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Wednesday, 26 June 1996
Page: 2269

Senator WEST(4.02 p.m.) —I am delighted to be able to participate in the tabling of this report and to speak on it. This is one report that the Senate can stand well proud of. It is one that has taken some considerable time, but I think the content is such that it will be of vital importance and of great value and benefit to many people who are doing business with China and many people who are interested to know more about the great country that it is.

I was one of those fortunate enough to be invited to visit the country. I welcome having taken that opportunity. It certainly gave me a greater understanding of the country, the customs and the variety within the country. It is a very large country—in fact, larger than Australia. It has a population in the order of 1.2 billion, but its land formation is such that the people are able to live on only 10 per cent or less of it.

The terrain of the country is very harsh. We talk about our harsh terrain here, but they have mountains that cover large areas, including an area which is part of the Himalayas. That harsh terrain adds to their logistics, infrastructure needs and infrastructure variation. One thing that struck me very greatly was the difference between the infrastructure available in Lanzhou, which is in Gansu province in the middle of the country, and the infrastructure around Beijing, Qingdao, Shenzhen and Shanghai. They were vastly different—like cheese and chalk.

I recall the trip by bus from Lanzhou airport to Lanzhou town. The road was under repair, and we took an hour and a half to get to the town and an hour and a half to return a couple of days later. I also recall that the trip caused someone's bottle of mai tai to break, and the smell of mai tai through a bus at five in the morning is not one I would recommend to many people. It is not particularly nice.

The trip did give us a very good understanding of the infrastructure variation that exists in the country and the problems this causes when moving produce and commodities from one side or end to the other. Those problems are dealt with in the report, and they indicate why the coastal regions trade offshore. It is in fact easier for them to import a number of goods and commodities to work with than actually bring them from the far side of the country. That is a very important point to remember.

To the committee secretariat who helped us, I say thank you. To the three members of the committee who after midnight on Sunday will no longer be members of the Senate, I say that I have enjoyed working with the three of you. I have enjoyed your input and our conversations, stories and times together.

There are 23 recommendations in the report. The one I would like to deal with is recommendation 7, which states:

. . . the Committee recommends that the Government reconsider the decision to cease the Concessional Finance Facility (CFF) program in China, taking into account the affect such a move would have on Australia's wider economic and political interests and Australia's humanitarian efforts in China.

The CFF, as this program is called, is actually part of the DIFF program, and DIFF has certainly been causing some interest in the other place. A lot of evidence before us stated that this program had been a major benefit to both China and Australia, and that is very important.

A commercial review was done on Australia's aid program to China. It found that the return on every $100 of official development assistant—called ODA—was close to $300. The review stated:

Some $285 million in development assistance between 1981 and 1992 generated total business of $883 million.

They are the sorts of benefits that this program has given to Australia, but there have been follow on benefits as well. Because our companies have been in the country and worked with the people, there has been follow on business, with no assistance from the government or anything like that attached to it. Those companies have been able to get the foothold they need with the assistance from this program, and then expand their business into that country with a very beneficial effect.

The Australia-China Chamber of Commerce was alone in raising the issue of community development and the pursuit of commercial objectives. They called for the balance to move further towards the commercial side, despite the program having moved in the right direction over the past five years. However, they stated that Australia's development assistance must continue to fulfil community development obligations as well as be trade focused.

We heard stories of a desalination plant project undertaken by Memtec in Lanzhou. That is just one. Ausmelt were involved in others. That part of chapter 6 is well worth reading. The committee is not convinced there is a pressing need for Australia's development assistance program to become more trade focused than it already is. We think that it has a good balance, but we do not want to see the CFF program reduced, diminished or changed. We also noted that, of the 1994-95 program budget to AusAID, which totalled $98 million, over half, $58 million, was designated for CFF projects which would assist Australian companies.

We are gravely concerned that the government has reported that it intends to cut this program because in doing this report we were given first-hand evidence of the value of this program in two ways. It is of value to the Australian companies who use the program to provide assistance to a country and then follow up with follow-on projects, and it is of value so far as the development of a country that receives that assistance is concerned. I urge members of the Senate and everyone to very carefully read and digest this section and to wholeheartedly support recommendation 7.

Once again, I take this opportunity to thank everybody who has been involved with the project and this committee report. It has been one of the most enjoyable and fulfilling ones I think I have ever undertaken. We went to China in April 1994, and in September of last year I had a chance to visit China again for the women's conference. It was interesting to see how much less restriction there was and how much freer the area around Beijing was 18 months later.

We had the opportunity in September of last year to move freely around Beijing, to use the taxis and the private and public sector transport systems, and to experience, I suppose, part of the traffic problems now being inflicted upon not just Shanghai, which we experienced when we were there in April 1994, but also Beijing. I have a great love for the country and look forward to being able to return to see what is happening.