26 February 2016
Transcript - #2016024, 2016

Interview on CNBC Shanghai

SUBJECTS: G20 Finance Ministers and Central Bank Governors Meeting (Shanghai); backing Australians in our transitioning economy; Turnbull Government’s National Innovation and Science Agenda; Turnbull Government backing Australian FinTech in Asia.

PRESENTER:

Earlier today we were speaking to Hank Paulson, who made some remarks saying there is increasing interest and scrutiny on China. How well do you think the leaders are managing this economy?

TREASURER:

This is a good opportunity for G20 to get a better understanding of the current issues here. The Australian economy has a deep engagement with the Chinese economy and it is not one dimensional. Certainly we have benefited greatly from the resources boom that we have had and what has been here with the production side of the economy that is going into the consumption phase now. Our economy is transitioning as well. So, our services sector has gone very, very well in recent times. A million Chinese visitors have come to Australia in the past year – a new record. So, we are quite synchronised with what is happening. What is happening here hasn’t surprised us. It wasn’t unanticipated. I think we geared ourselves very well for it.

PRESENTER:

Do you worry about it? Because a transition does take time even though you are transitioning away from commodities.

TREASURER:

Well, we’re both transitioning but even in the resources sector our export volumes are still up. Our market share is still growing in all of these important areas. So, we are maintaining our momentum there albeit at a different price. In the other areas of the economy we are seeing expansion. Our China Australia Free Trade Agreement has been landmarked. I think we have been able to achieve things there right across the board from services and aged care through to dairy and other areas of agriculture production. So, this is a widening relationship and it is diversifying, we are diversifying and I think we are well synchronised. So, I am a lot more optimistic than I think others are but it is based on our experience.

PRESENTER:

Given the Chinese slow down and the fact that we are seeing a slowdown in Chinese demand for certain commodities what is your outlook for commodities?

TREASURER:

The price will go where the price goes and our big exporters they have their own views on that. What we will continue to do is build market share and provide quality product and quality service. That is what we are good at and that is why, I think, we have done so well in this market. We will continue to expand into new areas of the economy. The last two days I have been up here, be it Hong Kong or Shanghai talking to FinTech…

PRESENTER:

I was about to ask you about that. How is that going?

TREASURER:

Well, I think it is going great. We have just announced a new platform – a Landing Pad, we’re calling it in innovation where we will be introducing Australian businesses through Shanghai and working with the Chinese Government to put those details in place. Equally working with one of our provincial governments, state governments, to introduce FinTech operators through Stone & Chalk into China. So, FinTech is going to revolutionise how consumers and businesses interact and they are the [inaudible] of the economy and it is going to have big implications for demand in the future. We want to be part of that, it is happening and we are going to be part of it and we have got to work out the best way to engage.