DPC travel outcomes report: Daniel Andrews' 2015 travel to China

Purpose of travel

From 20-27 September 2015, I led a delegation of Victorian Government Members of Parliament, senior business executives and senior government officials to China to visit Beijing, Nanjing and Chengdu. The purpose of this travel was to:

• establish close personal relations with some of China’s most influential government representatives, business and industry leaders that have existing investments in Victoria and prospective investors to Victoria;
• build a stronger economic alliance with Jiangsu Province;
• strengthen Victoria’s focus in the southwest of China (West Triangle Economic Zone);
• explore new opportunities under the China-Australia Free Trade Agreement;
• formalise relations between key cultural and tourism institutions to strengthen people-to-people connections between Victoria and China;
• consult with senior government and industry leaders on the Victorian Government’s proposed China Strategy.

Importance of China to Victoria

My travel reinforced the importance of Victoria’s relationship with China, promoted opportunities for increased collaboration in key sectors, reaffirmed important government ties and established new relationships.

China is Victoria’s largest and fastest growing trading partner with $20.4 billion in two-way merchandise trade in 2014-15 and growth of 15.9 per cent over the last 5 years.

Growing trade sectors in China which complement Victoria’s areas of expertise including:

• Leading source of international students in Victoria with 48,970 Chinese international students enrolled in Victorian schools and tertiary institutions in 2014
• Fastest growing tourism market with 439,000 Chinese visitors to Victoria in 2014-15 a 24.3 per cent increase over the previous year
• Largest market for Victoria’s premium food and fibre with exports worth $2.8 billion in 2013-14
• Biggest source of investment interest in the areas of infrastructure, agribusiness, tourism and aged care as a result of the China-Australia Free Trade Agreement
• Chinese people and culture are an increasingly integral part of Victorian society with 6.5 per cent of Melbourne’s population reporting Chinese ancestry

Victoria’s exports to China have been a great success story with goods exports growing by 44 per cent since 2010-11. While China’s growth is slowing to a ‘new normal’ of 5-6 per cent, per year, this is still high by international standards with China tipped to become the world’s largest economy by 2030.

In light of this, my program was designed to: further strengthen relations between the governments, businesses and people of Victoria and China; meet China’s growing demand for Victoria’s products and services; and to capitalise on growing investment interest in Victoria’s infrastructure program, agribusiness and tourism sectors.

Benefits of travel to the State of Victoria

The implications for the development of the government’s China Strategy from this trip are significant, especially when considering Victoria’s approach to strengthening the social, cultural and economic ties with China.

My visit produced several positive outcomes including the establishment of new agreements and partnerships between Victoria and China in the areas of technology, health and culture.

Enhancing Government to Government Relations

In Beijing, Nanjing and Chengdu, I reaffirmed and strengthened relationships and established new connections with senior Chinese government officials including:

• Mr Ding Wei, Vice Minister of Culture in Beijing where I discussed our mutual desire for cultural exchanges through the China-Victoria Cultural Exchange Agreement signed during this meeting. This Agreement is the first cultural agreement between Beijing and a sub-national government and reflects the desire of Victoria and China to foster a deeper mutual understanding of history and contemporary culture. The Agreement will provide a framework for ongoing cultural and creative industry activity and exchange between Victoria and China.
• Mr Li Shixiang, the Vice-Mayor of Beijing, where I discussed Victoria’s China Strategy and Mr Li’s views on the emerging opportunities for greater engagement between China and Victoria.
• During my tour of the Jiangsu Innovation and Technology Research Institute in Nanjing, I announced an Innovation and Technology Cooperation Agreement including the establishment of a $4 million Cooperation Fund where both Victoria and Jiangsu contribute $2 million each. The agreement will stimulate a range of new and mutually beneficial scientific, technological and industrial partnerships that will deepen the ties between Victoria and Jiangsu.
• Mr Li Xueyong, the Governor of Jiangsu, and the Mr Luo Zhijun, Party Secretary of Jiangsu to reaffirm Victoria’s commitment to the 36-year old sister-state relationship between the State of Victoria and the Province of Jiangsu. At this meeting we witnessed the signing of two new agreements, the Victoria-Jiangsu Health Collaboration Agreement and the Victoria-Jiangsu Innovation and Technology Cooperation Agreement. We also discussed how Jiangsu and Victoria can work together on new cultural initiatives, enhancing cooperation in areas such as environmental services and policy, and received feedback on the Victorian Government’s proposed China Strategy.
• Mr Wei Hong, the Governor of Sichuan, where we signed a Letter of Intent to establish a sister-state relationship between Victoria and Sichuan within the next year. In doing so, Victoria will be the first Australian state to hold a sister-state relationship with Sichuan. We also discussed the China Strategy and how despite Victoria and Sichuan’s relationship being relatively new, mutually beneficial results are already evident including the Sister Park agreement between Philip Island Nature Parks and the Chengdu Research Base for Giant Panda Breeding, the university scholarships programs for Sichuan and Victorian students, the partnership between the University of Melbourne’s Conservatorium of Music and the Sichuan Conservatory of Music and the new Health Collaboration Agreement.
• Mr Zhang Yi, the Secretary General, of the State-owned Assets Supervision and Administration Commission met with the Secretary of the Department of Premier and Cabinet due to my schedule. Together they discussed the opportunities and challenges of Chinese state-owned enterprises operating in Victoria, and the development of closer economic and business ties that build on mutually beneficial business opportunities.

Enhancing Business Relations between Victoria and China

In Beijing, Nanjing and Chengdu I held meetings and events to strengthen Victoria’s ties with investors and business leaders in the priority sectors that are key to stimulating economic growth, including:

• I witnessed the signing of an agreement between Victorian company RayGen and its Chinese partner company, Intense Solar, to manufacture high-tech solar receiver components and software in Victoria to be sold in China. This agreement is expected to create up to 200 jobs in Victoria over the next five years.
• I witnessed the signing of an e-Commerce agreement between Chemist Warehouse and Alibaba that will enable Chemist Warehouse to sell products on Alibaba’s Tmall site. This agreement is expected to create 50 new jobs in Melbourne to service the expected increase in sales.
• In Beijing I met with the Vice President of Air China to discuss daily direct flights between Beijing and Melbourne from 25 October 2015, which will provide a major boost to bilateral tourism and exports of Victorian fresh produce. We also discussed Air China establishing a new cargo office in Melbourne to handle the increased freight.
• During my tour of Gulou Hospital in Nanjing, I announced the Health Collaboration Agreement between Victoria and Jiangsu. This exchange will facilitate improvement in workforce training and development, collaboration between governments and health care organisations, and most importantly better health outcomes for the people of Victoria and Jiangsu.
• Hosting the Tasting Victoria Luncheon in Beijing showcasing Victoria’s expertise and excellence in food and agriculture to executives and representatives from some of China’s leading tourism organisations and airlines.
• Leading investment roundtables with targeted business leaders in Beijing, Nanjing and Chengdu to discuss opportunities and challenges for future partnerships. The 55 Chinese companies that attended the roundtables spanned many sectors, including food and fibre, transport and infrastructure, new energy, medical technology, education and professional services.
• Hosting a dinner of 108 delegates from China and Victorian businesses operating in China to announce the development of the Victorian Government’s China Strategy.
• Highlighting Melbourne’s suitability as an investment destination to host the Boao Forum, China’s premier forum for engagement between government officials and industry. The forum is considered to be one of Asia’s most influential economic forums.
• Meeting with several key companies with interest in investment in transportation, agribusiness and new energy.

Strengthening People-to-People connections

Throughout China, I worked to establish new people-to-people relationships including:

• I announced the opening of the next round of the Hamer Scholarship program, which will see the 100th Hamer Scholarship awarded.
• In Chengdu I visited Chengdu Research Base for Giant Panda Breeding to witness the establishment of a new Sister Park Agreement between the Chengdu Research Base for Giant Panda Breeding and Philip Island Nature Parks. The collaboration through this agreement will enrich conservation and eco-tourism efforts of both the Panda Base and Philip Island Nature Parks.
• In Jiangsu, I visited the historic Nanjing City Wall to understand the rich history and culture of this ancient city which was once the capital of China.
• In Chengdu I awarded the first of Deakin University’s new scholarships for Sichuan students to study in Victoria. This undergraduate scholarship will be offered to the highest achieving Sichuan student in the Chinese National Higher Education Entrance Examination. This mirrors the Sichuan Xihua Scholarship available only to Victorian undergraduate students to study in Sichuan either on exchange or a four year undergraduate degree. These scholarships provide a platform for deepening ties and cultural understanding between Sichuan and Victoria.
• Education connections between Victoria and China are thriving with China as Victoria’s number one source of international student scholarships providing students from both Victoria and Sichuan not only with a great education, but with friendships and experiences that will last a life time.

Next steps

The next steps following my successful visit will be to ensure that the connections between the governments, businesses and people of Victoria and China are taken to a new level. Maintaining ongoing engagement with China will assist Victoria in developing our strong relationship into an even more sophisticated partnership, based on mutual trust and a nuanced understanding of each other’s people, culture and economic needs.

To achieve this I have requested that all Victorian Government Ministers visit China within this term of office. In the coming months the following Ministers will travel to China:

• the Minister for Trade, Philip Dalidakis MP, will travel to Beijing with 20 Victorian Health companies to explore new opportunities under the China-Australia Free Trade Agreement in devices, architecture and design.
• the Minister for Creative Industries, Martin Foley MP, will also travel to China to meet with the Ministry of Culture to promote closer cultural and creative relations, collaborations and to follow up on the Cultural Agreement.

In response to my visit, Mr Xu Nanping, the Vice Governor of Jiangsu and Mr Xu Guoping, the Director General of the State-owned Assets Supervision and Administration Commission, will visit Victoria to discuss further opportunities of collaboration and investment between Victoria and Jiangsu as well as the implementation of the Victoria-Jiangsu Innovation and Technology Cooperation Agreement signed during my visit to China.

To progress the development of a sister-state relationship between Victoria and Sichuan I will establish a Standing Committee to ensure that a sister-state best supports cultural and economic cooperation. Both Victoria and Sichuan will continue to develop initiatives in key areas of mutual benefit, with a particular focus on liveability, to leverage Victoria’s strengths and increase trade and investment ties.

Following the signing of the Victoria-Jiangsu Health Collaboration Agreement, the governments of Victoria and Jiangsu will review the connection between the Royal Melbourne Hospital and Gulou Hospital to establish a more sophisticated partnership in health and related industries.We will also work together to develop a training program for Community Health Centre Management and in 2016 four Jiangsu Doctors will come to Melbourne for a three month Clinical Observation program.

Following on from this trip the Victorian Government will consult further with our Chinese counterparts to inform and complete the China Strategy. The completion and implementation of the China Strategy will provide a framework for Victoria to maintain and build on the positive relations and connections that were made during my trip.