April 8 (Bloomberg) -- Australia is taking the right steps toward a better relationship with China, with Prime Minister Julia Gillard’s visit providing fresh impetus, according to mining magnate Andrew Forrest.
“We have started to take the relationship a bit for granted,” said Forrest, chairman of Fortescue Metals Group Ltd., in an interview broadcast by Sky News yesterday. “Other countries have moved ahead of us. The prime minister coming to the Boao Forum basically puts us head-to-head with all the countries competing for China’s business on a fair and even playing field.”
Gillard yesterday addressed the forum in the southern province of Hainan and met China President Xi Jinping, before heading a delegation of business leaders and ministers in a visit to Shanghai and Beijing. China is Australia’s biggest export market, buying about a third of all overseas sales in February, and is a major customer for iron ore and coal.
Expanding the relationship with China requires development of trust and friendship at high levels between companies and politicians, said Forrest, the chairman of Australia’s third-biggest iron-ore producer. He has led the establishment of a forum for business leaders that had its inaugural meeting in Boao, and urged the government to open the doors to more Chinese investment.
“We have nothing to fear,” he said. “They can’t take the farms away, they can’t take the business away. But they can inject capital in our economy. We do need that foreign investment.”
Gillard may seek a deal during her visit enabling direct conversion of Australian dollars into Chinese yuan, the Australian newspaper reported March 30. Gillard told reporters yesterday that she and Xi didn’t discuss the mechanics of such an agreement.
China Investment Corp., the nation’s $482 billion sovereign wealth fund, raised the issue of restrictions on foreign investment with Gillard, Jin Liqun, head of the fund’s supervisory board, said in an interview.
He said Gillard told a group of Australia and Chinese executives that Australia welcomes Chinese investment and that the country was “hungry for capital.”
High-level meetings will promote cooperation between the countries and continued negotiation can lead to a gradual reduction of barriers to capital, Jin said.
Australia is open to foreign investment from China and its continuing to have discussions to advance a free-trade agreement, Gillard told reporters in Boao on April 6.
“We work every day to strengthen our relationship with China,” she said. “That’s what we’ve done as a government and that’s what I’m doing here. There are huge opportunities for Australian businesses here in China.”
Gillard said yesterday after meeting with Xi that he “brings to the table a deep understanding of Australia.”
The government and its regulator the Foreign Investment Review Board have met recently with representatives of China Investment Corp., which is looking at investments beyond minerals and energy, Trade Minister Craig Emerson told reporters April 6.
“We don’t sit back on these things,” he said. “We are proactive because we know we are a savings-deficit country, that we do need foreign investment. We are committing to that for the future.”
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