Treasurer Wayne Swan gave Australians a glimpse into the Gillard government's new policy direction on Asia in a speech he delivered on Wednesday at the Australia China Business Council in Melbourne. Mr Swan called on Australia's business community to make an inspired decision and create greater links with Asia.

He said that since Australia is in the grip of a defining moment similar to Gough Whitlam's decision to engage China in the 1970s and Paul Keating's decision to engage with Asia in the 1990s, the business community must make the 2010s the Australian Century in Asia instead of Australia hitching a ride as a passenger in the Asian Century.

The Gillard government is scheduled to release a new White Paper, titled Australia in the Asian Century, by the middle of 2012. The paper, led by former Treasury Secretary Ken Henry, would provide the national blueprint for Australia at a time of transformative economic growth and change in Asia.

In pushing for more emphasis on Asia, Mr Swan pointed to the dramatic swing in economic weight from the old world western economies to the Asian economic powers of the future. He stressed that China alone accounts for almost 15 per cent of the global domestic product (GDP).

Mr Swan noted that in the 1950s, only 15 per cent of the global GDP was within 10,000 kilometres of Asia which has jumped to about one third of global GDP and may even rise further to two thirds by 2050.

Mr Swan estimated that over the next 15 years, the urban populations of China, India and Indonesia would go up by 400 million people with the bulk of them belonging to the prosperous middle class.

"Asia will evolve to become not only the world's largest production zone, but also the world's largest consumption zone," he said.

"Increasingly, it will be the growing propensity of Asian populations that shape the opportunities and challenges facing Australia," Mr Swan said.

The best way for Australia to prepare for an Asian century is to ensure Aussies have the skills, capital and flexibility to respond, he said. The preparatory moves are in line with ongoing domestic reforms, regardless of how the Asian growth evolves, the treasurer said.

The reforms that the government must pursue include controversial measures such as the mining tax and carbon tax, and other policies in skills, infrastructure, competition and regulation. Mr Swan pushed for a deeper Australian engagement with the Asian region, which he said has scope to grow and improve.

He added that while government-to-government links are vital for the success of the Asian engagement, businesses and people must also put in place their own relationships and own friendships in the region.

Mr Swan is expected to lead an Australian business delegation to China later this year which would make him the most-travelled Australian treasurer to Beijing with seven trips.

Mr Swan stressed that Australia has many advantages because of its highly educated, multicultural and entrepreneurial society with a long record of economic success.

"From that foundation, we must continue to build our reputation as a high-technology, low-carbon economy - moving up the value chain in product and service markets to supply a rapidly middle-classing Asia," he said.

To indicate the importance given by Australia to China, the two nations inked a $30-billion current swap deal last week which Mr Swam said is an important step in the internationalisation of the Chinese currency and made Australia one of the first developed economies to set up such a transaction.

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