Lucy Hughes Jones
(Australian Associated Press)
Darwin Port chief executive Terry O’Connor knows foreign investment is a hard sell in Australia, but he says tapping into Asia’s growing middle class will be critical for the economic growth of the nation.
A year ago Chinese-owned Landbridge won a 99-year lease of the port, sparking concerns from within Defence about the firm taking control of what could be considered a sensitive asset.
And former federal trade minister Andrew Robb recently ignited controversy when it was revealed he’d joined the company as a senior economic adviser.
“The political noise will continue to reverberate for a while yet,” Mr O’Conner said.
“I lived in Queensland when the Japanese arrived, and anyone who went through that episode would have seen the fear in the faces of everyone every time a bus load of Japanese tourists showed up.”
Mr O’Conner said Chinese billionaire Ye Cheng paid $506 million to lease Darwin Port because he knows the increasing wealth and changing dietary tastes from Asia’s middle class will power demand for Australian produce.
“Welcome to the maritime Silk Road. The presidents of America and China don’t talk about Melbourne or Sydney, they talk about Darwin. It’s a strategic position,” he said.
“We’re Australia’s Asian port. We are in Asia, whether the rest of Australia accepts it or not.”
Speaking at the launch of ANZ’s Opportunity Asia report, Mr O’Conner said foreign money is critical for developing northern Australia.
Asia’s middle class is estimated to grow to three billion people by 2030, up from about 1.7 billion today, ANZ General Manager Regional Business Banking Christine Linden said.
China is tipped to become the world’s largest economy in 2025, and more than three quarters of China’s urban households will approach middle class status before the decade is out.
Meanwhile, Indonesia is forecast to become the world’s fifth largest economy by 2030.
“You’re the gateway to Asia. Being on the region’s doorstep plays significantly to the Territory’s food production credentials,” Ms Linden said.
While on a trade mission to China, Japan and Korea last week, NT chief minister Michael Gunner announced Landbridge had bought a logistics park in Darwin to new host cold stores and warehouses.
The ANZ report shows trade into Asia from Australian rural businesses has increased 85 per cent in the last eight years, outpacing metropolitan-based firms.
It also predicts the majority of Australia’s export growth over the next 10 years to come from regional Australia, with agriculture set to be a significant player.
Ms Linden said China bought $90 billion of Australian exports in 2014/15 – more than a quarter of Australia’s total exports.
Mr O’Conner also flagged tourism as a critical growth area in the next 10 years, adding that in 2017 Landbridge’s Mr Cheng wants to spend $250 million on a luxury hotel and a new cruise ship terminal in Darwin.