Australia’s Asian Century White Paper has sent an unmistakable message to the world that Australia is seeking a deeper engagement - economically, politically and socially – with Asia. But what does it mean to our neighbours in the region?
China’s press greeted the report positively, with the leading English language papers, China Daily and Global Times, acknowledging the importance that Australia places on the relationship with China. Indeed we scored a full page spread, usually reserved for the US and Europe.
But after encouraging congratulatory remarks there were a few barbs. There remains uncertainty about how serious we are in welcoming Chinese investment, about the ease of doing business in Australia, as well as a rejection of assertions that China needs to be more transparent about its defence spending and capabilities.
This reaction is not surprising; China at least has not been shy in expressing its opinions in the past. A quick scan of papers in other nations reveals a general welcoming of our strategic intentions in the region, but hardly at the level of interest being shown in Australia or by our international diasporas.
That’s not to say our Asian Century plan is not important to our regional neighbours.
We are a trusted and reliable supplier of minerals and ores, we play an increasingly important role in feeding the burgeoning middle class in Asia, we have much to offer as a major service focused economy, we have strong economic credentials, our legal and regulatory systems are robust and predictable and we are seen by many as a strong political power in the region.
We have Asia’s attention – but we are not the main game. The U.S. remains the reference point for many Asian decision-makers and citizens. While the U.S. is not regarded as the model that Asia ought to emulate, the directions and patterns of growth in Asia are also shaped by the political choices that China makes around its relationship with the U.S. and to a lesser degree Europe and some of its immediate Asian neighbours.
The White Paper has great potential to be a road map which can help us as a nation to navigate a path ahead. But we must not lose sight of the fact that this is not just about “us” and our ability to paint on the Asian canvas our vision of prosperity.
The fact that the White Paper talks of the “Asian Century” appeals to us, but that description is not necessarily how business people, government officials and the vast majority of the 3.5 billion people in our region see it. Even the concept of a “white” paper is somewhat ironic.
Our destiny and our prosperity will be determined by our ability to become more closely integrated into the Asian region, to find our position in a regional value chain, to sell more of our services. That’s easy to talk about, but hard to action.
Asia’s diversity and complexity means that there can be no simple model for a deeper engagement with Asia. Each of the countries in our region is at a different stage of its economic development. There are standout developed economies of Singapore, Japan and Korea, the rapidly developing nations of China, India and Indonesia and the emerging economies of places such as Vietnam, Cambodia and Laos.
They are all dealing with complex issues related to their stage of development and national aspirations. It should be no surprise then that the White Paper is not top of mind for our Asian neighbours.
If we are to engage successfully with Asia we need to think as much about what Asia wants from us, as what we can gain from our engagement with the region.
What then should business be thinking about? Here are a few ideas:
- Adopting a new perspective. We talk about the economic and political power of countries like China, but the reality is that we need to understand the cultural bias before we can completely understand the political and economic ramifications. We often think about “doing deals” but our regional partners want to get to know us better. It’s not about us becoming more Asian, but rather it’s about us becoming more culturally attuned to different cultures.
- Understanding the new model of Asian growth. Asia’s rise is often described as a story about scale and pace of change but it is really a story about a new model for Asian growth, and how this affects growth in Australia and globally. It’s about long-term policy choices of countries in our region, the regional institutions that regulate financial markets and the shape global governance. It’s also a story of an aging population, of the growing demand by the bourgeoning middle and entrepreneurial classes for high-quality products and services - particularly education, tourism and business services - and the competitive dynamics of global markets.
- Long term vision. All too often we view Asia through the prism of quarterly or monthly GDP figures or daily movements in commodity prices and glib commentary that is flashed around the newswires faster than it can be written. Much of this misses the point. The prospects for our region are underpinned by powerful economic forces – tectonic like - slow moving but profoundly altering the global landscape.
- Creating multiple strategies. Asia is not a unified market and is in very different stages of development with different national challenges. Companies operating in the region will not only need strategies for each market, but also ones that are informed by a broad appreciation of the regional and global picture.
- Big bold thinking by business leaders. To take advantage and integrate ourselves in the region will require a substantial investment in new skills for Asia and a new generation of business leaders who see the opportunities in our own region. It also requires business leaders to be courageous in their thinking, to push for the structural changes that are needed to build the institutions and mechanisms we need to better integrate ourselves in the region and to speak out to overcome the vested interests that are holding back much needed domestic reforms.
- The power of collaboration. Companies will need to be agile in operating to the changing conditions.
- Sense of urgency. The White Paper envisages a long-term plan, but its implementation must be immediate. Asia has many suitors. Other countries are already alert to the need to engage more deeply with the region.
We are facing complex, inter-related challenges that can no longer be looked at individually which require a concerted and coordinated push from governments, business and the entire community to fully connect across the region; to develop and integrate markets in a way that balances the needs of individual countries but recognises the importance of international trade, investment and institutions.
It will require determination to respond to economic, social and technical change, to adapt, to strike new alliances, to work together, to collaborate
No one should be under any illusion that this will be an easy task, but our willingness to commit to the task will allow us to navigate a path of our choosing, and not be left in the slipstream of Asia’s economic transformation.