Australian statesman John Howard told New Zealand property industry professionals yesterday about Asian economic opportunities but warned against being mesmerised by China.

Mr Howard, the former Liberal Party prime minister of Australia, was speaking at the Property Council New Zealand national conference in Queenstown.

He said the largest single economic transformation since the Industrial Revolution was under way, marked by a shift in the centre of gravity from North America and Europe to Asia.

"The opportunities for both of our countries are enormous but they won't be realised without risk taking.

"The world is a strange place economically, Europe is going through something of an identity crisis."

He said he believed the euro was unable to survive in its present form and in time would shed members.

A European political elite had force-fed nations into accepting the euro, and despite multi-lateralism, it was still a world of nation states, he said.

It was a fundamental problem of the euro that monetary policy existed without a fiscal union's common expenditure and tax policy.

In China, there was some evidence of economic cooling and "two elephants in the room": demography and democracy.

The one-child policy condemned China to demographic change of mammoth proportions, and questions were raised about whether a country could exist with an economically liberal approach and political authoritarianism.

In Asia, countries such as Indonesia had been transformed but relationships with the United States and China would always be different.

"We must take care not to be mesmerised by China. I keep hearing stories about China overtaking the US as the most powerful country in the world.

"The idea that we have to choose between the US and China is nonsense."

Trade was needed as the basis of prosperity in the region and protectionism must be resisted, he said.

- © Fairfax NZ News

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