An ambitious plan aimed at maximising links with booming China and other Asian economies will power Australia into the world’s top 10 wealthiest nations by 2025, the government has said.
By engaging in more business with China and India in particular, Australia aims to lift Asia’s impact into its economy to one third by 2025, from 25 per cent now.
“Whatever else this century brings, it will bring Asia’s return to global leadership, Asia’s rise. This is not only unstoppable, it is gathering pace,” Prime Minister Julia Gillard said on Sunday.
The sweeping policy blueprint, titled “Australia in the Asian Century”, sets a series of goals for the next 13 years to seize upon Asia’s rapid ascent as a global economic powerhouse.
The plan has few specific policy announcements, but targets Asian tourism and greater expected demand for food and education to match Asia’s appetite for mineral resources that has fuelled a long mining boom in Australia.
It also targets more Asian investment into Australia and lower trade barriers, although does not recommend changing Australia’s foreign investment rules, which include intense scrutiny of planned investments from overseas state-owned firms.
Gillard said Australians had long seen Asia as a threat “racially, militarily and economically” but the region had changed dramatically in the past 30 years, demanding “new changes of us today”.
“It is not enough to rely on luck – our future will be determined by the choices we make and how we engage with the region we live in,” the prime minister said.
By 2025, Gillard said Australia’s GDP per person – a measure of personal wealth – would jump into the world’s top 10, joining the likes of Qatar, Singapore, Hong Kong, Brunei, the United Arab Emirates and the US.
It is currently ranked 13th according to the International Monetary Fund, which calculates the gauge by dividing goods and services produced by a country by its population and adjusting for the relative cost of living and inflation.
Australia dodged recession during the financial crisis due to its links to Asia but the mining-powered economy slashed its growth and surplus forecasts last week as China’s slowdown hits commodity prices.
Gillard said her vision was for Australia to “stand strongly as a mature and confident power” in the region, supporting greater participation by China and other Asian powers in decision-making while remaining a key US ally.
“We accept China’s military growth is a natural, legitimate outcome of its growing economy and broadening interests,” the policy document said.
Australia will have to balance its defence and security ties to the US with supporting China’s military growth and stronger role in the region, the document said, adding that any policy aimed at containing China would not work.
“We are supporting the stabilising presence of the United States, a strong defence force, building habits of trust and co-operation in our region and a rules-based regional order,” the prime minister said.
Gillard said China, India, Indonesia, Japan, South Korea and the US would be Australia’s key partners, and the rise of Asia’s middle classes would bring opportunities in industries from health and care for the aged to food and travel.
Education and business were key areas for goal-setting – by 2025 Gillard said Australia’s school system would be in the top five and it would have 10 of the world’s 100 best universities.
Studies of Asia would be a core part of the national curriculum and Mandarin, Hindi, Indonesian and Japanese were to be “priority” languages.
Treasurer Wayne Swan said the Asian region would soon be the world’s largest production and consumption zone and was set to overtake the economic output of Europe and North America combined by the end of this decade.
Average personal wealth in Asia was set to double by 2025 and even the most conservative projections predict four of the world’s 10 largest economies will be in Asia by then, Swan said.