SYDNEY—Australia will back China in using next month's Group of 20, or G-20, summit in Mexico to push for Europe's struggling economies to change direction and focus on growth instead of austerity, the country's Foreign Minister Bob Carr said Friday.
"They see Australia as an ally in marshalling a G-20 position that says the world economies have got to focus on growth," said Mr. Carr in an interview with The Wall Street Journal in Sydney, on returning from his first official trip as foreign minister to China, Australia's largest trading partner.
"I would underline the importance of a return to growth, for Australia and China. That's something we're in emphatic agreement on," he said.
In Beijing, Mr. Carr met with Chinese Vice-Premier Li Keqiang and his Chinese counterpart, Foreign Minister Yang Jiechi. Europe's ongoing economic crisis was discussed, along with Australia's military ties with the U.S.
Leaders from the G-20 nations gather in Mexico next month with the global economy faced with its greatest challenge since the collapse of Lehman Brothers.
Greece's possible exit from the euro zone has touched off a downward economic spiral that threatens strong and fragile countries alike.
It has also stoked a furious debate within Europe and among global economic powers as to whether the region needs to reverse a strategy of deep cuts and austerity measures to pay down debt and instead focus on boosting growth.
"The Greeks face a big challenge in holding a society together while it winds back the over-generous social entitlements," said Mr. Carr. Business activity in the euro zone contracted at its steepest rate in nearly three years in May, with even robust Germany showing the strain.
The Organization for Economic Cooperation and Development, or OECD, on Tuesday sharply lowered its outlook for growth in the euro zone and urged policy makers to take radical steps to deal with the region's ongoing crisis.
That call for action echoed both the International Monetary Fund and Group of Eight leading industrialized countries, which have identified Europe's economic problems as the biggest threat to global growth.
The Australian dollar has softened around 10% to below parity with the U.S. greenback amid concern that China's economy is slowing quicker than expected, and that Greece could trigger a global recession if it exits the euro zone.
Australia is exposed to a European slowdown if exports from China are reduced. Its economy depends on supplying China and other large Asian countries with iron ore, coal and natural gas to fuel manufacturing industries.
U.S. investment bank JP Morgan Chase JPM -0.59% & Co. on Friday lowered its forecast for Australian economic growth, but kept in place upbeat expectations that the country's mining boom will continue to provide a solid base for the future, citing a continuing upbeat outlook for China.
Further evidence of China's slowdown came this week with HSBC Holdings HBC -0.62% PLC's Purchasing Managers Index, which fell to a preliminary reading of 48.7 in May from 49.3 in April, indicating that manufacturing activity declined for the seventh straight month.
"I think there's enough growth," said Mr. Carr. "China's got a long way to go before it achieves the urbanization rates of Japan or South Korea."
Dependent on each other in terms of trade and raw materials, Australia's relationship with China was recently complicated by a deal to allow the U.S. military rights to base 2,500 marines near the northern city of Darwin.
Chinese officials have described Australia's links with the U.S. as a legacy of the Cold War and the U.S.-led effort against communist states. "China needs to take pains to explain to its neighbors what its goal is," said Mr. Carr.
"More transparency on the Chinese side will allay the concerns that others have about evidence that China is focusing privately on cyber [espionage]."
Australian and Chinese naval vessels Friday completed a joint maritime exercise at the mouth of the Yangtze river as part of a five-day visit by the Australian warship Ballarat to Shanghai.
Further military cooperation with both China and the U.S. in the region would "be useful in lowering the concerns and anxiety on both sides," said Mr. Carr.
wsj.com
"They see Australia as an ally in marshalling a G-20 position that says the world economies have got to focus on growth," said Mr. Carr in an interview with The Wall Street Journal in Sydney, on returning from his first official trip as foreign minister to China, Australia's largest trading partner.
"I would underline the importance of a return to growth, for Australia and China. That's something we're in emphatic agreement on," he said.
In Beijing, Mr. Carr met with Chinese Vice-Premier Li Keqiang and his Chinese counterpart, Foreign Minister Yang Jiechi. Europe's ongoing economic crisis was discussed, along with Australia's military ties with the U.S.
Leaders from the G-20 nations gather in Mexico next month with the global economy faced with its greatest challenge since the collapse of Lehman Brothers.
Greece's possible exit from the euro zone has touched off a downward economic spiral that threatens strong and fragile countries alike.
It has also stoked a furious debate within Europe and among global economic powers as to whether the region needs to reverse a strategy of deep cuts and austerity measures to pay down debt and instead focus on boosting growth.
"The Greeks face a big challenge in holding a society together while it winds back the over-generous social entitlements," said Mr. Carr. Business activity in the euro zone contracted at its steepest rate in nearly three years in May, with even robust Germany showing the strain.
The Organization for Economic Cooperation and Development, or OECD, on Tuesday sharply lowered its outlook for growth in the euro zone and urged policy makers to take radical steps to deal with the region's ongoing crisis.
That call for action echoed both the International Monetary Fund and Group of Eight leading industrialized countries, which have identified Europe's economic problems as the biggest threat to global growth.
The Australian dollar has softened around 10% to below parity with the U.S. greenback amid concern that China's economy is slowing quicker than expected, and that Greece could trigger a global recession if it exits the euro zone.
Australia is exposed to a European slowdown if exports from China are reduced. Its economy depends on supplying China and other large Asian countries with iron ore, coal and natural gas to fuel manufacturing industries.
U.S. investment bank JP Morgan Chase JPM -0.59% & Co. on Friday lowered its forecast for Australian economic growth, but kept in place upbeat expectations that the country's mining boom will continue to provide a solid base for the future, citing a continuing upbeat outlook for China.
Further evidence of China's slowdown came this week with HSBC Holdings HBC -0.62% PLC's Purchasing Managers Index, which fell to a preliminary reading of 48.7 in May from 49.3 in April, indicating that manufacturing activity declined for the seventh straight month.
"I think there's enough growth," said Mr. Carr. "China's got a long way to go before it achieves the urbanization rates of Japan or South Korea."
Dependent on each other in terms of trade and raw materials, Australia's relationship with China was recently complicated by a deal to allow the U.S. military rights to base 2,500 marines near the northern city of Darwin.
Chinese officials have described Australia's links with the U.S. as a legacy of the Cold War and the U.S.-led effort against communist states. "China needs to take pains to explain to its neighbors what its goal is," said Mr. Carr.
"More transparency on the Chinese side will allay the concerns that others have about evidence that China is focusing privately on cyber [espionage]."
Australian and Chinese naval vessels Friday completed a joint maritime exercise at the mouth of the Yangtze river as part of a five-day visit by the Australian warship Ballarat to Shanghai.
Further military cooperation with both China and the U.S. in the region would "be useful in lowering the concerns and anxiety on both sides," said Mr. Carr.
wsj.com
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