Australia and the Asian miracle – comment by CEO Craig Robertson

I was privileged on Friday to be the guest of the Chinese Ambassador to Australia, His Excellency Mr Cheng, in the celebration of 40 years of China’s opening to the world.

Guest speaker, Andrew Robb, former minister for Trade, congratulated China on its truly remarkable journey. Mr Robb acknowledged that while our countries hail from different economic and political systems, dialogue and understanding is key to our ongoing relationship.

The exhibition of China’s journey is at 151 Castlereagh Street in Sydney and is open to the public. I was taken by one photo of Deng Xiaoping, the Chinese leader of the 1980s recognised as the author of the economic reforms. He is quoted as pursuing the reforms for the ‘emancipation of the productive forces’.

Political scholars will point out this quote’s antecedent to Marxist philosophy. Regardless, China’s opening has seen the lifting of 500 million Chinese out of poverty and 300 million into the middle class. Truly remarkable.

Why was I taken? In his book, The Future is Asian, Parag Kannah describes the world as an amalgam of the artefacts of the European nineteenth century, the American twentieth century and the Asian twenty-first century. His Asia has nearly five billion people, three-and-a half billion of whom are not Chinese.

In our increasingly globalised world, triggered by China’s economic growth and the emerging middle class of Asia, global supply chains are growing in importance. A report from the OECD[1] describes the process nicely:

Since the 1990s, the world has entered a new phase of globalisation. Information and communication technology, trade liberalisation and lower transport costs have enabled firms and countries to fragment the production process into global value chains (GVCs): many products are now designed in one country and assembled in another country from parts often manufactured in several countries.

The learning, research and skills from our tertiary education system will increasingly be exercised within these chains. But it appears we are not doing well. In its Scoreboard on skills and global value chains Australia is ranked in the lowest quartile of OECD countries in Developing skills to face the challenges of GVCs and Specialised in tech advanced industries and Increasing specialisation in tech for developing GVCs. And remember, most Asian countries are not ranked as they are not OECD members!

The OECD highlights the importance:

GVCs give workers the opportunity to apply their skills all around the world without moving countries: an idea can be turned into a product more easily and those who are involved in production can all benefit from this idea.

When we develop our qualifications do we keep an eye on developing skills capabilities to engage in GVCs? It’s important that we do. In this the Asian Century there’s plenty of other economies and skilled up workers willing to step in our place.