ANZ chief executive Mike Smith has played down concerns about the slowdown in the Chinese economy, and suggested the recent moves by China to impose tariffs on coal imports could be part of “gamesmanship” related to negotiations for a free-trade agreement.
“Business is getting on as usual. There is no doubt the slowdown is policy driven. They are trying to slow it down,” Mr Smith told The Australian and Deutsche Bank Business Leaders Forum in Melbourne today.
“Fundamentally, the economy is moving OK. It does have overcapacity in some sectors. Some of the property side is a bit frothy but nothing to be too concerned with. To the west and centre of China, it is going incredibly well. Am I worried about China? No, not at all.”
Asked about the Chinese government’s shock decision last week to impose tariffs on Australian coal imports, Mr Smith speculated that “it could be gamesmanship”.
Australia is currently in the final throes of negotiations with China on a free-trade agreement, that is expected to be announced next month.
“It is a bit unusual. It does smack of protectionism to some extent,” he said of the decision.
“It could also be gamesmanship. Australia is progressed in the FTA so is that another little bit of gamesmanship, you never know.”
His comments were backed by Wesfarmers group commercial director Ian McLeod.
“They (the tariffs) can come out of the blue,” he said, noting that the tariffs were not applied to Indonesian coal imports, Australia’s greatest regional competitor.
“The link in with the free trade agreement does seem a remarkable coincidence,” he said.
He added that: “More broadly the relations between Australia are very positive.”
Asked about the recent pro-democracy protests in Hong Kong, Mr Smith said: “It is naive to think that Hong Kong will be able to maintain some form of democracy when the rest of China doesn’t.”
Of all the Australian banks, ANZ is the most exposed to Asia and has a significant presence in Hong Kong.
