E&OE
24 March 2009
Speech (students Q & A) – Sichuan University, China
STUDENT: Thank you Minister, welcome to the university. I’m a student from the university. My question is what do you think the signing of the free trade agreement will produce, what will happen (inaudible)?
STEPHEN SMITH: Thank you very much for that question. This is not my first visit to China but it's my first visit to China as Australia’s Foreign Minister. In previous visits to China as a member of parliament, I’ve of course been to Beijing, to Shanghai and also to Guangzhou. On this visit, my first visit as Australia’s Foreign Minister to China, I wanted to try and send a signal, to make a point that Australia very much appreciates that China is much more than Beijing and Shanghai. I come from the great state of Western Australia, so I am naturally sympathetic to the western part of the country or the western part of a continent. So I came here first. But I came here first to make the point that one of the things that Australia sees as adding to the great potential of, not just the economic relationship but the general relationship between Australia and China, is for Australians, Australian companies, Australian investors to focus on all of China, including Sichuan Province. And one of the things I think we can do in addition to a free trade agreement between Australia and China is to encourage Australian investors and Australian companies to look where they have to date, to look beyond Beijing, Shanghai and Guangzhou, to look beyond to all of China. That I think offers tremendous potential for both Australia and China.
STUDENT: Thank you Minister for an excellent speech (inaudible). Can you let me know what is the negative impact on Australian education of the financial crisis?
SMITH: Thank you. Just as the global financial crisis has had a negative impact on China, so has it had a negative impact on Australia, and we’re now just starting to appreciate just how adverse the consequences can be. Which is why Australia’s been arguing very strongly, through the G20, that we need to ensure fiscal stimulus packages around the globe, and we also need to ensure that we reform some of our international credit arrangements, particularly the bad assets or the so-called toxic assets. The implications, as we’ve seen in Australia to date, have been reduced domestic economic activity and a loss of jobs, which is why, as I indicated in my remarks, we have introduced two stimulus packages, one at the end of last year and one in recent weeks. Today I think its fair to say we haven’t seen any adverse implications from the global financial crisis in our educational institutions, but we do worry that if the crisis is prolonged, that there will be adverse impacts for all aspects of our society, which is why we’ve been working so hard to offset the adverse consequences with increased domestic stimulus. More generally, in Australia, as in China, the single most important thing you can do for a young Australian or a young Chinese is to give them a chance of a good education. And that’s why I’ve been so lucky to have had the chance to attend the University of Western Australia and why you’re so fortunate to attend this great University. Thank you.
STUDENT: Minister Stephen Smith, thank you for coming to Sichuan University. In your speech you just mentioned the measures the Australian Government is taking to offset the financial crisis. How do these measures work to Australia’s economy? Thank you.
SMITH: Well, Australia has been a prosperous country for a long period of time by being two things: by being an attractive place for capital investment and by being a great trading nation, originally starting with some of our minerals and petroleum resources, but now across the range of economic activity, services and the like. What we’ve found as a consequence of the global financial crisis is that our trading partners have suffered and therefore the global demand for our exports has reduced. And that’s why we’ve needed, at a time when our external demand or our export demands have fallen, to seek to stimulate domestic economic activity. And whilst our measures have been a $10 billion to a $42 billion measure, nonetheless the economic theory is the same. For the same reason China implemented the equivalent of an A$885 billion stimulus package, to offset the reduction in global demand. We think it makes good economic and social policy to seek to stimulate domestic consumption and domestic activity.
[ENDS]
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