David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

Will the Treasurer update the House on the state of the international economy? What do recent developments in the Chinese economy mean for Australia?

Joe Hockey (North Sydney, Liberal Party, Treasurer) Share this | Link to this | Hansard source

thank the honourable member for Banks for that question. He has a very large Chinese community in his electorate, particularly in Hurstville. This morning and yesterday afternoon the Minister for Trade and I hosted the second annual Australia-China Strategic Economic Dialogue with Chairman Xu Shaoshi, who is one of the most significant ministers in China and one of the most senior economic ministers. It was very timely that he should be here as Chair of China's National Development and Reform Commission, which has responsibility for the overall management of the Chinese economy. Clearly, there is a great deal of discussion around the world about what is happening in the Chinese economy. As Chairman Xu said to us, there are many different pressures on the global economy—and not just what we have seen recently in Greece. There is a great deal of emerging anxiety about increases in interest rates in the United States. There are also capital outflows from emerging economies, and low oil prices and commodity prices are having quite a significant impact on developing economies like Indonesia, where Chairman Xu is about to fly to.

The bottom line is that China sees the movements in its currency and decisions made by the governor of the PBOC, the Chinese central bank, as about facilitating greater capital flows. Importantly, we need to remember that the yuan has appreciated significantly in recent times and that has had quite some significant impact on Chinese exports. The Chinese economy, much like the Australian economy, is going through a transition. In more recent times, it was a very significant exporter. Whilst trade flows have increased for China, they have an excess amount of residential real estate, an excess amount of steel and, importantly, they are trying to get their consumer class to lift. The more we can get that consumer class in China to lift, the greater the opportunity for Australian exporters. Chairman Xu reinforced to us and we affirmed to him that the China free trade agreement is good for Australia and good for Australian jobs, and we are determined to see it through because it is going to deliver the prosperity for all parts of Australia that we want and jobs for all parts of Australia that we need. The more we can facilitate the growth of China and the opportunities in China, the wealthier Australia will be, because, as he reminded us emphatically, for every dollar we spend buying Chinese goods and services, the Chinese spend $2 every year. (Time expired)