What happened to the Asian Century?
After great introductory fanfare, the Asian century was meant to be all things to those who traded in Asia. But have events turned out that way? This article says yes and that opportunities continue.
Naysayers tell us that one can only trade successfully in Asia by being “entrepreneurial, risk-taking and innovative”. That’s not the experience of those engaged with Asian clients in law.
Sydney Morning Herald economics writer Matt Wade recently said that Australia will not thrive in the Asian century if it remains complacent and risk-averse. He said we must be “bold and inventive” if Australia is to flourish in the Asian century, “somehow enlivening the entrepreneurial risk-taking and innovative culture”.
Since the 1990s, Australia has been risk-averse. That might be because of the GFC, tighter banking and regulatory laws or maybe lenders stopped lending for speculative deals as they once did. But nowadays we are a conservative, risk-averse lot and regulatory compliant. Rogue commercial practices are down, commercial morality is up and people usually live within their means. By definition, being risk-averse is counter intuitive to being “entrepreneurial, innovative and risk-taking”. According to Matt Wade, being conservative and risk-averse, we would struggle in the Asian century.
Yet a huge portion of Australia does interact with Asia in business, the Victorian Bar included. Does that mean we are being “entrepreneurial, innovative and risk-taking”?
Undeniably, in parts of Asia corruption still presents a major obstacle to Australia completely embracing bilateral trade relations. Recent news of Su Shunhu’s life imprisonment for corruption provides an illustration. Su Shunhu, chair of a major Chinese railway concern, was convicted of receiving bribes exceeding 25 million yuan for giving preferential access to rail freight networks. He gave his son and daughter-in-law most of the money and they in turn spent it buying several multi-million dollar properties in Sydney. The Chinese anti-corruption authorities pieced together the flow of funds then arrested Su Shunhu.
In recent years obtained funds from corrupt conduct, flowing out of China and into assets in other countries including Australia, have totaled over $US 2.8 trillion. The Chinese government has raised concerns with Canberra about Australia being a particularly popular venue where corrupt Chinese officials can dump tainted money.
A large number of risk-averse Australian commercial entities trade with Asia very prosperously without having to be “entrepreneurial, innovative or risk-taking”. They trade without compromising their ethical fabric and legal responsibilities. We continue to see international law firms opening offices all over Asia. True, the way of doing business in Myanmar might differ from the way of doing business in Macau. But the fact of doing business in Asia does not mean that we thereby jettison sound judgment, ethical behaviour and proper practice in favour of entrepreneurial risk-taking and innovative ways. Nor does it mean we can only do business in Asia if we are “entrepreneurial, risk-taking and innovative”. Sorry to say, Matt Wade’s principal thesis fails at the threshold.
The Victorian Bar has highly developed links with its counterparts throughout Asia. We have strong bonds with practitioners in KL, in many Malaysian states, in Singapore, in Hong Kong and in parts of Mainland China. The Asia Practice Section of CommBar, headed by William Lye, has worked very hard to forge those links. We are currently seeing the fruits of our labour. In international arbitration circles CommBar members are KLRCA arbitrators, CIArb fellows and arbitrators of the Australian Institute for Commercial Arbitration.
Maybe Wade was intending to limit his innovation comments to exporters. For example, I know of Australian businesses selling enormous quantities of Australian red wine into China, transported so as to cope with extreme temperature fluctuations. I also know of Australian businesses selling fresh milk from local co-operatives using a technique that allows the milk to be refrigerated for over a month, thereby increasing marketing opportunities once landed. Maybe those are the innovators of which Wade speaks.
But in the law, Wade’s comments are way off target. If anything, in my experience Asian clients engaged with Australian lawyers admire the way we are ethical and risk-averse. Those lawyers will continue to excel when doing business in Asia in the Asian century.
The Asian century is very much alive.
Dr Josh Wilson QC – CommBar profile