Turnbull under fire as Peter Costello warns of ‘strained’ China ties

Leaders have questioned the Turnbull government’s approach to China as Peter Costello says the relationship is ‘strained’.

Former treasurer Peter Costello. Picture: AAP

Australian business leaders have questioned the Turnbull government’s approach to China after its snub of a major economic forum, as former treasurer Peter Costello warns that the relationship between the two countries is “strained”.

Mr Costello said yesterday that in the 10 years he had attended the Boao Forum for Asia conference, Australia had always had high- level ministerial representation, which had included prime ministers, foreign ministers, finance ministers and trade ministers.

“Australia has always taken the Chinese relationship very seriously and it still does, but the lack of ministerial contact does show the relationship is strained at the moment,” he told The Australian on the sidelines of the event.

“We go through these periods. It was strained during the Rudd years and we managed to patch things up again and it is strained at the moment and I hope that we manage to patch things up again.”

Delegates at the forum that The Australian spoke to remarked that the relationship between Australia and China was at the lowest point it had been in recent history, with one senior businessman saying it was now worse than the Rudd years.

The Australian government did not send a minister to the event — where Chinese President Xi Jinping gave a landmark speech — with Finance Minister Mathias Cormann in Washington, Tourism Minister Steve Ciobo at the Commonwealth Games and Treasurer Scott Morrison preparing for the May budget.

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The Australian reported last week that Western Australia’s ­Regional Development and Agriculture Minister, Alannah Mac­Tiernan, a former Labor federal MP, could not get a visa to attend the conference, which she blamed on souring relations with China.

A respected senior Chinese Australian businessman questioned the Australian government’s approach to its largest customer.

“There was a calibre of regional leaders at the forum and also heads of other Western nations … given we are the dominant Western nation in this region it is a pity senior government officials were not there,” the businessman said.

He said business deals would still be done, but it would be good to have the support of the government.

Craig Meller, the chief executive of AMP, which has a partnership with China Life, said it was important that Australian businesses still engaged strongly with China.

“We are not protectionists, we are global citizens and we want to do business with the Chinese and our doors are open to doing that,” Mr Meller said.

Mr Meller, who attended the forum, said AMP was now doing more business in China than its Chinese partner did in Australia.

“It is important that our partners, and the Chinese authorities more broadly, are aware of our enthusiasm to continue to work and do business in China,” he said.

“In Chinese culture relationships are very important, so the great opportunity of an event like Boao is to strengthen the relationship you have with your Chinese partners.”

Former Australian foreign minister Bob Carr, who attended the conference in Hainan ­province, said Australian leaders had gone out of their way to sound negative about China.

“Why are we dealing ourselves out of the Chinese economic narrative?” Mr Carr asked. “We have positioned ourselves as being the most adversarial to China of any of America’s allies.”

Fortescue Metals chief executive Elizabeth Gaines said there had been other forums that senior government officials did not attend, adding that there was a strong list of business leaders who attended yesterday’s Australia-China Business Leaders Dialogue.

But Ms Gaines did raise questions about the Australian government’s cool response to China’s Belt and Road Initiative. She said it was “curious” that Canberra had not been “more embracing” of what she said was an important ­initiative.

“It is about investment and infrastructure investment and we think that is a positive, certainly for our sector,” she said.

“Given Australia has such a strong export sector and so much of it is in natural resources we think that would be a positive.”

Ms Gaines said the annual forum in the Hainan province had heard from leaders from other countries who were implementing changes to encourage investment in the trillion-dollar infrastructure initiative.

“There is an opportunity for Australian companies to participate in Belt and Road,” she said.

Ms Gaines also pointed to the positive outlook for Australian businesses deepening ties with China, highlighting that a key message in Mr Xi’s landmark speech to the conference included broadening market access in ­financial services, insurance and manufacturing.

“On the financial services side, the term loan we just implemented with a syndicate of Chinese banks, which followed a leasing facility for the ore carriers and our revolving credit facility, is a demonstration that openness is already occurring,” Ms Gaines said.

“We had been looking to shift our funding source purely away from the US capital markets because China is a big customer for us and we see our linkages as being multi faceted and not just selling iron ore.”

The reporter travelled to the Boao Forum for Asia as a guest of Fortescue Metals Group.