AICD round table: Business must lead China peace mission, top executives say

Leading company directors believe business must take the lead in rebuilding Australia’s strained political ties with China.

BlueScope and Fortescue director Penny Bingham-Hall with AICD chief executive Angus Armour ahead of the round table. Picture: Britta Campion

Leading company directors believe business must take the lead in rebuilding Australia’s strained political ties with China and say more subtlety is required in dealing with controversial issues, including conducting more dialogue behind closed doors.

The relationship between Australia and China has become deeply strained in recent months, prompting the Chinese to make increasingly belligerent threats to close their markets to Australian exports.

Bans have been mooted for sugar, copper ore and concentrates, wool, lobsters and wine after punitive action was taken against Australian barley, beef, timber and coal.

Australia recently referred China to the World Trade Organisation to challenge action taken against barley exports.

While Agriculture Minister David Littleproud has said the federal government is hoping “quiet diplomacy” will resolve the growing trade row, he has vowed that Australia will never compromise its sovereignty.

“My hope is that there is a reset in 2021 and everyone can step back a bit,” said Penny Bingham-Hall, a director of BlueScope Steel, Fortescue Metals and Dexus, at a round table forum with The Australian organised by the Australian Institute of Company Directors (AICD).

“Business has a role to play here because there are some very strong personal relationships between Australian businesses and Chinese businesses. I really hope that might be able to reset the relationship.’’

She said Australians needed to remember that China was a very big market for our products.

“It’s going to have a big impact on our economy,” she said. “I would be hopeful that there’s a little more respect shown between countries.

“Whenever there is a breakdown in a relationship, it’s important to take a step back, to have a think about it and show respect for long-term colleagues.”

Coles director and former Commonwealth Bank board member Wendy Stops said “upfront criticism” was not the way to deal with China.

“For those who have spent any time in China, or dealt with the Chinese culture, there is a way to do it and a way not to do it.

“China is very much about saving face.

“The challenge for the government is to find a way to have more of the behind-closed-doors conversations and not be seen to be so publicly critical. I don’t think that is accepted very well in the Chinese culture.”

Ms Stops said she hoped that Australia and China would be able to reset their relationship and “start this conversation again … but it’s not looking at the moment like that is going to happen in a hurry”.

Queensland Sugar chair Guy Cowan addresses the round table of the Australian Institute of Company Directors. Picture: Britta Campion

Amcor chair Graeme Liebelt said Australia had a “short-term challenge” in its relationship with China.

Mr Liebelt, who is also a director of ANZ and the Australian Foundation Investment Co, said China appeared to be “pushing hard” on Australia to assert its power.

He said he hoped that tensions with China were a “relatively short-term thing and we can get through that in the course of the next year or two”.

But he said Australia needed to acknowledge that it was dealing with the emergence of a new superpower in China.

“That’s going to require the world to find ways of reaching accommodations with that power, both on a security front and an economic front, and in financial markets and so on.”

He said the situation had not been helped by the “unevenness of the Trump presidency”.

“But the world does have a long way to go here in terms of renegotiating those arrangements and setting up the power balances differently.”

Mr Liebelt warned there was a danger that Australia could get caught in the crossfire between the US and China.

“Viewed globally, China is probably spending more time worrying about the US than worrying about us.

“Australia-China is not the main game — China-US is the main game and we may well get caught in the crossfire.”

He said Australia “should not be conceding every issue to China. We need to, as a sovereign nation, assert our rights to protect our own interests.”

But he said Australia needed to handle its relations with China in a way which “recognised the rise of China and recognised the tension between China as Australia’s most important economic power and the US which is the main security partner.”

Queensland Sugar chair Guy Cowan said Australia had been “a bit too frontal” in its rhetoric on China.

Mr Cowan, who is also a director of Santos and chair of Buderim Ginger, said the election of Joe Biden in the US may help to ease political tensions with China.

“Maybe Biden will stabilise the relationship,” he said. “But it will be with us for a while.”

He said China took a different attitude to public communications than Australia.

“I think we’ve been a little bit too frontal on it.”

AICD chief executive Angus Armour said he did not think there would be any reset in the near future.

“I’m less optimistic that we’ll have a reset in the coming 12 months,” he said. “I don’t think it’s in China’s interests to concede too quickly.”

He said he believed that China would respond to some positive overtures from the Australia but warned that they would need to be “considerable” to get a significant response.

Mr Armour said China’s President Xi Jinping and Australia’s Prime Minister Scott Morrison were “playing to the domestic audience as much as anything”.

He said he was “hopeful that, over a two or three year period, with sustained business overtures and considered political overtures, we’ll reach a better point.

“But I wouldn’t encourage people to think it will happen swiftly.”