19 May 2016

Australia and Asia: the next chapter

CFO Forum: Accelerating Growth 2016
Speech by James Hogan, Head of Commercial Banking, HSBC Australia

Good morning ladies and gentlemen.

On behalf of HSBC, I would like to extend a thank you to Simon and the CFO Forum team for inviting us to attend and provide our view of China and Asia.

So why are we here today? As Nisid Hajari explains – “everything revolves around China.” We are all here at Chowder Bay because we want to better understand China, the integral role it plays within the rest of Asia, and importantly how to do business in and with China.

As I am sure you all read in the papers, there is a new statistic every day that strengthens the China story and indeed the China-Australia story.

For decades, the Australian economy has seen a heady uplift from China’s meteoric growth.

Today, however, our relationship extends beyond natural resources and even beyond traditional trade.

Our financial linkages are strengthening. Australia continues to be the beneficiary of China’s ‘going out strategy’ but the profile and composition of this investment is shifting in lockstep with both economies maturing and rebalancing growth.

Reflecting on our own clients, the diversification and evolution of the China-Australia corridor is evident. We are starting to see:

Investment into China from high-value Australian medical service providers;

Australian seafood companies setting up operations in emerging Chinese provinces like the Pearl River Delta;

Active capital markets and M&A activity from Chinese privately owned enterprises into sectors like health and wellbeing, agriculture and infrastructure to name a few; and

The opening up of Chinese capital markets (panda and dim sum bonds) to Australian issuers.

But more importantly, it is a story underscored by a cultural connection that will embed the Australia China relationship for years to come, and make doing business in China simpler and more fruitful for Australian companies.

While the China story is paramount to Australia’s ongoing prosperity, the rest of the region cannot be overlooked.

Australia is strategically aligning itself to economic behemoths like India and ASEAN. Indeed, Australia is part of two mega-regional trade accords including the TPP and RCEP, and is on the cusp of signing the long awaited FTA with India later this year.

While the strategic imperative exists at a government level, that alone is not a silver bullet. The business community – including those of us in this room – must begin to understand the dynamics and opportunities attached to this burgeoning region.

Read the full text of the speech Australia and Asia: the next chapter (1-page PDF 11.5KB)