and Beijing to service the growing
market. Our relationship and MOU with the NDRC would also be an important
part of the development of investment attraction into Australia going
forward.
Thank you all for your time. It's been a pleasure to be part of this
afternoon. Together, we have an exciting and prosperous future.
Thank you!