‘Don’t confuse China trade with security’, says Andrew Liveris

The head of Scott Morrison’s manufacturing taskforce has called on the government to adopt a less confrontational public approach to dealing with China.

Former Dow Chemical chief executive Andrew Liveris. Picture: Lyndon Mechielsen

The head of Scott Morrison’s manufacturing taskforce has called on the government to adopt a less confrontational public approach to dealing with China, saying it would be a mistake to confuse Australia’s “economic interests” with its “security interests”.

Andrew Liveris, former chief executive of global giant Dow Chemical, during a speech at the National Press Club in Canberra also told energy investors to stop “whingeing” about the threat of government intervention.

He said $4 a gigajoule for gas on the east coast remained a viable target, despite producers rejecting the price as unrealistic.

Amid what experts say is a low point in the political relationship between Australia and our largest trading partner, Mr Liveris advocated for Australia to conduct sensitive discussions around ­political and security matters in private. “China is a really good listener and they have a culture where saving face matters, so you don’t want to embarrass (them),” he said. “You have to be very careful with how you say things, and what you say.

“When we confuse mercantile interests with what are issues of principle, that’s when we get into trouble. We need to keep diplomatic channels wide open, to speak frankly and to speak our mind in private with China’s government about what we believe, what our standards are, what our values are.

At the same time, we need to keep the flow of trade moving between our two countries. Both of these things can and must be kept in balance.”

As diplomatic relations plumb new lows, the trading relationship has reached new peaks, with more of Australia’s exports than ever flowing to China.

The director of engineering group Worley said with an economy so dependent on the Asian giant for its prosperity, Australia “has to diversify, so we’re not put into a compromised position”.

“We need to immunise ourselves against over-reliance on one country. Australia cannot become more resilient if it remains a one-trick pony in trade.”

Mr Liveris said Australia should expand its trade relationship with ASEAN countries and India while “also building a manufacturing sector based on advanced technologies”.

He said it was “atrocious” that manufacturing as a share of the national economy had fallen below 6 per cent, and the Prime Minister’s newly announced gas plan was critical to reinvigorating local ­industry. Lowering the price of gas for manufacturers to $4/GJ would be a game-changer for many gas-hungry manufacturers, he said, many of which had been forced overseas because of high energy prices.

Energy Minister Angus Taylor said on Tuesday the private sector had until April to commit to build 1000MW of new power capacity to ensure there was a like-for-like replacement for AGL Energy’s Liddell coal plant, which will close down in the 2022-23 summer.

Mr Morrison has said the government was ready to make that investment itself if the market failed to come to the table.

Mr Liveris on Wednesday said this ultimatum was “a challenge to the private sector: stop whingeing and show us what you can do”.

The energy industry has said a $4GJ gas price objective is unrealistic, and it costs more than that to simply extract the resource.

Mr Liveris said the claims were based on incomplete data, and his manufacturing taskforce’s work across the industry suggested the $4/GJ target was achievable, given the right settings.