When Tim Chen, the head of Telstra’s international operations introduced a group of influential Chinese business leaders to his chairwoman Catherine Livingston and chief executive David Thodey, he described the head of delegation Dr Ma Weihua as “a legend”.
Ma, the former chief executive of the China Merchant Bank and executive chairman of China Entrepreneur Club, whose members include industry captains like Jack Ma of Alibaba and Liu Chuanzhi of Lenovo, is one the country’s most highly regarded bankers.
Tim Chen said Ma managed to turn China Merchants Bank from a small regional bank into a banking behemoth in little over a decade. Its balance sheet is actually larger than the Commonwealth Banks’. China Merchant Bank is known for its innovative product offerings as well as high quality customer services.
Ma led a delegation of the country’s most influential private sector business leaders to visit Australia at the request of the Prime Minister of Tony Abbott. During their visit last week, they met with senior cabinet ministers and leading Australian business leaders from companies like Telstra, Commonwealth Bank and Macquarie.
In a wide-ranging interview with China Spectator, Dr Ma talked about the future of economic relations between Australia and China, Commonwealth Bank’s China regional strategy, the future of Sydney as an offshore RMB hub and the contentious issue of foreign investment into Australia’s agricultural sector.
First on the topic of Sino-Australia cooperation, he is upbeat about its future prospects. He says the relationship is not only unique but also complementary, citing Australian export figures to China from wool to iron ore. “China needs Australian resources for its industrial development,” he said.
However, he urges both sides to look beyond traditional sectors such as resources for emerging opportunities in technology, services and agriculture. During the delegation’s visit, they met with chief executives from leading Australian medical companies such as Cochlear and CSL.
Ma and his fellow business leaders are clearly impressed by Australian technology. “Australia has some good technologies, but the home market is simply too small. However, if we can marry Australian technology with the Chinese market and capital, these companies will be become much more valuable,” he said.
However, they have been dismayed at Australian’ dairy industry’s apparent reluctance to lift its production in the face of soaring demand from China. Ma says I don’t think they fully appreciate what the Chinese market can offer.
“At the moment, only 19 per cent of Australian dairy products are exported to China and we can easily absorb 100 per cent of Australian production,” he said, “In the past, the industry focused too much on developed markets like Japan and the US.”
He says Australia needs to look at New Zealand as an example. The country has increased its export of dairy product to China eight times since signing free trade agreement in 2008. Australia’s milk production has stagnated for the past decade while New Zealand doubled its milk production. “New Zealand’s market share is much bigger than Australia’s,” he said.
Ma and his business colleagues have urged the Australian farming sector to be more open-minded about accepting Chinese investment. “In order to increase production, you must welcome foreign investment as there is an inadequate supply of funds here and farmers and companies must look out for opportunities to work with Chinese partners,” he said, “Some companies are too conservative. Though we have signed the free trade agreement, there are still a lot of doubters there.”
There is considerable Australian public antipathy towards Chinese investment in Australia and especially in agriculture. According to the 2014 poll from the Lowy Institute, 56 per cent of those surveyed think the Australian government allows too much investment from China. It is the third largest investor behind the US and UK.
Ma explains he understands Australia’s anxiety. “We had similar concerns before when we joined the World Trade Organisation. However, with the benefits of hindsight, we made the right call and a lot of concerns at the time seem overblown and unnecessary,” he said.
Compared to the dairy sector, Ma thinks Australia’s wine industry is much more open about exporting to China as well as accepting foreign investment. During their visit, they called in on Treasury Wines’ headquarters in Melbourne.