Spring 2018 update:On 25 October 2018, the Victorian Premier and Chinese Ambassador Cheng Jingye finalised a Memorandum of Understanding between Victoria and China on the Belt and Road Initiative. |  |
The Initiative is one of the world’s largest and most ambitious trade and infrastructure plans to revive the Silk Road by creating two modern transit and trade corridors between China and Europe:
Victoria is the first and only Australian state to reach an agreement on the Belt and Road Initiative with the Chinese government and marks an important step forward in China’s and Victoria’s relationship.
The MoU will provide support for Victorian businesses to unlock significant trade and investment opportunities in China.
The Belt and Road Initiative is China’s vision for working with participating countries to strengthen economic and social linkages by creating two modern transit and trade corridors between China and Europe:
- The land-based ‘New Silk Road Economic Belt’ through Central Asia.
- The ‘21st Century Maritime Silk Road’ looping westward by sea to Europe.
The Initiative aims to create the physical infrastructure (transport and telecommunications), financial initiatives (lending, capital raising) and policy conditions (customs, taxation co-ordination, trade and investment alliances) that will facilitate regional trade and co-operation.
The Victorian Government has worked to ensure the Belt and Road Initiative was open to Victorian businesses.
In May 2017, the Victorian Premier joined more than 90 world leaders in Beijing for the Belt and Road Forum. Opened by Chinese President Xi Jinping, the Forum hosted the United Nations Secretary-General Antonio Guterres and President of the World Bank Jim Yong Kin, as well as the heads of state from countries including Argentina, Italy, Greece, Russia, Indonesia, Sri Lanka and Pakistan.
Participating in a key international panel discussion, the Premier highlighted Victoria’s leadership and achievements in its engagement with China and promoted Victoria’s infrastructure, transport and investment agenda.
The landmark agreement recognises the close relationship between Victoria and China, the result of dedicated engagement at all levels of government, including four visits to China by the Victorian Premier, and follows the decision by the Australia-China Belt and Road Initiative (ACBRI) to establish their headquarters in Melbourne.
The ACBRI is a not-for-profit organisation which provides a coordination point for Australian companies seeking opportunities under the Belt and Road Initiative.
The MOU builds on Victoria’s already strong relationship with China, and will ensure we are best placed to capitalise on the investment opportunities possible through the Belt and Road initiative, meaning more trade, jobs and investment for Victoria..
Want to know more?
If you're a Victorian business interested in pursuing opportunities generated by the Belt and Road Initiative, contact us or the Victorian Government Trade and Investment offices in China to discuss how the Victorian Government can assist them.
Winter 2018 update
The Chinese Government’s plans to create a “Greater Bay Area” (GBA) in Hong Kong, Macau and nine cities in Guangdong, including Shenzhen and Guangzhou, offering opportunities to Victorian businesses positioned to benefit from growth in southern China.
The GBA aims to create a science and technology hub to rival the world’s innovative bay cities such as Tokyo, New York, Melbourne and San Francisco. Parts of the region are already technology centres and the GBA is expected to intensify connections, competition and capital to further drive innovation and development.
Infrastructure projects are already under construction to strengthen connections within the GBA:
- a 55 kilometre-long Hong Kong–Macau–Zhuhai bridge, expected to open in 2018, will reduce travel time between the three cities from four hours to thirty minutes;
- a fast train link connecting Guangzhou, Shenzhen and Hong Kong will be completed in 2018; and
- a bridge and tunnel connecting Shenzhen and Zhongshan is expected to open in 2021.
The GBA will build on the strengths of Hong Kong’s financial and professional services sectors, Shenzhen’s high-tech manufacturing and innovation skills, and the manufacturing strengths of Dongguan and Guangzhou. The GBA is expected to free up the flow of people, logistics, capital and information across the region and by 2020 become a world-class cluster of cities.
Opportunities in the GBA
The GBA’s will be one of the world’s largest economic regions:
- In 2017, the combined GDP of the 11 cities in the GBA reached US$1.4 trillion, or 12 percent of China’s economy.
- The GBA’s eleven cities have a total population of nearly 67 million.
There are likely to be opportunities in science and technological development, particularly in health/life sciences and medtech, as well as increased opportunities to sell premium food and beverage products as incomes continue to increase. There are also likely to be opportunities in education and training, and logistics, all of which are strengths of Victorian companies.
The Victorian Government has built strong government to government relationships in the GBA which will help Victorian companies to develop trade and investment opportunities. The Victorian Government businesses office in Hong Kong is focussed on assisting Victorian businesses looking to expand into the area.
Autumn 2018 update
The Chinese International Import Expo which will run from 5 to 10 November 2018 in Shanghai will mark a change in China’s trade policy with immense implications for Victoria. The Forum was announced at the May 2017 Belt and Road Forum in Beijing by President Xi Jinping which was attended by the Victorian Premier.
The Import Expo is the first step by the Chinese Government to shift its trade strategy from export promotion and trade surpluses to achieving “balanced trade” by importing hundreds of billions of dollars worth of goods and services over the next 10 years. The Chinese Government also aims to reduce tariffs and streamline quarantine and customs processes. Victoria currently exports $6.3 billion worth of goods to China and imports $18.7 billion. Exports of Victorian services such as education and tourism to China are also substantial.
The Chinese Government’s new trade strategy aims to obtain high technology equipment to develop high technology industries and a sophisticated service sector in China, and to supply consumption goods and services such as food, tourism and education to meet the demands of China’s growing middle class. These are sectors where Victoria has strong existing exports and potential for growth.
International trade institutions and rules will be a topic of discussion at the Forum which will bring together trade ministers from many of the world’s major trading countries.
Chinese buyers, international exporters and national trade ministers are registering to attend the Forum. Austrade has announced that Australia will have a stand in the national pavilion and that Commonwealth Trade Minister will attend. The Forum will host an area for businesses and a separate pavilion for national stands. Victorian Government representatives will attend the Forum to support Victorian businesses looking to export goods and services to China.
Summer 2018 update
In 2017 it became clear that although various agencies of the Chinese Government, including the Chinese Ministry of Commerce, would restrict Chinese outward investment, these restrictions would not apply to the science and technology research sector. This enables Chinese businesses to continue to develop their innovation capabilities by investing in overseas leaders in innovation. Chinese science and technology parks, a major focal point for government and private capital for investment, have appeared on the investment landscape in Victoria.
- The Suzhou High Technology Town has established the Jiangsu Victoria Innovation Center in Melbourne with Victorian partners;
- Investments by technology interests from Shandong, Tianjin and Shenzhen are under discussion with Victorian partners.
Areas of interest for Chinese science and technology investors include Victoria’s medtech, new materials, agricultural technology, and new energy industries.
The potential benefits of such investments for Victoria are substantial as they can provide:
- A source of capital for research and start up enterprises;
- Collaborative science and research partners;
- Links with likely substantial generators of intellectual property (IP) in the future;
- Better links to markets for Victorian products and services.
The China Victorian Government Trade and Investment office network is working to identify Chinese investors likely to invest in Victoria using models of engagement most advantageous to the development of Victoria’s science and technology industry.
