Australia unveils South-east Asia trade plan as China doubts grow
AUSTRALIA is aiming to ramp up its engagement with South-east Asia in the face of rising trade and geopolitical uncertainties, and China’s slowing economy.
Prime Minister Anthony Albanese will use a speech to leaders attending the Association of Southeast Asian Nations forum on Wednesday (Sep 6) to unveil an economic strategy that calls for an extensive overhaul of Australian business, trade and education ties with the region.
“Australia’s trade and investment growth with the region have not kept pace with South-east Asia’s economic growth over the past 20 years,” according to the document. “South-east Asia’s continued economic success is critical for Australia’s prosperity and security.”
Despite its close proximity, Australia’s trade with South-east Asia is “very underweight,” according to a government official who asked not to be identified as they’re not authorised to speak with the media. Investment has “stagnated” in recent years in the face of surging interest from competitors, such as China, the official said.
Among the recommendations in the South-east Asia Economic Strategy are the creation of a whole-of-nation approach to tap into the region’s economic growth, a relaxation of foreign investment restrictions and greater Australian infrastructure investment.
Since Albanese’s centre-left Labor Party came to power in May 2022, Australia has moved to rebalance its diplomacy away from the tight US alignment of its predecessors. In a speech at the Shangri-La Dialogue in June, the Australian leader said it was the responsibility of both the US and China to avoid a spiral into armed conflict.
At the same time, trade sanctions imposed on Australian exports by Beijing in 2020 have driven Canberra to try to diversify away from China. Trade between Australia and Asean countries totalled more than US$81 billion in 2021, making the bloc a significant export market.
Still, Australian officials view South-east Asia as an underutilised economic partner, prompting the Labor government to commission the economic strategy. After the Asean Summit, Albanese will fly to the Philippines for the first official visit by an Australian leader in 20 years. BLOOMBERG
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