Chapter 2

A nascent trade relationship

When Australia entered its first phase of nation building after federation in 1901, its trade ties with Asia were in their infancy, having been mediated through Britain during the colonial era. In 1906, the State of Victoria's Department of Agriculture appointed Australia's first trade delegate to Southeast Asia, James Sinclair.5 From his base in Singapore, Sinclair travelled throughout the region and became well acquainted with Malaya's vast sugar, tapioca, coconut and rubber plantations. Sinclair had some success in selling Victoria's ploughs and cultivators and was encouraged that 'if they do well, a large business will follow'.6 Sinclair's efforts did, indeed, increase the volume of trade with the region, and although he was not replaced when retiring in 1912, other Australian states soon emulated his model in the region.

The first decades of the twentieth century were marked not only by Australia's desire to establish new export markets, but also by a voracious appetite for raw materials to feed its manufacturing industries. Malaya became an important tin and rubber supplier, supporting the young industrialising economy. In the five years from 1906 to 1910, Australia's imports of tin from the Straits Settlements (Malay states of Penang, Singapore and Malacca), together with those from Labuan, doubled and rubber imports increased more than tenfold. These commodities fuelled the success of some of Australia's earliest and most iconic companies and, over the next fifty years, rubber and tin created new synergies across our two economies.

Malaya and the birth of Australian commercial icons

Australian investment in Malayan tin began before federation with entrepreneurs such as Sir Henry Jones, the founder of IXL Prospecting Company, investing in Malayan mines in the late 1890s.7 Co-investor in IXL and later chairman, Achalen Woolliscroft Palfreyman, went on to co-found Austral Malay Tin Limited in 1911, establishing offices in Taiping, Rawang and Kuala Lumpur. Palfreyman pioneered bucket dredging technology in Malaya with his company Consolidated Tin Dredging which, through several incarnations and mergers, eventually became CSR Limited, one of Australia's largest building supply corporations.8

After World War II rubber became as important to Australia as tin had been post-federation. Rubber was required in the foundation of Australia's postwar industry. When Australia's first Commission was established in Kuala Lumpur in 1955-56, imports from Malaya amounted to A£16.2 million—almost twice the value of Australian exports to Malaya—and rubber accounted for A£13.4 million of this amount.9 By the end of 1951, General Motors Holden (GMH) had manufactured just 50 000 cars in Australia but, by 1953, this number had doubled to 100 000, and more than doubled again to 250 000 by 1956. In 1956 GMH started exporting to Malaya and Sabah and, in 1957, the first Australian-made Chrysler Royal went to Malaya—a popular choice in the newly independent nation, given Prime Minister Tunku Abdul Rahman's own preference for a Chrysler Imperial.10