Anthony Albanese will use high-profile meetings with top business leaders in Shanghai today to heap praise on the Australian-Chinese economic relationship, while promising to back industry efforts to decarbonise China’s huge steel sector.
Australian exports of coal and iron ore have been critical to China’s massive construction boom and poured hundreds of billions of dollars into Australian government coffers.
But China is now trying to turn to other iron ore suppliers, while also cutting steel production and moving to decarbonise industrial production.
Over time, those shifts threaten to blow a massive hole in Australia’s exports to China and the budget bottom line unless Australian businesses can adapt.
On Monday, the prime minister will meet with some of the top players in China’s steel industry and several Australian resources CEOs — including Rio Tinto’s Kellie Parker, BHP’s Geraldine Slattery and Fortescue’s Andrew Forrest — for a roundtable on green steel.
He will tell the gathering both countries should seek a “sustainable and market-driven global steel sector” while acknowledging steel production makes a hefty contribution to greenhouse gas emissions and climate change.
Some Australian companies are already beginning to work on driving down emissions in the sector, including by investing in new technologies designed to produce steel in different ways.
The prime minister is expected to say that steel decarbonisation “presents a range of challenges” but there is “significant work underway in Australia and China to develop technologies and policies to achieve these goals”.
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He will say that while industry will drive the shift, “enabling policy environments, extensive investments in research to develop new technologies and collaboration across academia, industry and government” are needed as well.
Mr Albanese will also laud the explosive growth in trade between Australia and China over recent decades when he speaks to about 200 business leaders from both countries at the historic Fairmont Peace Hotel in central Shanghai.
The menu is expected to feature Australian products like red wine, rock lobster and red meat, which were effectively blocked from China under coercive trade measures Beijing deployed when the relationship deteriorated in 2020.
The government has been keen to point out that since Beijing dropped those barriers, exports of those products have roared back into China, delivering hundreds of millions of dollars to producers.
The Coalition has suggested that Mr Albanese has been too quick to mollify China, with some opposition MPs arguing that his careful response to the Chinese navy’s live-fire drills in the Tasman Sea displayed weakness.
But Mr Albanese will launch a defence of the government’s drive to “stabilise” ties with Beijing, and will tell the business lunch that building dialogue with China “advances co-operation and addressing our differences without allowing them to define us”.
He will also say that businesses working in both countries have been central to that political stabilisation, saying “people-to-people connections and the networks that grow out of those connections” have buttressed the political relationship despite its tensions.
“It is a relationship that continues to evolve and grow, a relationship with a maturity that helps us overcome any challenges and seize the opportunities before us,” the prime minister is expected to say.
