China, climate and energy prompt new business opportunities

China and climate are two global worries that can underpin huge business success, according to Christopher Pyne and Guy Debelle.

Defence technology, renewable energy and minerals processing are three massive opportunities for Australia’s economy and investors in a rapidly-changing world, the superannuation industry has been told.

Former defence minister Christopher Pyne says geopolitics is driving defence investment potential, while former Reserve Bank deputy governor and ex-director of Fortescue Future Industries Guy Debelle says Australia’s infinite renewable resources should spark new industries.

The duo – old university mates – told the ASFA Conference in Adelaide of the challenges caused by China and climate, and said hard work was needed to turn them into economic positives.

Mr Pyne said Australia’s defence industry had grown at 100 per cent a year “for the last five or six years”.

Much of this was due to geopolitical factors including China’s approach to the South China Sea and Taiwan that had reinvigorated US interest in the region, he said.

Former defence minister Christopher Pyne says AUKUS is “irresistible”.

“China is no longer hiding their strength. They want to be the other global power – China for many, many centuries was a global power … the West changed that.”

Mr Pyne said the AUKUS alliance was about much more than submarine purchases and bases, and also included “things like hypersonics, artificial intelligence, quantum computing, critical minerals, unmanned aircraft … all of which Australia has very significant capability in”.

“It’s not just about Australia getting US capability – it’s actually a two-way street,” he said.

“The US knows we have capability in Australia that they want too. A good example is quantum computing, where Australia leads the world – it’s about 12 months in front.

“At the end of the day all of this is going to impact on the economy and the Australian people.

“It’s irresistible. It will not be stopped. It’s critical to Australia’s future and is going to change our economy … the opportunities are endless.”

Mr Pyne said Australia already was the US’s second-biggest defence customer after Saudi Arabia.

“We’re the 11th biggest defence spender in the world, which is not a small thing,” he said.

“The US still spends one in every two dollars spent around the globe on defence – 50 per cent of the entire world’s budget.

“They are easily the most important power, and they are our best friends, and we are their best friends.”

Dr Debelle said Australia had the potential of being a green energy super power.

“I emphasise ‘potential’,” he said, adding that 2023 had been one of the slowest yeas for new renewable energy projects in a long time.

Guy Debelle says we are not moving fast enough on renewables. Picture: Britta Campion

“We aren’t moving anywhere near as fast as we need to.”

“Australia has capacity to generate way more renewable power than we will ever need domestically. Our domestic needs are a small fraction of what our renewable energy capacity is.

“To some extent our greatest capacity to address the climate challenges globally is around our exports.”

Dr Debelle said it all started with generation.

“We need to have green electrons and the capacity to generate them before we start getting too fussed about what we are actually doing with them – using them domestically or exporting them,” he said.

Dr Debelle said exporting hydrogen with current technology was not cost effective or physically effective, but there were alternatives.

Rather than “dig and ship” iron ore, copper and other critical minerals, Australia could use green energy for downstream processes to produce exports and “generate that value-add here”, he said.

This was prevented in the past by Australia’s relatively expensive fossil fuel energy. “Now there’s a demand globally for green energy, we are able to take advantage of that demand … and export in processed form,” Dr Debelle said.

“That’s a huge investment opportunity for this country.”

Originally published as China, climate and energy prompt new business opportunities