China-Australia Business Relations. Are we still Lao Pengyou?

Sep 9, 2020

Close business friendships, and our common humanity, must always transcend loose political rhetoric.

As one who has enjoyed close business ties with China over many years, I ask my countrymen and women not to conflate the gentle people of China with its current leadership or to allow political ideology to taint the warm interaction between our business communities. Only 90 million Chinese, just over 6% of the population, belong to the communist party.

Chinese business people are keen mercantilists, not politicians, and hold strong Confucian values – values that we both share – around family, personal loyalty and gregarious social discourse. The ties between our businesses have evolved slowly, over time, and are based upon business trust and pragmatism, not politics. In business, bottom lines matter and political differences evaporate. This makes our common humanity more important and reminds us that China’s socialism is a pragmatic form, with market characteristics.

Business people on both sides understand this and allow for it. They must do so if they hope to succeed in a globally competitive marketplace. However, it is troubling to contemplate that, when a political action by Australia causes offence, as asserted in a recent address by China’s Deputy Ambassador to the National Press Club, we should pay a business price. Cancellation of our barley contracts, and deregistration of our meat establishments, point to that possibility. Businesses in both countries will be disappointed that their mercantile efforts and interests are compromised in this way.

As political tensions threaten our commercial arrangements, it may serve to remind China’s leaders of the days when we were close friends. In 1980, Deng was opening China’s doors. I arrived in Beijing as a bitter Gobi wind hunted through its icy streets. There were no Western shops, no cars, and Beijing sang to a timpani of rattling bicycle chains and cycle bells, as one million Mao-suited comrades pedalled down Chang An.

I rejoiced at Australia’s decision to recognise China and the adventure I would face working with new Chinese friends. Our first ambassador, Stephen Fitzgerald, and his team of fluent Mandarin speakers had made my work easy. They had already forged intimate ties with their Chinese counterparts. Australia was a ‘Category 1 Western Friend’, allowing our diplomats to travel outside of Beijing. Only Australia, Canada and New Zealand enjoyed that privilege. Three phrases were repeated, as both sides worked to establish trust: Yoyi (Friendship), He Zuo (Cooperation) and Lao Pengyou (Old Friend).

I was told that Australia had been singled out for this special treatment because we were a modern, non-threatening nation, ideally placed to assist China’s re-engagement with the West. Our joint venture with Syme Media delivered China’s first English newspaper. Australia was chosen as a testing ground for China’s first foreign investment, in our minerals sector, because we were trusted not to take advantage of it. We rewarded that trust, gently guiding its investment to ensure a safe outcome. A second soon followed.

In 1983, I was privileged to roll out Lionel Bowen’s China Action Plan, an initiative aimed at doubling trade between us over five years. With a roving commission to deliver deals, I was delighted that we achieved that goal in just three. The program was breathtaking in its simplicity. We simply asked China’s peak business bodies, in each sector, to join with their Australian counterparts in building commercial bridges and removing roadblocks.

In the early phase, China suggested that we balance our trade by importing Daching crude, so we met with Caltex to discuss that possibility. “Not that bloody waxy crude, mate … and not at $28 a barrel!” they exclaimed. “What would you think of it at $22 a barrel?” I asked. “Bloody beautiful crude!” they replied, and the deal was closed. Both sides seized the moment, and the rest is now an extraordinary tale of explosive trade growth.

China might reflect upon the many trade missions we sent to help it engage with the West. Our lawyers helped China draft Western trade and commercial laws and dispute settlement arrangements. We helped it meet myriad global standards for its electrical, engineering, medical and other products and services, opening new markets. Our agricultural scientists helped China fuel the modernisation of its food and fibre sectors. Our intellectual property, both professional and commercial, was liberally transferred to assist China’s rapid evolution into a modern nation-state. Many other partnerships followed, in the arts and sciences, in education, in tourism, and in sporting exchanges.

As a young sporting enthusiast, I enjoyed establishing the Beijing Cricket Association. I recall a wonderful exchange with the Ministry of Sports that went something like this: “You can use our baseball park from 10 am ’til noon.” To which my retort: “But we need a large playing field … for a whole day.” “You play too slow,” came the response. “Must play faster!” The ambassador for Sierra Leone, with hands like meat plates, was a magnificent wicket keeper. Such is, and remains, the nature of our common humanity.

Our nascent partnership with China was built upon good humour, real friendship and genuine trust. The legacy of our goodwill was, in no small part, the emergence of a modern Chinese state, which now strides the globe so confidently. It saddens me that China’s present leaders might have forgotten that early, shared journey with Australia. Our two nations enjoy a unique balance of comparative advantage in trade. Both sides have much to lose if either side diminishes that symbiotic relationship. Insensitive words, or business penalties imposed as a political retort, will only encourage exporters to diversify their supply chain dependence upon China. That would be tragic for both sides.

I ask the leaders of both nations to work towards restoring trust, to avoid bellicose language and to replace it with soothing words, respecting each other’s sovereignty and seeing business partnerships as genuinely aloof from political differences. And above all, by repeating three phrases that once meant so much: Yoyi, He Zou and Lao Penyou.

Share and Enjoy !


Receive articles straight to your Inbox

How often?

Thank you for subscribing!