DPC travel outcomes report: Daniel Andrews' 2016 travel to China and Japan

Purpose of travel

From 19-28 September 2016, I travelled to China to visit Beijing, Nanjing and Chengdu and Japan to visit Tokyo. The purpose of this travel was to:

• lead the delivery of initiatives outlined in the China Strategy, which was released in April 2016;
• position Victoria’s international education sector for sustained future growth;
• establish an innovative new sister-state relationship with Sichuan Province, which will support genuine exchange between Victoria and Sichuan in government, business, education, community, and the arts;
• lead the next phase of Victoria’s existing sister state relationship with Jiangsu Province by deepening our relationship, especially in advanced manufacturing, regional partnerships, and collaboration on the development of industrial design centres;
• promote Victoria as a trusted partner for trade, investment and cooperation in priority areas, including health and medical research, new energy technology, and food and fibre;
• attract investment into the Victorian economy to unlock further productive capacity; and
• build momentum for major global business conferences and major events occurring in Victoria in 2016-17, including the 54th Annual Australia Japan Joint Business Conference; the Intelligent Transport Systems World Congress and International BioFest.

My travel demonstrated the Victorian Government’s commitment to building strong, productive and mutually beneficial relationships with our largest trading partners and largest source of investment in Asia.

My second visit to China and first visit to Japan focussed on new opportunities in education, medical research, investment, future industries, renewables and innovative transport solutions.

I promoted increased collaboration in sectors of complementarity, formalised new friendships in the fast growing and influential Sichuan Province in China and reaffirmed our longstanding relationships in Jiangsu Province in China and in Tokyo in Japan.

Importance of China to the State of Victoria

In 2015-16, China was again Victoria’s largest two-way merchandise trading partner, accounting for 32.8% ($23.3 billion) of total trade. Victorian trade with China grew 14% last year.

The province of Jiangsu alone has a larger economy than Indonesia (in 2015 Jiangsu’s GDP was over US$1 trillion, compared to Indonesia’s US$862 billion), and is Victoria’s longest standing sister state.

Sichuan, Victoria’s newest sister state, is a key province in China’s increasingly important Western Triangle Economic Zone.

Sichuan’s capital, Chengdu, was named China’s most economically successful city in 2015 by the United States-based think tank the Milken Institute.

Victoria enjoys strong partnerships with China in areas ranging from education, to tourism, to trade and investment. China is:

• the leading source of international students in Victoria with 58,000 Chinese international students enrolled in Victorian schools and tertiary institutions in 2015 (an 18% increase year-on-year)
• the leading source of international tourists to Victoria with 490,000 visitors for the year ending June 2016, up 12% on 2014-15.
• Beijing, Chengdu and Shanghai are now among the top 5 sources of travellers landing in Melbourne
• the largest market for Victoria’s premium food and fibre with exports to China worth $3.1 billion in 2015-16, up 10% on 2014-15 one of Victoria’s fastest growing markets
• Exports to China grew 40% from 2010-11 to 2014-15

Moreover, Chinese people and culture are an integral part of Victorian society with 6.5% of Melbourne’s population reporting Chinese ancestry, and strong historical links to Victoria.

Importance of Japan to Victoria

Japan is an important economic and cultural partner for Victoria, and Victoria’s largest source of foreign direct investment (FDI) in Asia. Victoria has a sister-state relationship with Aichi Prefecture, and 19 sister-city relationships across Japan.

The Victorian and Japanese business communities enjoy a strong, long-standing relationship, supported by the Australia Japan Business Cooperation Committee and the Japan Australia Business Cooperation Committee.

Japan is a world-leader in technology and innovation, with global influence in areas aligned with Victoria’s future industries including renewable energy and medical research.

Highlights of the Victoria-Japan relationship include:

• Japan is Victoria’s third ranked two-way trade partner, with the relationship worth $6 billion in 2015-16;
• Japan is Victoria’s third largest source of FDI behind the US and UK, and largest source of FDI from Asia;
• there are over 170 Japanese companies in Victoria, employing around 10,000 people; and
• in the last year Victoria welcomed more than 53,000 visitors from Japan, a 17 per cent increase on the previous year.

In addition, Japanese is the most taught language in Victorian Government Primary Schools, with 52,000 students enrolled in 2015, and has the third highest enrolment rate for secondary school students.

Benefits of travel to the State of Victoria

The Victorian Government’s China Strategy ‘Partnerships for Prosperity’ was released in April 2016 and represents a fundamental shift in how Victoria engages with China.

The Victorian Government’s engagement with China is underpinned by the development of strong, personal relationships with our Chinese partners.

By investing in our relationships, Victoria is able to foster partnerships in China that make the most of our combined potential at the intersection of our collective capability and needs.

I have personally committed to visit China every year and have asked all my Ministers to visit China during this term of Government.

The outcomes of my visit this year, building on my successful trip in September 2015, are testament to the merits of this personalised approach which moves interactions beyond the transactional towards a relationship based on mutual trust and understanding.

The engagements and agreements reached as result of my visit in education, health, investment, history and sports demonstrate the breadth and depth of Victoria's new approach and the positive outcomes that can be achieved.

Education

I positioned Victoria’s international education sector for sustained future growth through a series of meeting and events, including:

• meeting with National Vice Minister for Education, Ms Lin Huiquing, to establish Victoria as an education provider of choice;
• witnessing a historic Memorandum of Understanding with China’s Ministry of Education establishing a biennial China-Victoria Education Leadership Dialogue, which will identify new opportunities for collaboration and exchange;
• hosting an International Education Luncheon with senior leadership from Victorian universities and VET Institutes to highlight new Victorian initiatives to enhance student experiences, including:
  • the Experience Victoria program to familiarise new school students with Victoria’s culture and environment, including through visits to universities and cultural and sporting events with a Victorian student buddy;
  • a new mobile Welcome App to provide a comprehensive source of information to students before and after arrival;
  • more prominent and effective welcome facilities at the airport (including in Mandarin);
  • an online support kit to assist homestay families to provide positive homestay experiences;
  • additional English language classes for students;
  • opportunities for students to participate in the organisation of major Victorian events to gain employability skills and local connections; and
  • a major annual graduation event at Federation Square for students and visiting relatives.
• expanding the Hamer Scholarship program to Sichuan as part of the sister state agreement with Sichuan to support Chinese language study for young Victorians.

Trade and investment

I promoted Victoria as a trusted business and investment partner, emphasising our longstanding connections with China and Japan and status as Australia’s most diversified economy. Key trade and investment engagements included:

• meeting with Vice Chairman and Secretary-General of the Boao Forum for Asia (BFA), Messrs Zeng Peiyan and Zhou Wenzhong to discuss further opportunities for continued collaboration between the BFA and Victoria;
• meeting with the Mayor of Beijing, Mr Wang Anshun, to discuss potential partnerships at the intersection of our respective needs and capabilities including the expertise of Victorian companies and their potential as partners in the design and delivery of Beijing’s Tongzhou Project, which will relocate the Beijing Municipal Government’s offices out of Beijing;
• hosting a Victoria Investor Luncheon for more than 100 Chinese investors that highlighted Victoria as an investment destination;
• delivering a keynote address at a Business Chamber Luncheon in Chengdu during which attendees from the Sichuan and Victorian business communities (including the Victorian Chamber of Commerce and Industry, the Australia China Business Council and the Australia Sichuan Business Association) agreed to a partnership with Sichuan business chambers under the sister state agreement;
• meeting with senior executives of Japan’s new Agency for Medical Research and Development to promote Victoria’s capability in health and medical research;
• meeting with some of Japan’s top investment and trading houses (Mitsubishi and Mitsui & Co) and banks (Bank of Tokyo Mitsubishi UFJ) to promote investment opportunities in Victoria;
• meeting Dr Akio Mimura AC, President, and Mr Yorihiko Kojima AC, Vice President, of the Japan Australia Business Cooperation Committee to develop a close personal relationship with two of Japan’s most influential business leaders;
• hosting a luncheon for members of the Japan Australia Business Cooperation Committee, comprising representatives of Japan’s leading trading houses and banks (including Sumitomo Mitsui Banking Corporation; Marubeni Corporation, Itochu Corporation, Sojitz Corporation) to promote Victoria as an investment destination;
• meeting with NEC, Nippon Paper, and Kawasaki Heavy Industries to discuss existing investments and potential new investment opportunities; and
• hosting an investment dinner celebrating 40 years of Victorian Government representation in Japan with 120 attendees, including senior representatives from approximately 80 Japanese companies investing or seeking to invest in Victoria, members of Japan’s national parliament, representatives from the Aichi Prefectural Government (Victoria’s sister state in Japan), and senior representatives from the Japan Football Association, the Japan Golf Tour Organisation, the Japan Tennis Association and the Japan Racing Association to generate momentum for Victoria’s calendar of major events.

Strengthened existing partnerships

I expanded Victoria’s bilateral partnerships with its sister-state of 37 years, Jiangsu Province, through a number of high-level engagements, including:

• co-hosting the biennial Victoria–Jiangsu Joint Economic Committee, to secure new bilateral partnerships in advanced manufacturing and regional development;
• meeting with the Provincial leadership, including the Governor and Party Secretary of Jiangsu and the Party Secretary of Nanjing, to secure positive personal relationships with key stakeholders;
• delivering the keynote address at a joint Primary Health Symposium organised by the health departments of Victoria and Jiangsu, that fostered greater collaboration to support the development of Jiangsu’s primary health system, establishing Victoria as a partner of preference for Jiangsu in this area;
• witnessing the signing of a partnership agreement between Nanjing University, the Walter and Eliza Hall Institute, the University of Melbourne, and Cancer Trials Australia to fast track medical research discoveries through the establishment a new translational research centre; and
• delivering the keynote address at the Victoria-Jiangsu Regional Cities Alliance dialogue involving regional cities from Jiangsu meeting senior representatives from Ballarat, Shepparton, Wangaratta, Warrnambool, Geelong, Latrobe City and Gippsland. The Alliance supports partnerships based on shared economic strengths and aspirations and aims to deliver regional economic growth opportunities.

Historic new sister state partnership with Sichuan

I signed a new sister state partnership between Victoria and Sichuan Province.

This is only Victoria’s fourth such agreement and it is an ambitious agreement that will foster connections between government, business, educational, and cultural institutions.

The agreement:

• establishes a biennial Victoria Sichuan Cooperation Committee to be attended by senior officials from both jurisdictions;
• facilitates partnerships at all levels including government, business and community; and
• commits Sichuan to the establishment of a presence in Victoria.

The new sister state agreement will deepen partnerships between Victoria and Sichuan in education, health, culture and sports. Under the banner of the new sister state agreement I witnessed the establishment of:

• a partnership agreement between the University of Melbourne and Sichuan University which will initially facilitate Melbourne’s Department of Psychiatry to undertake a collaborative research program with the Mental Health Centre West China Hospital of Sichuan University;
• a partnership between the Sichuan Province Women’s and Children’s Hospital and the Royal Women’s and the Royal Children’s to support the development of its new hospital campus;
• the establishment of a Victoria & Sichuan Joint Working Group on Traditional Chinese Medicine (TCM) to jointly identify opportunities for collaboration in TCM-related medicine;
• a partnership between Holmesglen Institute of TAFE, Chengdu Technician College and Australia Master Group for an educational collaborative partnership in vocational education and English language training;
• an educational partnership agreement between Latrobe University and the University of Electronic Science and Technology of China to facilitate cooperation in teaching, research, and staff and student exchange;
• a partnership between Southwest Jiaotong University and the Cooperative Research Centre for Water Sensitive Cities to bring together a multi-disciplinary group that will develop and commercialise best practice initiatives for water management, and position Victorian firms as preferred partners; and
• a partnership between the State Library of Victoria and Sichuan Library that will explore collaborative research and personnel exchanges to deepen mutual understanding.

Culture and Sports Diplomacy

I further cemented Victoria as Australia’s cultural and sporting capital through several new exchanges, including:

• announcing the tour of China National Ballet’s Red Detachment of Women as part of the Arts Centre Asia TOPA program;
• visiting Xinhua School in Chengdu to showcase coaching clinics by Melbourne Victory and Tennis Australia for local media and to announce coaching clinics for school students in Sichuan;
• visiting the Chengdu Museum to witness the signing of an agreement between Chengdu Museum, Jinsha Site Museum, and Museums Victoria that will lead to reciprocal tours of historical and cultural exhibitions; and
• touring Miraikan (Japan’s National Museum of Emerging Science and Innovation), strengthening Museum Victoria’s relationship to secure a future touring robotics exhibition of Maraikan’s world class innovative robotics.

Next steps

Following my successful visit, a number of actions have commenced and will continue to be progressed. These include:

• Senior Victorian Government officials will work closely with Japan’s Agency for Medical Research and Development to develop a framework to support closer collaboration with Japan in medical research development.
• Officials in Victoria and Sichuan will develop initiatives in key areas of mutual benefit, including the possible establishment of a reciprocal presence of the Sichuan Government in Melbourne, to complement our Victorian Government Office in Chengdu.
• The Victorian Government will shortly announce the appointment of Deputy Commissioner for Western China, to be based in Chengdu, the capital of Victoria’s new sister-state of Sichuan.
• The Victorian Government will host the Boao Forum for Asia in Melbourne from
• 7 to 9 December 2016, attracting approximately 250 senior-level delegates from around the world. The Victorian Government will also host a session during the Boao Forum event in Hainan in March 2017, cementing Victoria’s partnership with Asia’s premier economic policy forum.
• The Department of Education will work with China’s Ministry of Education to convene the inaugural China-Victorian Education Leadership Dialogue in Melbourne in 2017.
• The Victorian Government will host a number of reciprocal visits from senior representatives of our Chinese partners in 2017, which will facilitate deepening collaboration.