The official title of the government's latest Foreign Policy White Paper, Opportunity Security Strength, seems to imply that the business prospects in rising Asia have a greater significance than the geopolitical uncertainties that have dominated much of the post-release debate.
But the economic diplomacy challenges involved in reaping that promised opportunity are highlighted in three quite diverse pieces of analytical work on the business environment, published since the White Paper's launch.
Now, not why, for ASEAN
The second edition of the Austrade publication Why ASEAN and Why Now (renamed ASEAN Now to emphasise greater urgency) argues that Australia is 'well behind' other major economies in trade and investment with Southeast Asia and needs to expand its footprint to remain internationally competitive.
However, the extent of this lag is not quantified. This is unfortunate, since the White Paper has made increased engagement with Southeast Asia a security priority and this ideally requires the mutual vested interest of stronger economic foundations. Next year's ASEAN leaders summit in Sydney, for which this report has been prepared, will have a big focus on deepening business links.
Nevertheless, ASEAN Now makes some striking points about what is happening in the closest part of Asia to Australia: it is the fastest growing internet market in the world; the number of middle class households will quadruple to 161 million by 2030; and it already represented the largest source of goods export revenue for Australian small and medium businesses in 2014-2015.
In a reflection of the education export background of the new Austrade chief executive Stephanie Fahey, this publication seeks to shift the focus from more traditional forms of economic engagement to digital business, noting for example that the ASEAN region has faster ecommerce growth than anywhere except India. This focus has been vindicated by the latest Google-Temasek ASEAN e-commerce report, which suggests the ASEAN internet economy has grown 35% faster than was forecast in the first version of this report last year.
The services economy focus in ASEAN Now is also underlined by the choice of case studies highlighting successful Australian business in the region, from electronic ticketing firm Vix Technology to the tourism training business William Angliss Institute.
Significantly, only seven out of 26 are big public companies. But this only raises a question about whether there is more economic engagement with ASEAN at a private or 'below the radar' level in the services sector than the official statistics and public company data capture. The serial start-ups by Australian-Singaporean entrepreneur Patrick Grove come to mind, as does the evolution of the Australian-Indonesian-Vietnamese technology services company Mitrais over 25 years.
A third leg to the US vs China contest
The Australia International Business Survey now provides the best granular information on how Australian businesses are really operating in the world. The latest edition (from Austrade, the Export Council of Australia, and the University of Technology Sydney) has some interesting input for the geopolitical debate.
For example, after a year of jousting over the relative importance of the US and China as economic partners, 23% of AIBS respondents say China is the most important offshore revenue source and 22% say the US, followed by New Zealand and Britain. And there is also a higher level of dependence on China compared with the US for some businesses, which could be a risk factor in a cooler bilateral relationship.
But despite the less positive assessment of the current business relationship in the ASEAN Now report, the Southeast Asian countries combined turn out to be a more important revenue source than either China or the US, at around 30% depending on the measuring approach taken. The US is the most important revenue source for manufacturing and professional services, but China is most important in agribusiness, education and wholesale trade.
Where does the mooted big new security partner India sit in this commercial hierarchy? About the same as Indonesia or Hong Kong, as a top revenue source for only 7% of respondents.
The AIBS survey also has some mixed findings for a government that regularly touts its success in negotiating free trade agreements and has put considerable resources into promoting such deals to business. China turns out to be the country where businesses are most aware of the benefits of the existing FTA at 40%, followed by South Korea at 32% and Thailand at 31%. Awareness of benefits from the older US agreement is much lower, at 20%.
One result is especially striking. For no bilateral FTA do a majority of businesses operating in that country see clear benefits from the deal – although there is a debate about whether many of these businesses outsource their trade law compliance and so don't really know the answer to this question.
Once again it is notable that ASEAN, where Australia has a regional trade deal as well as some bilateral agreements, is nominated as the most popular FTA market for goods exporters.
India to the rescue?
The Minerals Council of Australia (MCA) has stepped into this debate about Asian commercial partners with the first report from a bigger research project on the future of both commodity and mining, engineering and technology services (the so-called METS) sales in India and Southeast Asia.
This is fascinating for what it says about what might fill the void from any slowing of Chinese demand for resources. The report takes a more optimistic approach to India's longer-term appetite for Australian mining commodities and services than some other analysts.
Such a development would be a crucial part of the new Indo-Pacific security jigsaw puzzle, as it would provide stronger commercial ballast to a bilateral security relationship between India and Australia akin to that developed over decades with Japan.
The MCA report, written by former Department of Foreign Affairs and Trade economists, hints at latent bureaucratic differences over the priority that should be given to Australia's older commercial relationship with Asia as a resources supplier versus the newer focus on e-commerce and services.
Indeed, it says the resources and METS opportunities in Asia are being ignored by politicians in favour of greater support for industries such as financial services and education. It points out that Indonesia is the first or second biggest market for METS exports, which contrasts with the ASEAN Now concern about missing opportunities in that country.
Free from the diplomatic sensitivities of being a government report, the MCA publication strongly backs the Chinese Belt and Road Initiative. The report is much more frank about the difficult operating conditions in India and Southeast Asia for Australian businesses, which possibly explain the relatively low level of engagement identified in ASEAN Now.
But it argues that the role Australian resources have played in the historic economic transformation of modern Asia has given Australian economic diplomacy an underappreciated foundation. This allows Australia to press ahead and pursue trade and investment reforms through the aid program, in trade negotiations and through regional institutions.