The Australian resources sector is well placed for the future although it could be held back because of higher costs and a lack of competitiveness, industry chiefs say.
The national heads of Chevron and Rio Tinto said demand from China and other parts of Asia continued to be strong but regulators needed to ensure Australian businesses were not disadvantaged by unnecessary red tape and higher taxes.
Rio Tinto managing director for China Ian Bauert said China had become more dependent on the foreign supply of resources as it encouraged its enterprises to seek equity in projects, but with mixed results.
"While Australia is well placed to continue to supply China with commodities there is no room for complacency," Mr Bauert told the In the Zone 2012 Conference in Perth on Monday.
China's can do attitude was welcomed by governments keen to show they were making progress, he said.
"Despite all the issues confronting the Australian resources industry, the opportunity is there if we are up for the challenge."
Mr Bauert commended the aspirations outlined in the Australian government's recently released Asian Century White Paper, but said reform was needed.
"We need to get serious about addressing some of our current shortcomings and, on the economic front, chief among these, is our growing lack of competitiveness," he said.
Australia would find it difficult to fulfil its potential in Asia if its costs became uncompetitive, productivity declined, and the country lacked export infrastructure.
He said failure to attract adequate foreign capital, invest in research and development, discriminate against investments or adopt a competitive tax regime would put the nation at a disadvantage.
"Five years ago Australia was considered the cheapest place for Rio Tinto to do business, now it's the most expensive.
"Unless the focus of future debate is on addressing such issues we are likely to fall behind and seriously underachieve our potential in the Asia century."
Chevron Australia managing director Roy Krzywosinski said while more than $160 billion had been committed to liquefied natural gas (LNG) investments in Australia, the sector faced a number of challenges while around $100 billion worth of projects hung in the balance.
"Industry's confidence in making major capital investments is being affected by the current fiscal environment," he said.
He cited the federal government's recently implemented retrospective tax on foreign investors, which increased business costs, eroded international competitiveness and diminished investor confidence.
The carbon tax was an additional cost for foreign investors, he said.
"These costs add to the growing list of disincentives to invest here," he said.
Mr Krzywosinski added that further tax imposts were likely.
For the latest news click here
For the latest Drive features click here
For the latest Travel features click here
For the latest Food & Drink features click here
Follow myresources.com.au on Twitter