Australian business forging ahead in Asia
Updated
As chief economist for the Australian Trade Commission, Tim Harcourt has seen a lot of airports in Asia, the Middle East, Europe and the Americas in his mission to help open doors to Australian exports.
Presenter: Sen Lam
Speaker: Tim Harcourt, chief economist at Austrade and the author of a new book called 'The Airport Economist'
LAM: Who or what is an 'airport economist'?
HARCOURT: Well you know the airport economist term first was applied to Milton Friedman because he came to Australia in the 1970s when he was advising Chile, and he came to Australia and he said you've got to balance your budget, you've got to cut taxes, you've got to deregulate the labour market and you'll be fixed and they said how long have you been in Australia Professor Friedman, he said well actually I've just arrived, and it was a press conference at the airport. So they've used this 'airport economist' term to apply to Friedman and Sachs and people at the IMF, but also my own life, 43 countries in four years, people say what do you think of Thailand, what do you think of Philippines, what do you think of Brazil? And I go well I've just seen the airport so far but good prospects I hope.
LAM: But presumably you would have done your research before actually going to those countries?
HARCOURT: Oh yes indeed and in the book what I actually do is to get into the entrails of every country, you know talking to community workers and unionists and businesses and government officials, and in many ways the book is like the American book for economics that looks at the quirky things about different economies. You know why does Singapore produce more engineers than ballet dancers, and why do people in the Philippines text rather than talk on their mobile phones, to see what's unusual about an economy and also what the opportunity is for Australia.
LAM: Indeed well 14 out of 20 of Australia's top export destinations are in the Asia Pacific region, so we've really found our niche there haven't we?
HARCOURT: Well it's been wonderful, I mean it's 25 years since Paul Keating and Bob Hawke, it depends on whose book you read floated the dollar, and the opening up of the Australian economy came right at the time of Asia becoming a major player on the block in terms of the world economy. And Geoffrey Blainey used to use this phrase, the tyranny of distance to describe Australia. And now I think it's the power of proximity, because we opened up our economy right when Asia became important. So the lucky country made its own luck I think.
LAM: But is there something about Asia, and indeed the Asia Pacific region that resonates with Australian business do you think?
HARCOURT: Oh there's no doubt about that, I think we've been in Asia for a substantial time now in the medium term. I think our population has more connections with Asia, there's things like time zones, there's things like cultural affinity getting closer, and also I think Australia being a small to medium power doesn't have any imperial baggage that some of the other countries have, and we're quite good at doing things. You know from the Beijing Olympics, building the water cube and a lot of the stadium infrastructure there, to doing a lot of regional work around China with airports and buildings and so on, I think Australians are great project managers and pretty earthy people, I think that goes down well.
LAM: Indeed you also write that 20 per cent of Australian small to medium size exporters now sell to China?
HARCOURT: China's interesting, people assume it's just Rio Tinto and BHP Billiton and Woodside, but we've found in our new data that as many small businesses go to China as to the whole of Europe, and we're actually finding there are more businesses based in China than Japan and other countries. So the second tier and third tier cities that people say are country towns and are eight million people are actually being very happy hunting grounds for Australia and I think I read an article in the Fin Review last year saying we're all hugging the panda. And certainly economically China's been good for us.
LAM: And just this morning you've been addressing Australian businesses on investing in China. What was the core of your message there?
HARCOURT: With China-Australia Business Week in Melbourne and I think the message was A. that Australia's obviously doing very well in China and the Beijing Olympics will again provide a nice symbol of that opportunity. But also that China has a big interest in Australia now beyond resource security, and we had of course a lot of delegations from China who are interested in learning more about Australia. They don't see it as just rocks and crops, they are seeing more the professional services, the technology, the architectural design, and some of the sophistication of Australia. And some of the close links with China that's of interest.
LAM: You speak of links, certainly anecdotally I know that when my uncles did business with Chinese business people, the people-to-people, person-to-person relationship is very important. Does that translate into the Australian way of doing business as well in China?
HARCOURT: I think it certainly helps, I think the fact that in '89 Bob Hawke let a lot of students stay in Australia, a lot of those people in the book like Jimmy Du, have gone back to China as Australians and helped determine ties there. A lot of expat networks like I saw the Shanghai Tigers footy club play the Beijing Bombers. So I think some of the expat networks are important too, and some of the social links now in China through education.
LAM: And what do you make of this perception of the Rudd government's focus on China and his critics say to the neglect of our relationship with our other major trading partner Japan. Do you think that that's a danger that the current government has to look out for?
HARCOURT: My feedback from Japanese clients and Europeans, Americans is that having a Prime Minister that knows China and speaks Chinese is a benefit to them as well. My little daughter's from China, she's four years old, she was born in Quilin. Whenever Kevin Rudd comes on the TV she says that's Kevin, he speaks Chinese, you can't Papa but that's ok I will be your teacher.
