James Riley
March 14, 2016

IP issues loom in ChAFTA upside

IP issues loom in ChAFTA upside

Andrew Robb: China remains a big opportunity for Australian tech

While Australia’s newly-appointed Special Envoy for Trade is singing the upside of ChAFTA for local services firms, he concedes IP issues remain a tricky issue for tech.

But Andrew Robb insists these challenges are “not insurmountable” and should not be allowed to blind Australian companies to the opportunities that exist.

Mr Robb, the former Trade Minister who will retire from Parliament at the next election, said China was becoming more sensitive to IP issues as its own tech companies emerged on the international stage, and as its domestic economy moved to consumption-based growth.

He said Australia tech companies should not be discouraged from the market, but needed also to be sensible: Do the preparation, understand the protections that are currently available, and be prepared to move fast.

China in recent times had begun to “apply serious attention” to IP issues in the domestic context, because lax protection were starting to create a material disadvantage to its own IP producers.

“It doesn’t mean that you will find the level of protection that you’ll find in other more developed countries, but if you are fleet of foot and if you have got what protections you can built into your systems [you can feel comfortable], Mr Robb told InnovationAus.com.

“Mainly if you can move quickly and stay ahead of the pack, that is historically the best way to be successful. The developed world has been through these stages [of lax IP protections] themselves at various stages of their development,” he said.

“IP is just another risk for business. But it should not be considered an insurmountable risk.”

Speaking at a function hosted by the UTS Business School’s Australia-China Relations Institute last week, Mr Robb said ChAFTA superbly positioned Australia to take advantages of the strong growth of the services sector in China.

“ChAFTA entrenches our competitive advantage where we’ve traditionally been strong, and opens new doors to diversify, especially in regard to services, agriculture and high end manufacturing.

He points to five areas of comparable advantage: Resources and energy, agriculture and agri-business, healthcare and aged care, international education, and tourism.

But he adds to this a full range of service industries that can be taken to the China domestic market, ranging from financial services, engineering, and architecture, to waste recycling, to aged care facilities.

“We are as a developed economy, overwhelmingly services-based, and this is where – in my view – our big export opportunities will be.”

“That will be especially true of Asia. This is where the drivers for global economic growth are coming from – our own backyard.”

Mr Robb has rubbished mainstream commentary that is apprehensive about the slowing growth in China and the sluggish global economy. This commentary had combined with the end of the mining and energy boom had led to international investment managers to go “underweight” in Australian stocks.

“Australia is being judged as simply an economic derivative of China,” Mr Robb said – a superficial analysis that misrepresents the challenges that China faces, and presents a misleading interpretation of China’s growth numbers.

“In 2000, China’s GDP was around US$1.2 trillion with growth at about 10 per cent, or roughly growth at roughly $120 billion for that year,” he said.

“Today, China’s GDP is nearly ten times the size it was back in 2000, at close to $12 billion, with growth rates of about 6.5 per cent. This growth rate delivered growth last year valued at US$800 billion, compared to the US$120 billion at the turn of the century.

“The International Monetary Fund reports that China still adds an economy around the size of Turkey’s to the world every year,” Mr Robb said.

Meanwhile Australia’s newest Special Trade Envoy says the cybersecurity market is a huge opportunity for Australia.

“As an issue, cybersecurity has emerged as a big issue not just for governments, but also for the business sector. The thing is that – and I’m not sure how this happened – but Australia is featuring prominently in helping to drive a lot of this new cyber technology.”

“So we have a place at the table now, and we have to work to maintain that place,” he said.

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