A need now to improve China relations, says Ryan Stokes
Seven Group’s chief Ryan Stokes has called for ‘enhanced constructive dialogue’ to rebuild relations with China as the nation’s biggest trading partner.
Ryan Stokes believes the Covid-19 pandemic has played an important role in undermining the strength of the relationship between Australia and China and has called for “enhanced constructive dialogue” to rebuild relations with the nation’s biggest trading partner.
“China is not really a country you can build rapport with via Zoom,” Mr Stokes said on the sidelines of the annual Credit Suisse Asian Investment Conference opening dinner in Sydney.
“So I think in that context (with Covid-19) we haven’t had the business meetings and the nuancing of our message across multiple aspects. That’s probably played into elevated tension.
“Now, is that solved when people are able to visit? It won’t be hurt. Hopefully, we can get a bit more breadth in our engagement with China, because that’s going to be an important part of our future, in any way that plays out,” the Seven Group chief executive said.
In August 2017, Seven Group sold its WesTrac Chinese division to Lei Shing Hong Machinery for $540m after 16 years establishing strong relationships and a leading market presence in the country.
The Stokes family’s private equity company, Australian Capital Equity, chaired by Stokes’s father and family patriarch Kerry, still owns assets in China.
Prime Minister Scott Morrison has flagged the potential for introducing sanctions against China if President Xi Jinping’s regime were to provide military equipment to Russia in its invasion of Ukraine.
Defence Minister Peter Dutton has also claimed China’s failure to condemn Russia “should send alarm bells across the world”. He said “all free nations will face a darker tomorrow” if President Vladimir Putin succeeds.
Their comments come amid an increasingly frosty relationship between Australia and China, which has led to trade sanctions levied on Australian export,
“As a key trade partner for Australia, it is a country that we have had both proximate and economically various close ties to for generations, for the benefit of all Australians,” Mr Stokes said.
“The trade outlook with China should be strong and we’d like to think that any issues that are emerging can be dealt with with an enhanced, constructive dialogue.”
Credit Suisse’s moved its asset allocation for Australian clients to be overweight equities globally last week, including China.
“For corporate clients, there’s a recognition that China is important to Australia’s economy and to their businesses. Corporate Australia recognises the need to have these longer-term ties to China – it’s absolutely critical,” said the firm’s local CEO Richard Gibb.
The theme of this week’s Credit Suisse conference, being held virtually over four days, is “Metapmorphosis 25”, exploring trends that have shaped Asia and those that will transform the region over the next 25 years.
More than 2000 clients, including institutional investors, entrepreneurs, corporates and family offices, are attending. Before Covid-19, the conference was held in Hong Kong each year.
Mr Gibb said he had seen more caution among the firm’s clients recently given the war in Russia and broader geopolitical tensions.
“In the last month or two, we’ve seen activity in the market slow somewhat,” he said. “Corporates have put things on hold a little bit, particularly with regards to capital markets activity. That’s not a surprise given what’s going on in the world.”
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