Randomly Noted

Australia has everything going for it: abundant natural resources coveted by the world’s foremost industrial powers; banks that didn’t take stupid risks with customers’ money; a front-loaded stimulus-spending scheme that appears to have worked; a robust economy recovering so decisively that the central bank is well into a rate-hike cycle; and a decent pension and healthcare system. All this is demonstrably true (with the usual caveats) and it’s also the script to which Chris Bowen, the country’s financial services minister, is hewing to on a trip to New York City and London this week. What’s more, Australia has a refreshing, pragmatic and probably wise attitude toward foreign investment. One hears not a peep of protectionist rhetoric out of the lefty government  - which stands in contrast to their American counterparts. Chinese money has flowed into Australia in recent years as government regulators okayed the lion’s share of acquisitions of resources firms, notes Bowen, whose boss is the Mandarin-speaking Prime Minister Kevin Rudd.  Stern Hu (no relation), the Australian citizen and employee of Aussie-based mining giant Rio Tinto, languishes in a Chinese prison with three Chinese colleagues under the murkiest of circumstances. But Bowen is adamant the case won’t weaken Australia’s approach to China as a foremost trading partner. No doubt the Rio Tinto 4 is “a sensitive issue” in Australia, and Bowen says the Rudd administration “made our views very clear that the Chinese government needs to consider this is not good for their reputation in terms of doing business in China.” Chinese government officials continue visiting Australia, he adds, and “we make the point about Stern Hu on those visits. But you can’t let that downgrade the importance of the relationship.” Asked about foreign money flowing into Australia’s already frothy property market – and the sense one has that some of that money is coming from China – Bowen says, “That’s something we’re relaxed about.” It’s not a bad time for Bowen to be in pre-holiday Manhattan, given the Australian dollar’s ascent toward U.S. dollar parity. His main purpose in jet-setting across oceans is wooing financial services executives – banks, hedge funds and the like – to set up shop in Australia and diversify its fund-management industry. “We’re very interested in getting more offshore money.” He’s not saying much about the three-way tussle pitting France’s Axa SA and Aussie fund manager AMP Ltd. against Axa Asia Pacific Holdings. Axa and AMP want to buy APH and carve it up, with AMP keeping the Australia-New Zealand assets and Axa the rest of Asia.  Bowen says  that any deal would likely be subject to review by Aussie regulators. It will be interesting to see if protectionism kicks in…We asked Bowen what on earth Australian politicians have to worry about as their economy zooms ahead. “We wouldn’t discount further bad news on the world economy,” Bowen says. Indeed, most of Australia’s key trading partners, including the beleaguered U.S., are experiencing only the slightest of recoveries. The good times Down Under aren’t at all assured.