Australia, China still keen on resuming trade and investment after diplomatic thaw: mining tycoon

There have been many ‘expressions of interest’ by Chinese businesses to work with Australia, mining billionaire Andrew Forrest says at Boao Forum
The tycoon calls for countries to work together to tackle climate change, and says China can be a leader in creating ‘renewable energy’ supply chains

China-Australia relations

Su-Lin Tanin Singapore

Published: 5:51pm, 31 Mar 2023

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Australian and Chinese businesses have “weathered the storm” of a three-year bilateral conflict to reveal a mutual desire to resume trade and investments, mining billionaire and Australia’s richest man Andrew Forrest has said.

Speaking from the Boao Forum for Asia conference in the southern Chinese province of Hainan on Thursday, Forrest said the reception from Chinese businesses was strong and there had been many “expressions of interest” by Chinese businesses to work with Australia.

“The appetite [to work together] never went away,” he told This Week in Asia. “I am grateful we weathered that storm.”

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Forrest also acknowledged the challenges Australian business leaders faced as they had to “keep their heads down” when the former Morrison government clashed with Beijing in the past three years.

The chair of iron ore miner Fortescue Metals Group, a major iron ore exporter to China, was among some who had come under fire for defending the importance of Australia’s economic relationship with China.

Forrest has continued to play a key role in maintaining Sino-Australian relations despite ongoing political tensions. Fortescue Metals is heavily invested in China and makes nearly 90 per cent of its revenues from there.

His trip to Boao, or the “Asian Davos”, is one of the first to China by an Australian business leader since the country reopened its borders. It follows efforts by the new Albanese government to “stabilise” bilateral relations after they nosedived in early 2020.

Australian Foreign Minister Penny Wong speaks to the media during a visit to Beijing in December 2022. Photo: EPA-EFE

Ministerial-level visits between the two countries are resuming, with the first trip kicked off by Australian Foreign Minister Penny Wong last December.

But troubles between China and Australia are far from over. On the sidelines of the forum, vice-commerce minister Wang Shouwen voiced his concerns to his counterpart, Australia’s Assistant Minister for Trade Tim Ayres, about Australia’s heightened screening of Chinese foreign investment interests in Australia and warned that “national security” should not be abused.

Last month, Australian Treasurer Jim Chalmers blocked Chinese fund Yuxiao from increasing its stake in Australian rare earths producer Northern Minerals amid a series of pushbacks against Chinese investments in recent years, including Huawei Technologies’ 5G network.

But, Forrest was confident bilateral ties had improved beyond “stable”, and this is despite the recent unveiling of Australia’s new submarines under the Aukus security pact, which has been widely seen as a means of countering China.

The messaging of Aukus was important, Forrest said, emphasising that while every country including Australia had a right to build its own defence, it would be “unthinkable” if Aukus submarines were used as an “attack system”.

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Crucially, such geopolitical squabbling needed to be set aside in light of bigger threats such as climate change, Forrest added. Countries must abandon the desire to form “economic and political” blocs.

“That will really harm our children … and the behaviour itself will be seen as vacuous, ignorant shortsighted, and visionless, when the world is suffering from global warming,” he said.

“They had the opportunity in this critical decade to pull the handbrake on it and didn’t because of geopolitical insecurities that just have no bearing on the enormity of climate change.”

Forrest, Australia’s biggest renewable energy player, has been changing Fortescue’s direction from miner to clean energy leader with a focus on fuels like “green hydrogen”.

To act on climate change – described as urgent by Forrest – the world must come together to create “renewable energy” supply chains.

A man looks at a display of Australian wines in Shanghai, China. The new Albanese government has made efforts to “stabilise” bilateral relations after they nosedived in early 2020. Photo: AP

Forrest said his tour of industrial China, including Hunan, Shaanxi, Jiangsu and Beijing, before Boao revealed opportunities for China to play a key role in these supply chains especially in the provision of equipment and machinery.

He urged Asian companies, particularly Chinese ones, to form joint ventures globally that would establish these networks.

Forrest himself started on that initiative through his backing of renewable energy firm Sun Cable, the company behind the A$30 billion (US$20.1 billion) Australia-Asia PowerLink that had planned to channel solar energy from Australia to the Asia-Pacific region, mainly Singapore.

The company entered voluntary administration earlier this year but could still resurface through new sources of funding.

“We are talking wind tower generators, we are talking solar power generation, we are talking batteries, we are talking electrolytes; the whole system required to get fossil fuels out of our demagogue system to get into a peaceful world,” he said.

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Speaking alongside other key speakers including Singaporean Prime Minister Lee Hsien Loong and Malaysian Prime Minister Anwar Ibrahim, Forrest used a speech at Boao’s opening plenary on Thursday to urge China, a key player in many of the world’s supply chains, to step up to the challenge of bringing the world together through climate action. New Chinese Premier Li Qiang opened the session in his first public address since taking up the post earlier in March.

“Switching to renewable energy will lead to unprecedented economic growth, full employment, and material improvement in the standard of living of all citizens. China, more than any other country, can lead this decisive action,” he said.

“We must focus on our agreements and similarities and set aside our differences – for the future of all our children. China, we rely on your success, your leadership and your incredible ability to plan and deliver.”