Australia must build economic resilience: Treasurer

6 September 2021

Australian Treasurer the Hon Josh Frydenberg has called on Australian businesses to keep building their resilience in the face of strategic competition and attempted economic coercion, in a major speech at The Australian National University (ANU) today.

The remarks came during his keynote address to the 2021 ANU Crawford Leadership Forum, which brings together political, business, public sector and academic leaders to address the major geopolitical and economic challenges facing the world.

"There can be no doubt that strategic competition is back. It is a defining feature of the economic and security landscape we face," Mr Frydenberg said.

"We have all witnessed the major shifts in global economic weight over recent decades. Defined by the re-emergence of China and its rapidly growing economic weight.

"This has helped to lift more than 800 million people out of poverty and been a major contributor to global economic growth and prosperity.

"But more recently, it has also been defined by another feature. A more confident and assertive China.

"A China that is willing to use its economic weight as a source of political pressure. It offers economic 'carrots' through initiatives such as the Belt and Road. And it threatens economic consequences for perceived misdeeds."

The Treasurer told the forum that Australia is on the "frontline" of this new strategic competition but still remained "resilient".

"China is our largest two-way trading partner, accounting for over 30 per cent of our trade," he said. "And the scope of our trading relationship has broadened over time.

"Evolving from mining, to agriculture, to services such as tourism and education.

"In many ways our economies are complementary. Ensuring the economic relationship is mutually beneficial."

The Treasurer noted that it was "no secret" that China had recently targeted the Australian economy. He said such trade actions "carry a cost" to both countries.

"They rob Chinese consumers of premium Australian wine, seafood and other goods," Mr Frydenberg said.

"And they rob Chinese industry of high quality and high value inputs, such as Australian coal.

"We would both be better off if markets were allowed to operate freely. This is why we want a constructive relationship with China.

"Nevertheless, in the face of these challenges the Australian economy has shown itself to be highly resilient."

According to the Treasurer, while Australia's economy remained resilient in the face of such trade actions, "we cannot stand still". He issued a call to arms, Australia must find new ways to reinforce that resilience.

"Going forward, businesses also need to be aware that the world has changed," Mr Frydenberg said.

"And that this creates greater uncertainty and risk.

In this respect, they should always be looking to diversify their markets, and not overly rely on any one country. Essentially adopting a 'China plus' strategy.

"And in the same way that Governments are investing in economic resilience.

So too, should Australian businesses - from cyber risks to supply chains and everything in between."

Read the Treasurer's full speech online.

The 2021 ANU Crawford Leadership Forum runs from 6-7 September.