THE ASIAN CENTURYANDREW LEIGH AND LISA SINGH LOOK AT THE IMPLICATIONS FOR AUSTRALIA

n the twenty rst century, we can con dently predicttwo trends. First, Australia will become more ethnicallydiverse. And second, we will become more enmeshed

with Asia. The next generation ofAustralians will be morelikely to have been born in Asia, travelled to Asia, workedin Asia, or married someone from Asia.

Thats why the Asian Century White Paper, which thegovernment has commissioned from former TreasurySecretary Ken Henry is so important. Rapid economicgrowth in China and India isn't just drawing millions ofpeople out of poverty its also placing Australia closerthan ever to the economic centre ofgravity ofthe worldeconomy. This isnt just a mining story (Australias serviceexports to China exceed our coal exports), its a story thatilluminates the evolution ofour national character.

We believe that the Asian Century has five bigimplications for Australia.

First, we should focus on the opportunities. not thethreats. Straightforward trade theory tells us that Australiawill be most prosperous ifwe focus on our comparativeadvantage the things we do better than other nations.This means that as the outputs ofother countries change,it will invariably affect our comparative advantage.

8 H Australia's Engagement with Asia

Managing industrial transformation is an importantchallenge for our nation. It is also important that wemaintain a bipartisan conversation about how structuralchange is vital if we are to continue increasing livingstandards. Every day, thousands ofAustralians lose theirjobs, and thousands nd a new job. No governmentcan or should try to prevent every job loss. And noopposition should seek to block change by engaging inpartisan politics over job churning.

We must acknowledge that Asia is ourmost signi cant export destination, and that

eight of our top ten trading partnersare already in the Asian region.

it is often said that Australia is competing with Asia.But in our reflections on industrial change, we mustacknowledge that Asia is our most signi cant exportdestination,and thateightofour top ten trading partnersare already in the Asian region. Demands for serviceslike education, tourism and technical expertise. andgoods like highquality agricultural produce, will onlyincrease as the preferences ofconsumers adjust to theirnew middle-class status. The OECD projects that theproportion ofthe worlds middle class residing in Asia willincrease from 28 per cent in 2009 to 66 per cent by 2030.The growth of the Asian middle class means a massiveincrease in consumption and spending on importedgoods and services, the supply ofwhich Australia is wellplaced to provide.

Second, we should revitalise the push for a Republic.As the only AngloCeltic country in the Asian region, wehave an extraordinary opportunity to harness the rise ofAsia. Yet there is a mentality that when we punch outat the end of our time working in or visiting China, wecome safely home to the Anglosphere. For example, only20 per cent ofAustra1ians currently working in China canspeak Mandarin. Our political and cultural institutionsreflect an attitude in which Australia is a dcpciidant ofthe British crown. Despite the worlds economic centreof gravity shifting towards the AsiaPaci c, the notionstill persists that Australia is located in the antipodes,far away from where the important decisions are made.We can no longer afford to think of ourselves as simplyvisitors to this region, when it is from this region thatthe future will be shaped. By becoming a Republic, wewould be able to stand proudly independent ofthe UnitedKingdom, and announce to our neighbours our readinessto be involved in our region.

Third, we must improve the Asia literacy of allAustralians. Increasing Australias skill base in Asianlanguages must be a strategic priority. Better languagecapacity is crucial to trade negotiations, and to picking

issues in Society l Volume 280