China key to our prosperity, says BCA

The BCA has urged the nation to capitalise on the economic opportunities offered by the rising Asian middle class, expected to reach 3.5 billion people by the end of the decade.

Actors perform to celebrate the 100th anniversary of the founding of the Chinese Communist Party at the Bird’s Nest Stadium in Beijing on Monday. Picture: Getty Images

The Business Council of Australia has urged the nation to capitalise on the economic opportunities offered by the rising Asian middle class, expected to reach 3.5 billion people by the end of the decade.

BCA chief executive Jennifer Westacott also said getting the relationship right with China was “hugely important”, arguing that Australia would not achieve its ­desired economic or productivity growth goals without a strong and ongoing trading relationship with the communist nation.

In its Living on Borrowed Time report on Australia’s economic ­future, the BCA says Australia should take advantage of new ­industries and products in Asia, warning that a failure to act on this front will lead to Asian economies attracting new industries and trading elsewhere.

“The higher-paying jobs that go with this growth will slip through our fingers,” it warns.

“Our opportunity could pass and Australians will be left with a second-rate economy.”

The BCA argues for increased collaboration between universities, businesses and governments in the development of new technologies and innovations to help secure a foothold in vital overseas markets. It is also pushing for more effective regulation to attract rather than deter foreign investment, especially in the digital sphere.

Ms Westacott said the role of China would be critical because “you can’t imagine we’re going to get these productivity numbers, these growth numbers if we don’t have a strong trading relationship with China”.

She also stressed that the trade diversification agenda should not be seen as “diversification away from China – it’s diversification to other things”.

“Part of the diversification of the economy is not just to rely on the over-reliance on particular markets – it’s the narrow reliance on a few things that’s as worrying as the narrow reliance on particular markets,” she said.

Ms Westacott said the China relationship was complex and a long-term view was necessary. “You’ve got to try and preserve those economic relationships … particularly the business-to-business relationships,” she said.