Australia Prepares for the Asian Century

Australia wants to position itself to capitalise on the growth of Asian neighbors, particularly China, India and Japan, by reviewing businesses ties with the region.

Prime Minister Julia Gillard ordered on Wednesday former Treasury Secretary Ken Henry to head the preparation of a white paper which aims to be the federal government's blueprint to develop a strategic, economic and trade mandate in Asia.

The white paper, which would be titled "Australia in the Asian Century" is expected to be ready for cabinet discussion in early 2012.

Ms Gillard ordered the draft of the document because of the major shift of economic and strategic power to Asia which is expected to have a deep and unrivalled influence on Australia's security and future development. Her speech in Melbourne is considered one of her most substantive foreign policy speeches.

"What we know clearly is there isn't a single aspect of government policies and national planning that won't be touched by the great changes to come.... These changes have barely begun - these changes will define our future," The Sydney Morning Herald quoted the prime minister.

Besides the three Asian giants, the paper will include South Korea and Southeast Asian nations. To help Mr Henry come up with the white paper will be an advisory panel made up of senior officials and external advisers as well as a task force based in the Department of the Prime Minister and Cabinet.

Recent studies have shown that investment between Australia and Asia is lopsided in favor of the former. Asian investments in Australia are 1.5 times that of Australian investment in Asia. In the past two years, 150 Asian firms invested in Australia, but for the same period, only 100 Australian companies made similar investments in Asia.

Geoff Raby, former Australian ambassador to China, pointed out that the country is in particular lagging other nations in Chinese engagement.

"I think it needs to be understood in Australia that we have not increased our diplomatic (foot)print since 1995 and China is a vastly different place since 1995," The Australian quoted Mr Raby.