Business leaders need to see beyond the “infantile” debate of a choice between China and the US when mapping Australia’s future economic success, says John Howard, in a view that has won support from senior Obama administration officials.
And, writing exclusively today for The Australian, Australia’s ambassador to Washington, Kim Beazley, says Australian businesses are starting to broaden their presence in the US thanks in part to the extraordinary shale gas boom that is prompting a return of manufacturing in the world’s largest economy.
“One of the things that Australia must do is avoid those people who say we have to make choices,” Mr Howard told a recent event at the Australian consulate in New York.
“We have what I call a rather infantile debate going on in Australia at the moment about the choice that we have to make between China and the United States.” His comments, to be published in a special edition of the deal magazine in The Australian tomorrow, come as our business and trade relationship with China has continued to dominate the business narrative in Australia.
But the relative investment relationship with China pales against the size of the US, where the mutual investment relationship is $1 trillion, at least 20 times bigger than the equivalent number with China.
“It is important not to be mesmerised by what is happening in China,” Mr Howard said at the event last month.
“Yes, it is the second-largest economy in the world, but that is the product of the sheer size of the country.
“On a per capita GDP basis, which is really the proper measure of wealth, China is still a long way behind many other countries.
“It will be years before it matches the strength, on a per capita GDP basis, of many middle-ranking European countries and it is still a long way behind – on that measure – Australia, Germany and, of course, the US and Japan.”
In an exclusive video interview to be webcast tomorrow on The Australian‘s website, the US ambassador to Canberra, Jeff Bleich, said Washington, like Australia, was betting on the economic rise of China “and is deeply engaged in its market”.
But he noted the size of the Australian and US investment relationship, adding: “I think any suggestion that Australia has to choose its economic partner or has to choose between friends just doesn’t reflect reality. We’re all betting on each other.”
Mr Bleich said the natural gas boom in the US was a “game changer for us”. “The US will be exporting more petroleum than it’s importing,” he said. “That has had effects that radiate throughout our economy. Manufacturing is much less expensive because energy costs are so low.”
Mr Beazley says the North Americans will be completely independent of Middle East oil soon and the US “will overtake Saudi Arabia as an oil producer by 2020”.
Recent economic data has indicated that the US is returning to stronger growth and it is one reason for the sudden rise in the past week of the US dollar against the Australian currency.Source: The Australian – US v China debate ‘infantile’, says John Howard
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