White paper to seek stronger ties with booming Asia

 

Photo: Ken Henry will lead the task force to look at better ways 

for Australia to engage with Asian countries. (Alan Porritt: AAP)

Former Treasury chief Ken Henry will head a taskforce to map out Australia's economic and strategic engagement with Asia and recommend ways to profit from its proximity.

Dr Henry's white paper will look at ways to engage better with Asian countries and strengthen economic, cultural, defence, research and business links.

Prime Minister Julia Gillard says Australia needs a long-term plan for responding to the rise of Asia and should target India and China as key customers.

Ms Gillard says India's purchasing power is set to overtake the United States by mid-century, and the market in Asia appears almost unlimited.

"While Asia's rise has been with us for a lifetime, China and India remain relatively poor countries in per capita terms, with decades of growth ahead," she said in a speech in Melbourne.

"These changes have barely begun. These changes will define our future."

Ms Gillard says Australia no longer suffers from the "tyranny of distance" from world markets.

"Asia has turned this on its head, giving us what The Economist has neatly termed 'the advantage of adjacency'.

"For the first time, we are closer to the fastest-growing and most economically dynamic region of the world than our competitors."

Ms Gillard says the 20th-century economic powerhouses of the US and Japan are likely to be eclipsed by the emerging Asian nations.

"For all the strength and resilience of Japan and the US, we are now seeing the most profound rebalancing of global wealth and power in the period since the US emerged as a major power in the world," she said.

"Just one illustration of that shift: the emerging and developing world could well be a net foreign investor, while developed countries become net foreign borrowers, as early as 2025."

Describing Dr Henry's task as "substantial", Ms Gillard says the result must be a whole-of-government response to maximise opportunities to engage with Asia.

"The White Paper on Australia In The Asian Century should generate a set of general propositions to guide policy development over the long term."

The white paper process will be overseen by a cabinet committee and is due to report by the middle of next year.

Federal Opposition foreign affairs spokeswoman Julie Bishop says she is not convinced the white paper will elicit much change.

But she says she hopes it results in tangible outcomes.

"Dr Ken Henry's last policy effort, the Henry Taxation Review, is still gathering dust in Wayne Swan's office nearly two years after it was completed," she said.

"I hope that this white paper is not yet another effort to divert attention away from the woes of the Gillard Government."

Posted in: World business