Partnerships for prosperity

Victoria’s new China StrategyDeeper understanding

Genuine connections

Mutual prosperity

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Contents

03 Premier’s Foreword

04 ForewordfromtheMinisterforSmallBusiness,InnovationandTrade

05 Foreword from the Consul-General of the People’s Republic of China in Melbourne

06 Foreword from the Governor of Jiangsu

08 ExecutiveSummary

10 KeyOutcomes

12 Victoria and China in context

16 DirectionOne:Strengthengovernmentallianceswithin China’s economic development zones

20 Ahigh-techinnovationpartnershipwithJiangsuProvince

21 CollaborationwithSichuanProvince

22 DirectionTwo:EstablishVictoriaasAustralia’scentre ofexcellenceforAsiainsightsandcapabilities

24 DirectionThree:Buildconnectionsthroughreciprocal culturalpartnershipsandestablishnewplatforms for people-to-people engagement

26 DirectionFour:Attractinvestment,includinginto the Government’s infrastructure pipeline, tosupportVictoria’scontinuedeconomicgrowth

30 DirectionFive:Supportingsuccessful business engagement with China

34 DirectionSix:Targettradeactivityaccording toVictoria’scompetitivestrengthsandspecific marketopportunitiesinChina

38 Implementationandnextsteps

TheLotusBuildingandPeople's Park in Changzhou, JiangsuProvince.DesignedbyMelbourne-based studio505

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TheChinesecommunityhasbeen a part of our communityevenbeforeVictoria was a State. In 1901,atraditionalChinesedragon marched through the streets of Melbourne in the officialparadethatmarkedtheformationofourcountry.Andeveryyearsince,thesheeringenuityandintegrity

of Chinese migrants and visitors has helped make our state a prouder,moreprosperousplace.It’salwaysbeenthisway–anditalwayswill.

MoreChinesestudentsarestudyingatouruniversities,andwe are honoured to host them. More Chinese tourists are visitingthebeautifulreachesofourstate.MoreChinesebusinessesareinvestinghereinVictoria:Australia’sindustrialheartland and its capital of new ideas.

It’saspecialpartnershipthat’sbuiltnotontransactions,butontrustandtradition.Wecan’ttakeitforgranted.Wewanttorefineandperfectthispartnershipsoitisevenstrongerinthefuture.That’swhatourNewChinaStrategyisallabout.

ItravelledtoChinainSeptember2015,inmyfirstofficialoverseas visit as Premier of Victoria. And I pledge to visit ChinaeverysubsequentyearthatIamprivilegedtoholdthisoffice.WhileIwasthere,IhadmanyconversationswithourChinese friends about how we can work together as partners.

I’mproudtotellyouthatVictoriaandJiangsuProvince–ouroldestandmostenduringsisterstaterelationship–havejoinedforcesunderanewinnovationandtechnologicalagreement.We’llbeconvertingourbestideasintosharedcommercialintereststhatwillsupportthenextgenerationofChinese and Victorian growth.

IcanalsotellyouthatVictoriaandChina’sboomingSichuanProvince will work towards becoming sister states in 2016.Thisisabigdeal.

ThisnewrelationshipwillbeVictoria’sanchorinChina’sfastestgrowingregionandourgatewaytoitspeople.Ourcooperationwillcentreontheliveabilityofourcities.We’llbeworkingtogethertobuildsmartandsustainablecitiesforthenextcentury–sharingourideasindesign,environmentalprotection,educationandhealth.

BusinesseshereinVictoriatellmetheywantmoreassistancetoreachintoAsianmarkets.Theywantaloudervoice.AndournewChinaStrategysetsatargettomakeVictoriathenation’sAsiangateway–theplacetogoifyouwanttogaininsight and get the deal done.

There’ssomuchChinaandVictoriacanachievetogether.Webothhaveoureconomicchallenges,butourcombinedpotentialisgreaterthanallofthem.

OnbehalfoftheVictorianGovernment,IamsoproudtohanddownournewChinaStrategy.Oursisapowerfulpartnership.Anditwillonlygetstrongerfromhere.

TheHonDanielAndrewsMP Premier of Victoria

Premier’s Foreword

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AlthoughmytitleistheMinisterforTrade,Ifirmlybelieve that before there can be a trade and an economicrelationship,there has to be a personal relationship.Therecannever be economic opportunityunlessthereisfirstafriendship.

Tothatend,Iamfocusedonbuildingonthealreadystrongfriendships between Victoria and China.

Wehavemanyconnectionsbetweenourpeoplealready.TheChinesecommunityinVictoriahasa150yearhistory,ourChinesecommunityisavitalcornerstoneofoursuccessfulmulticulturalcommunityandweareallricherfortheChinesecontributiontoourculture,fromfoodtofestivals.

MorethanaquarterofamillionVictorianshaveChineseancestry–therearemanyfamilytiesbetweenVictoriaand China.

Around 58,000 Chinese students are enrolled in Victoria’s world-classeducationalfacilitieseachyear–andthose58,000 students take home with them a deep understandingandappreciationofVictoria,andleavebehindthemabetterunderstandinginourowncommunityofChina.ThefriendshipstheyformwiththeirfellowVictorian students form an important link between our people,nowandintothefuture.InNovember2015,Imetwith some of our Victorian alumni in Shanghai, and heard about their experiences in Victoria and their ongoing connectionsandfriendswithinourstate.

Ontopofourconnectionwithourpaststudents,thedepthofourfriendshipisreflectedinthenearly439,000ChinesetouristswewelcometoVictoriaeachyear.Whiletheydonotstayaslongasourinternationalstudentsdo,theystilltakebackhomeafirst-handappreciationforeverythingVictoriahastooffer,andcreateanotherconnectionbetweenourpeople.AndweknowVictoriansarevisitingChinatoo,with38directflightsbetweenMelbourneanddestinationsinChinaeachweekcarryingVictorianswhocomehomewithanewappreciationofChinesecultureandthe Chinese people.

Continuingtofosterandgrowourrelationshipsandbuilduponourfriendshipremainsmynumberonepriority.

Thankyou

TheHonPhilipDalidakis MinisterforSmallBusiness,InnovationandTrade

Foreword from the Minister for Small Business, Innovation and Trade

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Victoriaisplayingasignificantroleinthestrongdevelopment of the China-Australia comprehensive strategic partnership.The36yearoldsister-staterelationshipwithJiangsukeepsflourishing,and their all-round cooperationhasproduced

tangible results which have, in turn, further promoted mutualunderstandingandfriendship.Victoria’sfriendlycooperationwithSichuanisalsomakingencouragingprogress.

In September 2015, Premier Daniel Andrews paid an officialvisittoChina,thefirstinternationalvisitsincehispremiership.Thevisitwaswell-receivedandhighlyproductive.InJiangsu,aseriesofagreementsopenedanew chapter of the Victoria-Jinagsu partnership; in Sichuan, anewsister-staterelationshipwasinitiated;inBeijing,ahighlightofthevisit,afive-yearCulturalExchangeAgreement was signed between the state of Victoria andtheChineseMinistryofCulture’sInternationalCultureAssociation.

Thisfive-yearCulturalExchangeAgreementwasthefirstofitskindbetweentheChineseMinistryofCultureandastategovernmentofaforeigncountry.Itshowcasestheimportance of Melbourne’s role as the “Cultural Capital of Australia”;itisalsoarecognitionofVictoria’scontinuedeffortsinpromotingculturalexchangeswithChina.Amongthemanyculturalexchangeprograms,theMSO’sChineseNewYearConcerthasbecomeanannualattractiontomusiclovers,andthe“AGoldenAgeofChina:QianlongEmperor”exhibitionimpressedeveryonebyarecord-breaking66,700visitors.What’smore,the58,000internationalstudentsfromChinaaddgreatvitalitytotheeducationalcooperationbetweenChinaandVictoria.Itissuchfull-scalehigh-qualitycooperationandexchangethatiscultivatingadeeperunderstandingandlastingfriendshipbetweenourpeoplesandmakingVictoria’srelationshipwithChina“abovetransaction.”

China,animportantengineforworldeconomy,isexperiencingamajoreconomictransformationandupgrade. So is Australia. Given that our two economies are highlycomplementary,therearetremendousopportunitiesforfuturecooperation.Inthepost-miningboomera,AustraliaistobenefitfromtheapproachingFTAboom.Victoria,beingblessedwithcompetitiveagricultureandothergreatpotential,willundoubtedlybenefitfromChAFTA.

TheAndrewsGovernmentofVictoriahasseizedthishistoricopportunityindevelopinganewChinaStrategy.OutliningapracticalplanforVictoria’scooperationwithChina,theStrategyreflectstheprofoundthinkingandfar-sightedvision of Premier Andrews and his government on the China-Victoriarelationship.IntheprocessofdevelopingthisStrategy,theAndrewsGovernmentreachedouttoJiangsuand Sichuan and embraced their ideas, making sure the Strategyisawell-targetedandeffectiveone.What’smoreimpressiveisthataChineseversionoftheStrategyistobereleased together with the English version.

IwarmlycongratulatetheintroductionofthisStrategy,andamconvincedthattheStrategywillliveuptoexpectations.

As Consul-General of China in Melbourne, I am delighted to witnessthatChina-Victoriacooperationbearsrichfruit.Itismydutyandmywilltocontinuetosparenoeffortsinpromotingthismutuallybeneficialrelationship.

MrSongYumin Chinese Consul General in Melbourne

Foreword from the Consul-General of the People’s Republic of China in Melbourne

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In 1979, Jiangsu Provinceformallyestablished the twinning relationshipwiththeState of Victoria as its firstoverseassisterstate.Overdecades,guidedbytheprinciplesofcomplementarity,mutualbenefitand

win-win outcomes, the partnership between Jiangsu and Victoria has made remarkable progress across trade andinvestment,education,culture,scienceandtechnology,health,environmentalprotectionandtourism,andbestexemplifiedthesub-nationalcooperationbetweenChinaandAustralia.

ThecontinuousdeepeningoftheJiangsu-Victoriafriendshipisgreatlyattributedtotheconcertedeffortsof both the Jiangsu and Victorian governments. Since therelationshipwasinstitutionalised,thetworegionshavemaintainedfrequentexchangeofvisitsbetweenseniorleadership.LastSeptember,thePremier,theHon.DanielAndrews,visitedJiangsuduringhisfirstoverseasvisitafterassumingoffice,whichfullydemonstratesthesignificanceofJiangsu-Victoriarelationshiptothenewleadership of the Victorian government. I want to applaud PremierAndrews’sconceptof“transcendingtransactionsandbuildingmutualtrust”andhisgreateffortsinprioritizingtheChinaStrategyasoneofthemostsignificantdevelopment strategies of the Victorian Government.

InNovember2014,thesuccessfulvisitofChinesePresidentXi Jinping to Australia opened a new chapter of the China-AustraliaComprehensiveStrategicPartnership.ThenewlyenactedChina-AustraliaFreeTradeAgreementwillunleashtremendousopportunitiesfortradeandinvestmentcooperationbetweenthetwocountries.Consideringthehighcomplementarityofoureconomiesandtheclosepartnership,thepotentialforfutureJiangsu-VictoriacollaborationwillbeenormousintheneweraoftheChina-Australiarelationship.

JiangsuProvincestandsreadytodeepenitsrelationshipwiththeStateofVictoriathroughimplementingtheimportantconsensusreachedbyournationalleadersunderthe framework of the China-Australia Comprehensive StrategicPartnership.WewillcontinuetheendeavortoopenupanewhorizonofcooperationanddevelopmentatthefreshstartingpointundertheChina-AustraliaSub-nationalLeadersDialoguemechanism,andpromotetradeandinvestmentcooperationinadvancedmanufacturing,technologyinnovation,healthandmedicalcare,environmentalprotection,smarttransportation,modernserviceindustryandagriculture,aswellaspeople-to-people and cultural exchanges.

Itismyfirmbeliefthatthetime-honoredfriendshipbetweenJiangsuandVictoriawillcontinuetoflourish,theprospect of our partnership will be even brighter, and the well-beingofourpeopleswillbeconstantlyincreased.

Governor of Jiangsu Provincial People’s Government

Foreword from the Governor of Jiangsu

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NanjingSkyline

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Executive Summary

Victoria has been building partnerships with China for over 150years.OursisterstaterelationshipwithJiangsucelebratesits37thanniversarythisyear.AndVictoria’slargeandvibrantChinesecommunitycontributessignificantlytothe success of our State.

Thebestpartnershipsaredynamic—theyrespondtochangingcircumstances,theyinnovatetotakeadvantageofnewopportunities,andtheyworktogethertobenefiteachother.

That’swhatVictoriawillbeseekingtodoaswemovethroughtheAsianCentury.ThealignmentofVictoria’scompetitivestrengthsandChina’sneedsispowerful.Andthisalignmentisreciprocal:VictoriafaceschallengesthatwouldbenefitfromChineseexpertise.Therefore,theVictorianGovernment,theChineseNationalGovernment,and the Jiangsu and Sichuan Provincial Governments have workedtogetherwhiledevelopingthisStrategy,toidentifymajorinitiativesthatwecanimplementtogether.

Victoria’spartnershipwithChina—justlikeallgoodpartnerships—needstobestronglygroundedinmutualrespect, trust and understanding. And this needs to be the case not just between our governments, but also between businesses,communitiesandindividuals.Therefore,thisStrategyfocusesstronglyonimprovingconnectionsbetweenVictoriaandChinaateverylevel:creatingnewrelationshipsandstrengtheningourcapabilitytoengageeffectively.TheseconnectionswillnotonlyenrichVictoria’sculturalfabric,buttheyareanecessaryfoundationforrealisingfullythepotentialeconomicbenefitsofour partnership.

TheVictorianGovernment’svisionisthatVictoriabecomesthegatewayconnectingChinaandAustralia.ThisStrategysetsoutapathwaytoachievingthatvision.Itisbuiltaroundthreethemes,ororganisingprinciples—thatwillguidethedevelopmentoftheVictoria–Chinarelationshipoverthelongterm—andsixdirections—thatalignwiththesethemesandwilldrivetheimmediateactionsofGovernment.Thesearesetoutonthefacingpage.

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Vision 愿景

ThatVictoriabecomesChina’sgatewaytoAustraliabasedonthestrengthof ourconnectionsandthedepthofourunderstandingofeachother’speople,culture and economic needs. 维多利亚州与中国之间联系紧密、对于双方人民、澳中文化以及两国经济需求有深入的了解。维多利亚州愿能成为中国进入澳大利亚的大门。

Themes 主题

Deeper understanding 深入了解

Victoria’s engagement with Chinawillreflectadeeperunderstanding of the Chinese people, culture and economic needs – and Victoria will work with China to build a similar understanding of Victoria and Australia.

Genuine connections 诚挚合作

VictoriawillbuildsubstantiveandenduringconnectionswithChinaateverylevel–between our governments (including at the bilateral provincial level), businesses, communitiesandindividuals.

Mutual prosperity 共享繁荣

Victoria will work with China toidentifyeconomicopportunitiesthattargettheintersectionofVictoriaandChina’srespectivecomparativeadvantagesanddevelopment needs – maximising the mutual economic value of our relationship.

Directions 行动说明 StrengthengovernmentallianceswithinChina’seconomicdevelopmentzones—providing

aclearfocustooureffortswhilecreatinganentréetobroaderengagementwithChina 加强与中国经济开发区政府的往来，明确工作开展方向及目标， 同时为更广泛的澳中合作奠定基础

EstablishVictoriaasAustralia’scentreofexcellenceforAsiainsightsandcapabilities 推动维多利亚州成为澳大利亚拥有亚洲视野及能力的卓越中心

Buildconnectionsthroughreciprocalculturalpartnershipsandbyestablishingnewplatformsforpeople-to-peopleengagement 通过文化交流合作，建立联系，并为人员之间的交流搭建新的平台

Attractinvestment,includingintotheGovernment’sinfrastructurepipeline,tosupportVictoria’scontinuedeconomicgrowth 为一系列项目(包括政府大型基础设施项目)吸引投资， 以此为维多利亚州经济的持续增长提供支持

Support successful business engagement with China 为成功的澳中商业往来提供支持

TargettradeactivityaccordingtoVictoria’scompetitiveadvantagesandidentifiedmarketopportunitiesinChina 根据维多利亚州的竞争优势以及经确认的中国市场机会，制定具针对性的贸易活动

Victoria’s new approach to engaging China

Direction one:

Strengthen government alliances within China’s economic development zones – providing a clear focustooureffortswhilecreatinganentréetobroader engagement with China

Direction two:

Establish Victoria as Australia’s centre of excellence for Asia insightsandcapabilities

Direction three:

Buildconnectionsthrough reciprocal partnershipsandbyestablishing new platformsforpeople-to-people engagement

Key Outcomes

Outcomes:

• Existing and new government to government relationships will be strengthened through building new collaborations in mutually beneficial areas, including in innovation with Jiangsu Province.

• A sister state agreement with Sichuan Province will be formalised by the end of 2016.

• A new Deputy Commissioner for China with responsibility for Western China will be appointed by the end of 2016.

Outcomes:

• A coordinated approach to building Asia insights and capabilities will be developed between government, businesses and the education sector to promote innovation and develop skills for the future.

Outcomes:

• Cultural collaborations with China will increase, resulting in additional inbound and outbound cultural exchanges in film, sport and performing and visual arts.

$6.5 billion 2014

$11.5 billion 2026

Victoria’s total share of Chinese investment to Australia to increase from 8 per cent to 20 per cent by 2026.

Victoria’s exports to China anticipated to increase by over $5 billion over the next 10 years.

2014

8%

2026

20%

More Investment and Jobs More Trade

Direction four:

Attractinvestment,including into the Government’s infrastructure pipeline, to support Victoria’s continuedeconomicgrowth

Direction five:

Support successful business engagement with China

Direction six:

Targettradeactivityaccording to Victoria’s competitiveadvantagesandidentifiedmarketopportunitiesinChina

Outcomes:

• Victoria’s total share of Chinese investment to Australia to increase from 8 per cent to 20 per cent by 2026.

• Victorian Government to attract and facilitate $2 billion of Chinese investment into the State, creating 3,000 new jobs within the next ten years.

Outcomes:

• Victorian businesses will increase their engagement with Asia, supported by tailored export support programs; inbound and outbound trade missions and increased awareness of new market trends and opportunities, including those related to e-commerce and the China-Australia Free Trade Agreement.

Outcomes:

• Victoria’s exports to China anticipated to increase by over $5 billion over the next 10 years.

• Overnight expenditure by Chinese visitors to Victoria to increase from $2.2 billion in 2015 to over $3.4 billion by 2026.

• Chinese post-graduate student enrolments in Victoria to grow by 25 per cent over the next 10 years.

$2.2 billion 2015

$3.4 billion 2026

Overnight expenditure by Chinese visitors to Victoria to increase from $2.2 billion in 2015 to over $3.4 billion by 2026.

Chinese post-graduate student enrolments in Victoria to grow by 25 per cent over the next 10 years.

More Visitors More Students

14,500 students 2015

18,125 students 2026

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Our Chinese community is the foundation of our partnershipPeopleareattheheartofourrelationshipwithChina.Victoria’searlyconnectionswithChinacontributedtothestate’svibrantmulticulturalismandlaidthefoundationforathrivingChinesecommunity.Today,VictoriaishometoonethirdoftheChinese-Australianpopulation.OurChinesecommunitycontributessignificantlyacrossbusiness,academia,scienceandmanyotherareas,aswellassharingtheirrichculturalheritagewiththeVictoriancommunity.

Our government relationships have built trust and facilitated collaborationWebuiltonourearlyculturalconnectionstoestablishtheclosegovernment-to-governmentrelationshipsthathaveunderpinned Victoria’s success in China to date, such as our strongsisterstaterelationshipwithJiangsuProvince,whichisinits37thyear.Ourgovernmenttiesarefurtherstrengthenedthrougharound20sistercityrelationshipsatthemunicipallevel.Theserelationshipspromotepoliticalandeconomicdialogueandprovideopportunitiesforcitizenstoparticipateineducational,professionalandculturalexchanges.

Overtime,thesegovernmentconnectionshaveledtoastrongphysicalpresenceineachother’sjurisdictions.VictorianowhasthelargestbusinessofficenetworkofanyAustralianstateorterritoryinChina,aswellasadedicatedCommissioner based in China and a tourism presence. And Melbourne is home to a Chinese Consulate-General, arepresentativeoftheJiangsuProvincialGovernment,andtheJiangsuEducationServicesforInternationalExchange.

Our economic cooperation has delivered mutual benefits ChinacurrentlyranksasVictoria’slargesttwo-waymerchandise trading partner. It’s also our leading source of internationalstudents,investorandbusinessmigrantsandinternationaltourists.

Ofcourse,VictoriaisnotaloneinclaimingChinaasitslargesttradingpartner.However,ourschoolsandtertiaryinstitutionshavefosteredmanyChinesestudentsthroughtheirformativeyearsandbuilttheirEnglishlanguagecapabilities;ourbusinesseshavesharedtheirknowledgeandexpertise,helpingtodriveinnovation;andourpremiumqualityandsafefoodandbeverageproductsarerenownedin China and in high demand. Engaging with Victoria also offersChinagenuineinsightsintoWesternbusinesspracticeswithinitsownregion.

Victoria and China in context

Strong ties between governments, communities and businesses have defined Victoria’s history with China

$20.4bn

29.4%

140%

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58k

VALUE OF TWO-WAY MERCHANDISE TRADE

SHARE OF AUSTRALIA’S CHINA-BORN POPULATION

GROWTH OF GOODS EXPORTS TO CHINA

YEARS

CHINESE INTERNATIONAL STUDENTS

ValueofVictoria’stwo-waymerchandise trade with China in2014-15—Victoria’slargesttradingrelationship

TheshareofAustralia’s China-bornpopulationlivingin Victoria

Growth of Victorian goods exports to China over the last 10years

LengthoftheVictoria-Jiangsusisterstaterelationship,Victoria’sfirstandoldest

Chineseinternationalstudents enrolled in Victorian schoolsandtertiaryeducationproviders in 2015

LENGTH OF SISTER STATE RELATIONSHIP

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Melbourne's Chinatown

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Changing economic landscapes in China and Victoria will bring us even closer togetherChina,hometotheworld’slargestpopulationandwiththesecondlargesteconomy,playsanincreasinglyimportantandinfluentialroleintheglobaleconomy.Itistransformingitselffromacentrallyplannedandinvestment-driveneconomytoamarketandconsumption-ledeconomy.Itsindustryisshiftingfromlowcostmanufacturingtohighervaluegoodsandservices.Andasitcontinuesitstransformationintoamodern,globally-integratedandtechnologicalsociety,withslower but more sustainable growth, it is accomplishing impressive feats such as building the largest high speed rail network in the world.

Victoriaisalsochanging.WeareAustralia’ssecondlargesteconomy—open,stableandcontinuingtogrow.However,structuralchanges(particularlydecliningmanufacturing)arecreatingemploymentchallenges,especiallyforlowskilled,youthandregionalVictorians.

Victoria’sincreasedinternationalfocusprovidesunmatchedaccess to capital, economies of scale, new markets and internationalexpertise.Increasinginternationaltradeallowsbusinessestoexpandbeyondthelimitsofthedomesticmarket,increasingbothemploymentandproductivity.Andengagingwithinternationalpartnersopensavenuesforcollaboration,learningandculturalexchange.

LikeChina,growthinknowledgeintensiveindustriesandtheservicessectorpositionsVictoriaforthegreatestfutureeconomicgrowthandprosperity.TheChina–AustraliaFreeTradeAgreementwillmakeiteasiertopartnerintheseareas.

We each have the capabilities to help the other achieve their aspirationsKeydemographicchangesandincreasedratesofurbanisationandconsumption,togetherwithindustrytransformation,arechallengingourChinesepartners.China’s urban residents are expected to account for 70percentofthepopulationby2030,whilethepopulationshareofpeopleagedover60yearscouldreach27percent.China’sprivateconsumption(currentlyonly37percentofitsGDP)willcontinuetogrowasincomesrise.

ThesefactorshaveledtonewpolicygoalsfortheChineseGovernment,asreflectedinthe13thFiveYearPlan.Victoria’s high value goods and services sectors can help Chinatoachievethesegoals(figure1.1).And,forVictoria,it is growth in these sectors that will secure the state’s futureeconomicprosperity.

Achieving this level of collaboration will depend on the strength of our relationships and deep mutual understanding of cultureWewillbuildthenextchapterofVictoria–Chinarelationsbymaturingourrelationshipsatthegovernment,business,communityandindividuallevels.Buildingourcollectiveculturalcompetencemakesourinteractionsmoreengaging,moremeaningfuland,ultimately,moreproductive.

Victoriaisstrivingtodeveloptheculturalcapabilitiesandlanguage skills of our current and aspiring leaders, as well as skillsoffuturegenerations,todriveincreasedandmeaningfulengagement.Tohelp,wewillcreateandimplementplatformstosupportengagement,suchastheRegionalCityAlliance,enhanceoursisterstaterelationshipwithJiangsuProvinceandbuildnewconnectionsacrossChina,includingwithSichuanProvince.WewillalsoengagecloselywithourChinesediaspora,whostandasinformalambassadors for their language and culture and are a conduitforstrengtheningourtieswithChina.

Wewillalsodriveengagementthroughculturalexchange—intheareasofarts,designandsport.Culturalactivitiesappeal to wide audiences and help us to recognise our similaritiesaswellasappreciateourdifferences.

VictoriabelievesthatthesixdirectionsinthisStrategywillachieve our vision for the future of the Victoria–China relationship—arelationshipthattranscendsthetransactionalandisbuiltonadeepunderstandingofeachother’s people, culture and economies; has genuine connectionsbetweengovernments,businessesandpeopleatitsfoundation;anddrawsoncomplementarystrengthstodrivemutuallybeneficialoutcomes.

It is time to progress to a more modern and sophisticated partnership based on collaboration at all levels

254K

439K

VICTORIANS WITH CHINESE ANCESTRY

CHINESE VISITORS

Victorians with Chinese ancestry—including112,000ChinesebornVictorians—representingapproximatelyone third of the Chinese–Australianpopulation

EstimatedChinesevisitorstoVictoriain2014-15.Chinaisthelargest and fastest growing source ofinternationalvisitorstoVictoriaoverthepast5years

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China’s emerging policy directions and challenges

Victoria’s established and emerging capabilities

Prioritising the development of innovation industries: supportingsectorstobecomegloballycompetitiveandthebackboneofChina’sfutureeconomyincludingbiotechnology,newenergy,newmaterialsandnext-generationinformationtechnology.

Developing China’s West:investinginnewinfrastructure, providing new services (including aged careandeducation),encouragingforeigninvestmentandpromotingecologicaldevelopmenttobalancedevelopmentacrossthecountry.

Supporting sustainable and ecological development: advancing‘ecologicalcivilisation’andpromotinggreen,low-carbon, climate resilient and sustainable development,includingthroughanationwidecarbontrading scheme and commitments to renewable power and green buildings.

Reforming the healthcare system: re-thinking China’s healthcaresystemtoensurethathealthcareisaccessibletoallChinesecitizensandthatitsagedcaresystemisadaptedtothedemandsofanageingpopulation.

Supporting the e-commerce sector:supportingChinesecitizenstosourcequalitygoodsonline,includingsafeandqualityfoodandbeverages,andluxuryandleisuregoodsandservicesbyregulatingthee-commercesectortoensureauthenticityofgoodsandquickerdeliverytimes.

One Belt One Road initiative: aiming to create a chain of infrastructure projects, with seed funding from the new AsianInternationalInfrastructureBank,thatwillrevivethe ancient Silk Road as a modern transit, trade and economiccorridor,coveringapopulationof4.4billionand an expected economic output of $21 trillion.

Increasing demand for education: with rising incomes and structural economic change, the demand for educationisexpectedtoriseandchange,asstudentsseekbetterpreparationforemploymentinChina’sgrowingservice industries and higher value-added manufacturing sectors,andcanaffordanoverseaseducation.

Strengths in innovation: includingmedicaltechnologyandthelifesciences,newenergy,andadvancedmanufacturingtechnologies—increasedcollaborationcan help China pivot towards sustainable growth and higher value industries.

Liveability credentials: oururbandesign,sustainability,education,health,creativeindustriesandnewenergytechnologyproviderscanpartnerwithChineseprovincestobuildcitiesthatrespondtourbanisationpressuresandrealise the Chinese Government’s ecological and sustainable development goals.

A world-class medical sector: our health providers, medicalresearchers,andmedicaltechnologyandpharmaceuticalmanufacturerscanprovideinnovativesolutionstohelpChinareformitsnationalhealthsystem.

Food and fibre: our agricultural sector produces premiumqualityfood—includingmeat,dairy,fruit,grains,wineandvegetables—fromcleanandsafesources.

Tourism and major events capabilities: ourcreativeandculturalsectorandvisitoreconomyisworld-classandcanassistourChinesepartnerstosuccessfullyshowcasetheircreativeindustries,developculturalprecinctstoprovidemoreleisureactivitiesforthegrowingmiddleclass and host global events.

High value professional services: our services sector has world-classcapabilitiesandcanhelpmeetChina’sincreasingdemandformoresophisticatedservicesasitseconomydiversifies,itspeoplebecomewealthieranditlookstomeetitsinfrastructureambitions.

International education:oureducationsectoriswellplacedtomeetChina’srisingdemandforhighqualityeducation—wehaveworld-classschoolingandtertiaryinstitutionsthatcandeliverservicesinChinaandprovideapremiumexperienceforinternationalstudents coming to Victoria.

Figure1.1–AlignmentbetweenChina’semergingpolicydirectionsandVictoria’sestablishedandemergingcapabilities.

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ThescaleofopportunityinChinaforVictorianbusinessescannot be understated. China’s total goods and services importshavegrown387percentfrom2003–13.AndtheopportunitiesavailableforVictorianbusinesseswillgrowsubstantiallywiththeChina–AustraliaFreeTradeAgreement(ChAFTA).ButVictoriaisalsooneofmanystatesandcountriescurrentlyoperatingintheChinesemarket.Tohaveanimpact,VictoriawillfocusitseffortsonpartneringwithChineseprovincesinkeyregionswithcommoninterestsandabilities.Provinciallevelpartnershipscan facilitate access within broader economic zones and market clusters and be anchors for Victoria’s engagement across China.

Opening doors in ChinaTheVictorianGovernmentwillpavethewayforenhancedengagementwithChina.ThisisparticularlyimportantinChina,wheregovernmentplaysacriticalroleinbusiness,andinfluencestradeandinvestmentoutcomes.Toachievethis,thePremierwillvisitChinaannuallyandeveryMinisterwilltraveltoChinaduringthefirstandsubsequenttermsofgovernment.TheVictorianGovernmentwillalsoidentifyopportunitiestoshareitspolicyexpertisetoopendoorsfornewkindsofcollaboration—asiscurrentlyoccurringinhealthcare.

Anchoring our engagement through partnerships with Jiangsu and Sichuan ProvincesJiangsu remains one of Victoria’s most important global partnersbasedonourthrivingsisterstaterelationshipthatwasestablishedin1979.Wehaveahistoryofsuccessfultrademissions,visits,businessprograms,andeducation,health and cultural links. Situated in China’s well developed east,JiangsuisChina’ssecondlargestprovincialeconomyandisVictoria’sentréeintotheYangtzeRiverDeltaEconomic Zone.

SichuanisakeyprovinceintheChineseGovernment’sWesternDevelopmentPlanandoneofChina’sfastestgrowingprovincialeconomies.VictoriahasarelativelynewrelationshipwithSichuan,butit’salreadydeliveringbenefitsforbothsides.TheLetterofIntentsignedwithSichuanaswedevelopedthisStrategy—committingtoasisterstaterelationshipin2016—willbecrucialforVictoria’sengagementwithChina’sburgeoningwestandtheWestTriangleEconomicZone.

Victoria’s engagement across China will also be supported through its network of Victorian Government Business Offices(VGBOs)locatedineachofthekeyareasforVictoria’seconomicengagementinChina:Shanghai,Beijing,HongKong,NanjingandChengdu,anditstourismpresencein Shanghai and Guangzhou.

Direction one: Strengthen government alliances within China’s economic development zones—providing a clear focus to our efforts while creating an entrée to broader engagement with China

Case studyJiangsu

Victoria’ssisterstaterelationshipwithJiangsuhasledtomanyhighlyproductivecooperativearrangements:

The Innovation and Technology Collaboration Agreement willstrengthenthescientific,technologicalandindustrialcooperationbetweenVictoria and Jiangsu through joint research and development(R&D)activities.

The Victoria-Jiangsu Joint Economic Committee, establishedin1987,meetseverytwoyears,toreflectontherelationshipandagreetonewareasofcooperation.

Education partnerships between the Department of EducationandTrainingandtheJiangsuProvincialDepartmentofEducationhaveresultedinenormousgrowth of sister school partnerships and student mobilitybetweenVictoriaandJiangsuProvince.

The Hamer Scholarship Program, established in 2012, allows Victorian professionals to undertake intensiveChineselanguagestudyandculturalimmersion in Jiangsu.

Monash University’s Suzhou campus, established in 2012,isapartnershipwithSoutheastUniversity.MonashisthefirstAustralianuniversitylicensedtooperate in China.

Sichuan

Victoria’srelationshipwithSichuanisrelativelynew,buthasalreadydeliveredmutuallybeneficialoutcomes:

The Letter of Intent signed between the Victorian Government and the Sichuan Government will lead to the signing of a sister state agreement in 2016.

The Sister Park Agreement between the Phillip Island NatureParksandtheChengduGiantPandaBreedingCentreencouragesnewinitiativesintourism,environmentalconservationandscientificresearch.

17

Victoria will:•strengthengovernment-to-governmentrelationships

through the Premier’s annual trips to China and visits byallCabinetMinistersduringeachtermofgovernment,andencouragereciprocalvisitsbykeypartners

•leverageVictoria’sworld-classpolicyframeworksasthebasisfornewcollaborationswithChina,aimedatstrengtheninggovernmenttiesandcreatingneweconomicopportunities

•increaseresourcesfortheVGBOsinChina,includingappointinganewDeputyCommissionerforVictoriaforWesternChina.

Victoria and Jiangsu will:•enhancethesisterstaterelationshipbyenablinggovernmentofficialstocollaboratemorecloselybetweenbiennialmeetingsoftheVictoria-JiangsuJointEconomicCommittee.

Victoria and Sichuan will:•formalisetheirrelationshipbysigninganewsister

state agreement in 2016, which will anchor Victoria’s engagement in the burgeoning southwest of China.

Case studyGovernment relationships building opportunities in health

ThedemandforhealthcareinChinaisgrowingatan ever increasing rate and China is undertaking an enormous reform agenda to meet this demand. Thereformwilleventuallybeimplementedinover25,000hospitalsnationwideafterpilotinginfivecities,fundamentallychangingthehealthcarelandscape in China.

Throughourgovernmentrelationships,Victoria’shealthcare and biosciences industries can help Chinese governments deliver this reform. In September2015,thePremierfinalisedtwohealthcollaborationagreementswithJiangsuandSichuanProvinces.Theseagreementsprovidescopetojointlydesignhospitalsandclinics,trainhealthstaffand medical specialists, and promote the use of the latestmedicaltechnologies.TheyopenupunprecedentedopportunitiesforVictorianhealtheducationandtrainingproviders,hospitaloperatorsand consultancies.

8.4%

7.5%

FORECAST GROWTH RATE

LARGEST ECONOMY

FORECAST GROWTH RATE

LARGEST ECONOMY

Jiangsu’s forecast growth rate in 2015

Onitsown,Jiangsu’seconomywould have ranked as the 16th largesteconomyintheworldin2014

Sichuan’s forecast growth rate in 2015

Onitsown,Sichuan’seconomywould have ranked as the 28th largesteconomyintheworldin2014

28TH

16TH

Premier Daniel Andrews and ExecutiveViceMayor ofBeijingLiShixiang

18

Shanghai viaduct

19

West Triangle Economic ZoneMajor cities Chengdu (2014GDP:US$163.7bn)

Chongqing (2014GDP:US$232.22bn)

Victorian connectionVGBOinChengdusince2013

Sichuan is a future sister state partner for Victoria

Economic profile Theregionaleconomicdevelopmentplanarticulatesthis Zone would become one of the strongest regions in Chinaby2020.

Nationalsupportisprovidedforindustriesincluding:tourism,financialservicesandtechnologydevelopmentand services, coupled with strong environmental protectionrequirements.

Pearl River Delta Economic ZoneMajor cities Guangzhou (2014GDP:US$271.84bn)

Shenzhen (2014GDP:US$260.48bn)

Note:EconomicZoneexcludesHongKong

Victorian connectionNodirectpresence,butincreasingfocus(particularlyviatheHongKongVGBO,established in 1990)

Economic profile Theregionaleconomicdevelopment plan aims to develop this region as a centre of advanced manufacturing and modern services regions, as well as a centreforinternationalshippinglogistics,trade,conferences,exhibitionsand tourism.

Bohai Economic Rim

Major citiesBeijing (2014GDP:US$347.24bn)

Tianjin (2014GDP:US$255.95bn)

Victorian connectionVGBOinBeijingsince2012

Economic profile Thisregionhasastrongfocusonheavyindustriesand manufacturing, and is a growth cluster for automotive,electronicsandpetrochemical industries.

AdditionalstrengthsincludeeducationandR&D(Beijing)andaviation,logisticsandshipping(Tianjin).

Yangtze River Delta Economic ZoneMajor cities Shanghai (2014GDP:US$383.55bn)

Suzhou (2014GDP:US$228.87bn)

Nanjing (2014GDP:US$141.7bn)

Victorian connectionVGBOinShanghaisince2006andNanjingsince2003

Jiangsu has been a sister state of Victoria since 1979

Economic profile Heavilyindustrialisedregionwith advanced transport infrastructure.

Strengthsinfinance,banking,propertyandlogistics(Shanghai),automotive(ShanghaiandNanjing)electronics,educationandenergy(Nanjing)andmanufacturing(Suzhou).

Guangzhou

Fuzhou

Hangzhou

Nanjing

Ji’nanQingdao

Daljan

Shijiazhuang

Shenyang

Changchun

Harbin

XiningLanzhou

Xi'an

Taiyuan

ChengduWuhan

Zhengzhou

Hefei

Kunming

Guiyang

ChangshaNanchang

Haikou

Hong KongMacau

Ürümqi

Lhasa

Yinchuan

Hohhot

Nanning

Chongqing

Shanghai

TianjinBeijing

2 3

4

1 2 3 4

1

Victoria’s engagement with China’s main economic zones

VictorianGovernmentBusinessOffices

TourismVictoriaoffice

20

A high-tech innovation partnership with Jiangsu Province will convert 21st century ideas into shared commercial interestsVictoriaandJiangsuarebothcentresofinnovation.Victoriahasahighlyskilledworkforceandahistoryofinnovation.Wehaveaworld-classuniversitysectorandR&Dcommunitywithstrengthsinadvancedmanufacturing,advancedmaterials,biotech,foodandfibreandhealthrelated products and services.

TheChineseGovernmentranksJiangsuasitstopprovinceforinnovationandJiangsureceivesthemostpatentsofanyChinese province.

Why should Victoria and Jiangsu work together?

Bothgovernmentsarelookingforopportunitiestoinnovateandcreatethejobsofthefuture.Workingtogether,VictoriaandJiangsucanrealisethecommercialpotentialoftheirR&Dcapacity.

During the Premier’s visit to China in September 2015, Victoria and Jiangsu announced a major new agreement at theJiangsuIndustrialTechnologyResearchInstitutethatwillstrengthenourscientific,technologicalandindustrialcooperation.Wewillfocusourcooperationonareasofmutualinterest,suchascleantechnologyandenvironmentalprotectioninnovation,whichareprioritiesofbothparties.Ongoingpracticalpartnershipswillprovideapipeline of new ideas that will be converted into new companiesandjobs,therebysharpeningoureconomy’sdynamicedge.

How do we all benefit?

InternationalR&Dpartnershipsgeneratecommercialinnovationswithspilloverbenefits–internationalnetworksand further investment. Victorian entrepreneurs and researchers can also access China’s booming market from sectorswithextraordinarygrowthpotential.

JointprojectswillcomplementexistinginnovationcooperationsuchastheMonashUniversity–SoutheastUniversityJointResearchInstitute(focusingonnanotechnology,bioinformatics,water,energyandadvancedmanufacturing)andtheBurnetInstitute’sNanjingBioPointDiagnosticsTechnologylaboratory(developingdiagnostictoolsinareasofunmetmedicalneed).

ThisnewpartnershipispartoftheGovernment’sbroaderinnovationstrategyandwillbuildonthe$60millionalreadycommittedtotheLaunchVicinitiative,whichsupportsentrepreneurstomaketheirideasacommercialreality.

CityWallofNanjing

Victoria and Jiangsu will:•drivehightechandR&Dcollaborationbetweenbusinessesandresearchinstitutions.

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Collaboration with Sichuan Province can provide a platform for developing smart and liveable cities and precincts in ChinaVictoriaandSichuanhavestrongliveabilitycredentials.

Victoriahasgainedastrongreputationforliveabilitythroughitsstrengthsacrossthefullrangeofliveabilityareas,includingurbandesign,sustainability,environmentalprotectionandmanagement,culturalprecinctdevelopment,governanceandhealthandeducationservices.Melbourne—Victoria’scapital—hasrankedastheworld’smostliveablecityforfiveconsecutiveyears.Andin2012,PortFairy—aVictoriantown—wasrankedastheworld’smostliveabletownwithapopulationunder20,000.

Sichuan is one of China’s largest provincial economies, withrealGDPgrowthof8.5percentin2014.Chengdu—Sichuan’scapital—ismainlandChina’smostliveablecityandwasidentifiedasoneofthisdecade’sfastestgrowingcities.ChengduwasalsooneofthefirstcitiestobeapprovedasaNationalEcologicalEnvironmentDemonstrationArea.Itisforging ahead with a new development model that ensures urbanisationisecologicalandsustainable.

Why should Victoria and Sichuan work together?

VictoriaandSichuanwillbenefitfromeachother’sexpertise.

Victoriahasalonghistoryofenvironmentalgovernance,andhastheworld’ssecondoldestenvironmentalregulatoryagency.OurstrongcapabilitiesinmanagingairandwaterpollutionandprovidingeffectivewastemanagementsolutionsaredirectlyrelevanttochallengesstemmingfromChina’srapidindustrialisationandurbanisation.Ourhealthandeducationsystemshavealsobeenkeytoattractingagrowingpopulationandinvestmenttothestate.

Sichuan’sexperienceofrapidpopulationgrowthhasbuiltexpertiseinanumberofareasincludingurbandevelopment,infrastructureplanningandnewenergytechnologydevelopment.VictoriacanlearnfromthisexperienceasitfacesaperiodofthehighestpopulationgrowthofanyAustralianjurisdictionandaspirestomaintainitsliveabilityreputationintothefuture.

How do we all benefit?

Throughourfuturesisterstaterelationship,VictoriaandSichuanwillpartnertorealiseourjointambitiontodevelopsmartandliveablecities.Thispartnershipwillcapitaliseonourrespectivestrengths,whichhaveearnedMelbourneandChengdutheirliveabilitycredentials.

ThispartnershipwillprovideaplatformforVictorianandSichuanbusinessestobesolutionsbrokersforChinesecitiesseekingtoimprovetheirliveability.Ourgovernmentswillpartnerwithindustrytoexchangeexpertiseandpromotebusinessengagementinhealth,education,thecreativeindustries, urban design and other professional services. It can be expected that demand for all of these services will increaseexponentiallyasChinacontinuestostrivetowardefficient,inclusiveandsustainableurbanisation.

Victoria and Sichuan will:•partnertobecomeasolutionsbrokerforChinesecitiesseekingtobecomemoreliveablecities,connectingtheirrespectivepublicandprivateexpertisetoopportunitiesstemmingfromChina’surbanisationchallenges

• develop knowledge exchange and research collaborationinitiativesinliveabilitysectors.

TianfuSquare,Chengdu

22

AsVictoria’srelationshipwithChinamatures,ourengagementwillprogressfromatransactionalnaturetocollaborativerelationshipsthatgeneratemoreproductiveoutcomes.

Torealisethesebenefits,theGovernmentaimstoestablishVictoria as Australia’s centre for excellence for Asia insights andcapabilities.

Driving the development of Asia insights and capabilitiesTheGovernmentisdeterminedtomakeVictoriathegatewaybetween China and Australia. Victoria’s intercultural competence makes us a natural point of contact for Chinese wantingtodobusinessinAustralia,aswellasforAustralianswantingtodobusinessinChina.AndwehaveexceptionalaccesstointernationalbusinesschambersandabaseofinstitutionalexcellenceforengagingwithAsia.

Therefore,theGovernmentissettingatargetofmakingVictoria Australia’s preeminent state for understanding and engagingwithAsia.Inparticular,wewillaccelerateeffortstoattainstrongerAsiacapabilitiesingovernment,businessandeducation,andofAsianmarketandconsumerinsightsthatstimulatebusinessinnovationandexportsuccess.

Building the skills of the next generation As part of our commitment to establishing Victoria as the EducationState,weareequippingyoungVictoriansforthisAsianCentury.ThenewVictorianCurriculumincorporatesstudiesofAsia,interculturalcapabilities,andothercriticalskillsforengagingwithChinaandAsia.Languages,includingAsianlanguages,arealsoakeyelementoftheVictorianCurriculum.Over52,000VictorianstudentsinVictorianGovernmentschoolsstudyChinese—anincreaseofover200percentbetween2008and2014.Furtheropportunitiesforstudentstodeveloptheirculturalcompetenceandlanguageabilitiesinclude:

•ImmersionprogramstoexperienceChina—TheVictorianYoungLeaderstoChinaProgram(VYLC)providesvaluablein-countrylearningopportunitiesforYear9students.

•Sisterschoolpartnerships—143Victorianschoolsarepartnered with Chinese schools, which supports the curriculum,languagelearningandacquisitionofskillsfortheAsianCentury.

•InternationalStudentProgram—Over4,100ChinesestudentswereenrolledinVictorianschoolsinJuly2015.

•SixVictorianschoolsarecurrentlydeliveringtheVictorianCertificateofEducationinChinainpartnershipwith19Chinese schools.

Building the skills of our current workforceTheVictorianGovernmentbelieveshelpingouremergingleaderstobuildtheirAsialiteracywillcreatemoreopportunitiesformeaningfulandeffectivelongtermrelationships.

TheVictorianGovernmentwillcontinuetosupportemergingleadersintheprivate,public,notforprofit,academicandcreativesectorsthroughtheHamerScholarshipsProgram.

TheVictorianGovernmenthascommittedtoimprovingtheAsiacapabilitiesofthepublicservicetoensuretheprosperityofourofficialrelationswithAsia.Aspartofthiscommitment,the Victorian and Jiangsu governments will foster public service exchangesthatenableemergingleaderstohaveanin-countryexperiencetodevelopAsiacapabilitiesandlanguageskills.

Direction two: Establish Victoria as Australia’s centre of excellence for Asia insights and capabilities

99

289

66k

4,107

2014

HAMER SCHOLARSHIPS

VYLC PROGRAM PARTICIPANTS

STUDENTS STUDYING CHINESE

CHINESE INTERNATIONAL STUDENTS

AUSTRALIA CHINA BUSINESS COUNCIL RELOCATED

VictoriansawardedaHamerScholarshiptostudyatinstitutionsinJiangsu

Year9studentsand45teachershaveparticipatedintheVictorianYoungLeaderstoChinaprogram,principallyinBeijingandShanghaias well as in Jiangsu Province

StudentsstudyingChinesein2014—over 52,000 students studied Chinese in Victorian Government schoolsandanadditional14,000studentsstudiedChineseat30communitylanguageschools

2,361Chineseinternationalstudentswere enrolled in Victorian Governmentsecondaryschoolsand1,746innongovernmentsecondaryschoolsinJuly2015

Australia China Business Council relocateditsnationalandstateofficestotheVictorianGovernment’sInternationalChamberHouse

23

Case study Building Asia literacy

The Victorian Young Leaders to China Program

TheVictorianGovernment’sVictorianYoungLeaderstoChina(VYLC)Programishelpingtobuildstudents’Asiacapabilitiesthroughanin-countryChineselanguageandculture experience.

BetweenMarch2014andDecember2015,397studentsfrom57secondarycollegesacrossVictoriaexperiencedthislifechangingopportunitytoliveandattendschoolinChina.Oversixweeks,studentsimprovedtheirChineselanguageproficiency,leadershipskillsandinterculturalunderstanding.Theaccompanying56teachersalsoimprovedtheirprofessionalpractice.

Overfiveyears,1,500studentsand150teacherswillparticipateinthisprogram.

Learning Local Learning Global Network

TheLearningLocalLearningGlobalNetworkisanetwork of Victorian schools that have sister school partnersinChina.TheNetworkusesindustryexposuretoimprovestudents’Chinaliteracy.ThreeschoolshavepartneredwithMurrayGoulburn,aGippsland-baseddairycompanywithamanufacturingfacilityinQingdao,tobuildindustryspecificskillsandChinaliteracyforyoungpeopleaimingtoworkintheindustry.

Long standing relationship with the Ministry of Education, China and with HANBAN

HANBANisChina’snationalofficeforteachingChineseas a foreign language and supports the learning and teachingofChineseinVictorianGovernmentschoolsbyappointingaChineseLanguageAdviser,runningtheAssistantstoTeachersofChineseprogram,andestablishingConfuciusClassroomsandin-countryprograms for students and teachers that are co funded bytheVictorianandChinesegovernments.

Victoria will: • establish Victoria as Australia’s centre of excellence for Asiainsightsandcapabilities,anddriveacoordinatedapproach between government and the business and educationsectorsthatpromotesinnovationandbuildsknowledgeandcapabilities

•ensuremoreVictorianshaveaninternationalexperienceaspartoftheirstudiesbycontinuingsupportfortheVictorianYoungLeaderstoChinaProgram,HamerScholarships,SirJohnMonashScholarships, and the Commonwealth Government’s NewColomboPlaninitiative

•continuetoemphasiseAsialiteracyintheschoolcurriculum,maintainthelongstandingrelationshipwithHANBANtostrengthenthelearningandteachingof Chinese in Victorian schools, and support sister school partnerships between Victorian and Chinese schools

•improvetheAsiacapabilitiesofthepublicservicethroughlanguage,cultureandexchangeopportunities,including with Jiangsu.

ParticipantintheVictorian YoungLeaderstoChinaProgram

24

Takenliterally,theChinesewordguanxi means ‘relationships’.Inpractice,theconceptismuchricher.Itemphasisestheimportanceofpersonalrelationshipsofmutualbenefitand,inChina,thesearecentraltopersonal and business success.

OurgoalistofostergenuinerelationshipswithChinathatarestrong,resilientandenduring.Todothis,wemustdeveloptrust,basedonadeeperunderstandingofChina—its people and culture, as well as its economic needs. Strong trust between Victoria and China will provide a solid foundationforallofourfutureconnections.

Using culture to develop understanding

Culturalactivities—encompassingthearts,designandsport—enableaudiencestoshareinterests,developconnectionsandenrichcommunityengagement.

SharingofChineseculturalactivitiesdeepensappreciationofcultureatthecommunityandindividuallevels.Culturalexchangescanbehighprofileevents,suchasthehighlysuccessful‘GoldenAgeofChina—QianlongEmperor’exhibitionattheNationalGalleryofVictoria.Buttheycanalsobecommunity-levelactivities,suchasChineseNewYearcelebrationsorsportingconnections.Between2008and2012,79percentofVictorianartsorganisationsengagedinculturalexchangeactivitieswithAsia.

WhiledevelopingVictoria’snewChinaStrategy,theGovernmentnegotiatedaCultural Exchange Agreement withtheChineseNationalGovernment,whichwillenabletheexchangeoffestivals,exhibitions,performancesandartist-in-residenceopportunities.

Victorialooksforwardtoexcitingcollaborationsandexchanges that will take place under this agreement betweenChineseartists,organisations,culturalinstitutionsandgovernments.ItwillbringChineseculturalactivitiestoVictoria,boostingourcreativeandculturalindustriesandour cultural connectedness.

Paving the way for new connectionsVictoriahasalargeandlongstandingChinesecommunityofover254,000peoplewhohaveawealthoflanguageskills,culturalknowledgeandpeople-to-peopleconnectionsonwhichthebroadercommunitycoulddraw.

TheVictorianGovernmentwillsupportVictoria’sChinesediaspora to develop outreach programs that will develop thebroadercommunity’sunderstandingofChinesecultureandpeople-to-peopleconnectionsinVictoria.

BuildingconnectionsbetweenyouthsfrombothnationsiscrucialtostrengtheningVictoria–Chinarelationsforthenextgeneration.TheGovernmentwillsupportopportunitiesforyouthstodeveloptheirpersonalconnectionsinordertosharenewideas,fosterentrepreneurship and increase their cultural competence.

Direction three: Build connections through reciprocal cultural partnerships and establish new platforms for people-to-people engagement

Case studyThe Golden Age of China

MelbournewasthefirstcityoutsideChinatohostanexhibitionfromthePalaceMuseuminBeijing’sForbiddenCity.The‘GoldenAgeofChina—QianlongEmperor’exhibitionattheNationalGalleryofVictoria(NGV)broughtmorethan120historicallyandculturallysignificantChineseobjectstoMelbourne.

Theexhibitionattracted66,739visitors,doubleprojectedvisitornumbers,reflectingVictorians’curiosityanddesiretolearnaboutChina.

Victoria will: •promoteanddevelopnewculturalcollaborationsthroughthemajornewagreementnegotiatedbetween the Victorian Government and the ChineseNationalMinistryofCulture

•continuetocarryoutculturalexchangeinitiativeswith Jiangsu and Sichuan provinces

•promotesportsbasedcollaborationandexchangewith China

• promote knowledge sharing and people-to-people connectionsthroughChinesecommunity-ledcultural outreach programs

•establishaChineseFilmFestivalthatshowcasesthebreadthofChinesefilm

•stageamajorAsiaPacificperformingandvisualartsfestivalinMelbourneoverthesummerof2017.

$1.0bnCULTURAL TOURISM

CulturaltourismcontributiontotheVictorianeconomy

25

ArtistoftheAustralianBalletJessicaFyfeontourinBeijing.PhotobyLisaTomasetti.

26

Victoriaisaworld-classlocationtoinvestin—withastableeconomythatiscontinuingtogrow,atransparentbusinessenvironment,atriple-Acreditrating,andthelowestbusiness tax rate of Australian states. And Victoria needs andseeksinvestment—tocreatejobs,driveinnovationanddeliverpublicinfrastructureatacompetitivecost.

ChineseinvestmentinAustraliaisbooming,growingbyover2,700percentbetween2004and2014.ChangestoForeignInvestment Review Board Screening processes, agreed throughtheChina–AustraliaFreeTradeAgreement,meanthereispotentialforthisgrowthtoacceleratefurther.

TheVictorianGovernmentwillmakeitaprioritytoattractmoreofthisinvestmenttoVictoria,assiduouslypromotingVictoria’sinvestmentopportunitiesandmakingourinterfacewithforeigninvestorsaseasytonavigateas possible.

What are we currently doing to attract Chinese investment?TheVictorianGovernmenthasadedicatedinvestmentattractionagency(InvestVictoria)thatcanbeaccesseddirectlyorthroughanyoneoftheVictorianGovernment’sBusinessOfficesinChina.InvestVictoriaprovidesarangeofconfidentialbusinessfacilitationservicestoassistbusinesseswithmarketentryintoAustralia—includingmarketpotentialevaluation,businessintroductions,sitelocationservices,guidanceongovernmentpolicy,processes and approvals, and ongoing client support.

As well, the Victorian Government supports high net-wealth individualswhowishtoinvestsignificantlyinVictoriaandsettleherethrough:

•acceleratedprocessingtimesforvisanominationapplications

•informationabouttradeandinvestmentopportunitiesin Victoria

•contactsinthewealthmanagementandfinancialservicessectorwhocanofferspecialisedassistanceandadviceoncomplyinginvestments.

What more can we do to attract investment?TheChina–AustraliaFreeTradeAgreementwillmakeprivateChineseinvestmentinAustraliasimpler,byraisinginvestment-screeningthresholdsinnon-sensitivesectorsfrom$252millionto$1,094million.

TheVictorianGovernmentwillcontinuetoimprovethepromotionofVictoriaasahighvalueandhighreturninvestmentdestinationforChineseinvestors.OpportunitiesincludetheGovernment’sinfrastructureprogram—thelargestinVictoria’shistory,withmorethan$17billiontobeinvestedinroadandpublictransportprojects—andtheRenewableEnergyRoadmap,whichcommitsVictoriatogenerating20percentofitselectricityfromrenewablesourcesby2020.

TheVictorianGovernmentisalsoleadinganurbanrenewalprogram which includes Fishermans Bend (Australia’s largesturbanrenewalarea),E-GateandArdenMacaulay.Theseprojectsrepresentsignificantcapitalinvestmentandpartnershipopportunities.

PotentialChineseinvestorsinVictoriamustnavigateanunfamiliarbusinessenvironment.TheGovernmentwilldoitsparttoeasetheirexperiencebyfurtherimprovingitsinterfacewithpotentialforeigninvestors,ensuringitisatransparent and streamlined process.

TheGovernmentwillcontinuetoattracthighnet-worthindividualstotheStatethroughavarietyofsupportservices,includingvisanominationservices.

Direction four: Attract investment, including into the Government’s infrastructure pipeline, to support Victoria’s continued economic growth

Case StudyInfrastructure Victoria

TheVictorianGovernmenthasestablishedInfrastructureVictoria—anindependentbodythatwillensure Victoria’s immediate and long term infrastructureneedsareidentifiedandprioritisedbasedonobjectivetransparentanalysisandevidence.

Thebodywillreleasea30yearinfrastructurestrategyforVictoriaandassesstheGovernment’spriorityinfrastructure projects and funding commitments againsttheGovernment’s5yearinfrastructureplans.

Infrastructure Victoria will provide the public, includingpotentialforeigninvestors,withcertaintyaround the state’s infrastructure needs and the Government’s commitment to meet them.

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The Victorian Government will:• promote the Government’s infrastructure pipeline andcontinuetoimproveourChina-specificinvestment assistance services

•attractmoreprivateChineseinvestorsbyprovidingmoreinformationandsupporttopotentialinvestorsonthenewinvestmentrequirementsforinvestorandbusinessmigrationvisas

• ensure seamless engagement with foreign investorsbybettercoordinatingandresourcinginvestor services across government, under the leadership of Invest Victoria.

$64.5bn

$4.54bn

95%

CHINESE INVESTMENT IN AUSTRALIA

INVESTMENT BY VICTORIAN-NOMINATED MIGRANTS

SIV HOLDERS ARE CHINESE

Chinese investment in Australia, making China Australia’s 7th largest overall investor,with2.3%oftotalforeign investment

Investmentby5,018Victorian-nominated investor and businessmigrants,from1July2011to30June2015

95%ofSignificantInvestorVisa holders in Victoria are Chinese

Fishermans Bend Urban Renewal Area

Outcomes:Victoria’s total share of Chinese investment to Australia to increase from 8 per cent to 20 per cent by 2026.

Victorian Government to attract and facilitate $2 billion of Chinese investment into the State, creating 3000 new jobs within the next ten years.

By 2026 Victoria aims to facilitate $2 billion of Chinese investment into Victoria and to creating 3,000 jobs.

Since 2005, Victoria has facilitated $1.2 billion Chinese investment, creating 1,753 jobs.

2014

8%

2026

20%

28

ThePortofMelbourne

29

The future is bright for Victorian exports to China

World’s leading merchandise traderChina is the world’s leading trader as measured bythesumofexportsandimportsofgoods.

15 cities with over 10 million peopleChinahas15citieswithmorethan10millionpeople.Continuingurbanisationmayadd100millionmorepeopletoChina’scitiesby2020.

75% of urban consumers to be middle class by 2022By2022,75percentofChina’surbanconsumersare forecast to earn a middle class income of between 60,000 to 229,000 renminbi.

World’s largest economy by 2026China is forecast to overtake the UnitedStatesinnominalGDPby2026.

US$1.9 trillion of goods imports in 2014 Although China is Australia’s leading merchandiseexportdestination,taking33.9percentofitsgoodsexports,thisisjust5 per cent of China’s total goods imports from all countries.

China will continue to drive demand across almost all Victorian sectors

Key China–Australia Free Trade Agreement (ChAFTA) outcomes for Victoria

Most-FavouredNation(MFN)clause

ProtectsAustralia’scompetitivepositionintothefuture,ifChinaextendsanymorebeneficialtreatmenttoothertradepartnersinkeysectors

Investment LiberalisedscreeningforprivateChineseinvestorsinnon-sensitivesectors

Foodandfibre Phasedeliminationorreductionoftariffsonagriculturalproductsandprocessedfoods,onparorbetteraccesstoChinathananyotherFTApartner

Visitoreconomy Australian providers able to operate Australian-owned hotels and restaurants in China

Australian travel agencies/tour operators able to establish subsidiaries in China

Medicaltechnology,pharmaceuticalsandhealthcare

Tariffreductionsonmanyproducts,includingpharmaceuticalsandhealthproducts

AustralianprovidersabletoestablishwhollyAustralian-ownedhospitalsandagedcareinstitutionsinChina

Professional services Improvedmarketaccessforprofessionalservices,includinglegal,telecommunications,financial,construction,engineering,architecturalandurbanplanningservices

Victoriaiswell-positionedtocapitaliseonChina’seconomicsize(asthesecondlargesteconomybynominalGDP)anddemandforimports.NotonlyareVictoria’s economic strengths aligned with China’s needs

(seefigure1.1onpage15),butmanyofVictoria’sgrowthsectorsaresettoreceivenewandsignificantlyimprovedmarketaccessthroughtherecentlysignedChina–AustraliaFreeTradeAgreement.

30

Victoria’seconomyistransitioningtoamorediversifiedindustrybase,bringinghighvalue-addedproductionandastrongerfocusonservices.Tosupporteconomicgrowthduringthistransitionandintothefuture,manyVictorianbusinesseswillneedtofocusinternationally—sellingthehighestqualitygoodsandservicesforwhichVictoriais renowned.

Asiawillundoubtedlycontinuetobeourmajorconsumer—the region is expected to produce half of the world’s total economicoutputby2025andChinawillbeamajordriverof this growth. Further, the historic China–Australia Free TradeAgreementandthee-commerceboom(China’se-commerce sector recorded sales of more than half a trillionAustraliandollarsin2014,a50percentincreaseonthepreviousyear)willprovideunprecedentedmarketaccess for businesses.

ButtheChinesemarketiscompetitive—Chinaisthemainexportpartnerof43countriesglobally,andofmanyothersub-nationaljurisdictions,andiscontinuingtodeveloptrade agreements with more partners. And despite our strongrelationship,culturalandlinguisticdifferencescanposeachallengeformanybusinesses.ItisthereforecriticaltoequipVictorianbusinesseswiththeskillstheyneedtosuccessfullydobusinessintheregionandtoseizespecificopportunities.

What are we currently doing? TheGovernmentisalreadyhelpingVictorianbusinessestoaddressthesechallenges:

•TheGovernmenthostsalargenumberofinboundandoutbound trade missions, which are targeted to drive growthinprioritysectorsandregions,includingourlargestmulti-sectorinboundtrademission,theVictorianInvitationProgram.

• Skills and training programs for businesses are available includingtheExportSkillsandBriefingprogramandtheAccess Program.

•TheGovernmentisworkingwithfederalagenciestoaddressbehindtheborderbarriersaffectinginternationalmarket access for Victorian goods and services.

• Business matching in China and at home connect Victorianexporterswithpotentialpartners,includinge-commerceplatforms,andtheGovernmentcontributedto Austrade’s E-commerce in China: a guide for Australian businesses.

Otherinitiativescanvassedelsewhereinthisdocumentwillalso assist businesses to obtain greater market access. TheseinitiativesincludethePremierandhisMinisterscommittingtotraveltoChinaeveryyearandatleastonceinthistermofgovernmentrespectively,andstrengtheningoursub-nationalrelationshipsinJiangsuandSichuan.Additionally,buildingthelinguisticandculturalcompetenceofVictorianyouthandprofessionalswillensureapipelineof Asia capable workers for our businesses in the future.

Direction five: Supporting successful business engagement with China

9%AUSTRALIAN BUSINESSES OPERATING IN ASIA

Percentage of Australian businessescurrentlyoperatinginAsia,despitetheenormityofopportunitiesintheregion

65%NO INTENTION OF CHANGING STANCE ON OPERATING IN ASIA

Percentage of Australian businesses that have no intentionofchangingtheirstanceonoperatinginAsiainthenext2–3years

31

Enhancing Government support Understanding the e-commerce boom in China

TheVictorianGovernmentiscommittedtoprovidingbusinesseswithup-to-dateinformationonnavigatingtheChinesee-commerceenvironment,connectingVictorianexporterstoe-commerceplatformsandworkingwiththoseplatformstopromoteVictoriangoodsandservicesonline.TheGovernmentwillalsoseektoleverageitslogisticalstrengthstoattractthephysicalinfrastructureofe-commerceplatformstoVictoria.

Connecting regional Victoria

ProvidingadditionalsupporttoconnectregionalVictoriatoChinaisalsoimportant.TheVictorianGovernmentwillbuildontheVictoria–JiangsuRegionalCityAlliance,establishedbythetwogovernmentsin2014.Bothjurisdictionshavecommittedtoitsimplementation,whichwillseemutuallybeneficialeconomicdevelopmentinareasofgrowthandcompetitiveadvantage;regular,ongoingeconomicandtradedialoguebetweencities;andaplatformforincreasedexchangesandactivities.TherewillalsobeastrongRegionalCityAlliancecomponenttotrademissions, ensuring our regions are well-represented.

Victoria will:• support small and medium sized business to developtheknow-howtoidentifyandtakeupexportopportunitiesinChina,includingthoseofferedbyChAFTAandnewtrendssuchase-commerce

•continuallyimprovetheoutcomesofcorebusinessactivitiesincludingtheconductofhighlytargetedin and outbound missions (including the large multi-sectorVictorianInvitationProgram)andworking with the Commonwealth Government to address behind the border barriers in-market

•attractChinesee-commerceplatformstoVictoriabyleveragingourlogisticalstrengthsandreputationforhighqualitygoodsandservices

•betterconnectregionalVictoriatopotentialpartnersinChinathroughtheRegionalCityAlliance with Jiangsu Province.

PromotingVictorianproductsin-market: Fruitday.come-commercemarketingpromotion

33

150k 70%

¥10tr 25%

NEW CHINESE SHOPPERS PER DAY

OF ONLINE SALES

E-COMMERCE SECTOR

ANNUAL GROWTH RATE

Anestimated150,000newChinese shoppers use e-commerceeverysingledayoftheweek.

Business to consumer transactionsaccountformore than half of all online sales and is expected to growto70%by2020.

Totalvalueofe-commercesectorisestimatedtobeRMB10trillionby2020

OnlinesalesinChinacontinuetoboomandwillgrow at an annual rate of 25 per cent

E-commerce: An exciting opportunity for Victorian businesses

VictorianbusinessescannowdirectlyreachChina’sonlinecustomersthroughavarietyofe-commerceplatforms—onlinemalls,hypermarketsandspecialtymarkets,flashsalesandstandalonee-commercewebsites.TheChineseGovernmentrecentlydevelopedpilotcross-bordere-commercezonesinsevencities—makingmoreauthenticforeigngoodsavailabletoChinese consumers at a lower cost and with faster clearanceanddispatchtimes.

EngagingathirdpartyAustralia-basedbuyingagentwho represents Chinese distributors and online marketplacescanbealowrisk,convenientandefficientwayforsmallandmediumbusinessestoreachChineseconsumers.Theagenttakesownershipoftheproduct,includingcustomsproceduresanddistribution,simplifyingwhatwashistoricallyalengthy,costlyandcomplicatedprocess.Someagentsalsooffertailoredpromotionalandmarketingassistancetodrivemore sales.

Major Chinese e-commerce marketplaces are also seekingtoestablishwarehousingandofficefacilitiesinAustralia and partner with Australian suppliers and logisticscompanies.ThistrendwillbetterconnectAustralian products with their Chinese consumers, andprovidegreatpotentialformorejobsinVictoria.

Boosting the Victorian economyJD.com and Alibaba have both launched global extensions oftheire-commerceplatforms—theseenableVictorianbusinessestoselltheirproductsdirectlytoChineseconsumers,overcominganumberofmarketentrybarriers.

JD.comrecentlypartneredwithTreasuryWineEstatestoofferthecompany’swinestoitsmorethan100millionactivecustomers.InSeptember2015,ChemistWarehouse,following its recent partnership with Alibaba, announced it willestablishanewentityinVictoriatosupportthee-commercearmofitsbusiness.ChemistWarehousehasprojectedsalesof$22millioninthefirstyearand$68millioninthesecondyear,anditanticipates50newjobs will be created in Melbourne to service this forecasted rise in sales.

Promoting Victorian products in-market TheVictorianGovernmentpartneredwithCitrusAustraliaandChinesee-commerceprovider,fruitday.com,toactivelypromoteVictorianproduceinChina.Thepartnershipwithfruitday.comcontributedtosalesofover$1millioninoranges to Chinese consumers during a one-week promotion,significantlycontributingtothesuccessoftheNow!InSeasoncampaign.ThiscampaignwasawardedanAsiaFruitAwardforbesthorticulturemarketingcampaignin2015.

E-commerce: An exciting opportunity for Victorian businesses

34

Direction six: Target trade activity according to Victoria’s competitive strengths and specific market opportunities in China

Victoria’sexportstoChinahavebeenextraordinarilysuccessfuloverthepastdecade,growingby44percentoverthepastfiveyearsalone.TheVictorianGovernmentaimstogrowourexportstoChinabybuildingonourmainindustryandtradepolicieswithasuiteofAsia-andChina-specificactions.

Cross-sector initiativesTheGovernment’snewChinaStrategyestablishesthreemaincross-sectorinitiativesthataddressspecificgapsinourtraderelationshipwithChina.Thefollowinginitiatives—describedinmoredetailunderDirections1and2—willhelpourbusinessesengagewithandgrowtheirexportstoChina:

•TheVictoria–JiangsuInnovation and Technology Agreement will fund joint projects between Victorian and Jiangsuorganisationstocommercialiseinnovations.

•TheVictoria–Sichuanliveabilityinitiativewillsupportcommercialoutcomesforbusinessesinliveabilitysectors,bypromotingthemasabrandedpackageofexportsthataddressmanyofChina’surbanisationchallenges.

•PositioningVictoriaasthecentreofAsiacapabilitiesandinsightswilldrivethecapabilityofthebusinessandeducationsectorstoengagewithandbesuccessfulinAsianmarkets,bycoordinatingandextendingexistingprograms that connect aspiring exporters to experts.

Priority export markets in ChinaCentraltotheGovernment’sindustryandtradepoliciesarethesixsectorsidentifiedinourBack to WorkstrategythatwilldefinethefutureofourstateandbemajorexporterstoChina.Thesesectorshavethepotentialforextraordinarygrowthandthecapacitytocreatehighskill,highwagejobs:

•foodandfibre

•internationaleducation

•medicaltechnologyandpharmaceuticals

• professional services

•transport,defenceandconstructiontechnology

•newenergytechnology.

TherearetwoothermajorVictoriansectorswhoseexportstoChinahaveextraordinarypotential:

•visitoreconomy

•creativeindustries.

TheVictorianGovernmentisdevelopingnewpolicydirectionsfortheseeightsectors,todrivetheirdevelopment, growth and exports.

TheVictorianGovernmentwillsupportbusinessestogrow their exports to China through its broader industrysectorapproachesby:

• developing strategies for the six Back to Work sectors that best support the growth of each sector,tobesupportedbythe$200millionFutureIndustries Fund

• refreshing Victoria’s approach to the visitor economybyforminganewentity,VisitVictoria,whichcombinestheTourismVictoriaandtheVictorianMajorEventsCompany

•developingacreativeindustriesstrategytostrengthenourcreativeandculturalindustries

•applyingamoretargetedapproachtotrademissions—bothtoandfromChina—thatreflectsVictoria’scompetitivestrengthsandnewopportunitiesarisingfromtheChina–AustraliaFreeTradeAgreement,suchasprofessionalservicesandthecreativeindustries.

Case StudySports Diplomacy

Victorians’ passion for sport is evident in our extensive calendarofworld-classmajorevents—includingtheAustralianOpen,VictorianSpringRacingCarnivalandtheMelbourneFormulaOneGrandPrix—thatdistinguishVictoriaasthenation’s‘sportingcapital’.

ChineseparticipationinVictoria’ssportingevents,suchasLiNa’swinattheAustralianOpenin2014,attractssignificantnumbersofvisitorswhosetimehereboostsourvisitoreconomyandbuildsourculturalknowledge.

Programs such as Melbourne United’s basketball program—whichistouringateamtoChinaeachyear,andisseekingtorecruitChineseplayers—buildstrustthrough long term partnerships, and fosters cultural understandinginthebroadercommunity.

35

Food and fibre

Agricultureaccountsfor48percentofVictoria’s total goods exports and China is Victoria’s biggest export market for foodandfibreproducts—equaltoourtopfivemarketscombined.Victoria’sreputationforsafeandcleanproduceisexceptional,anddemandforourpremiumfoodandbeveragescontinuesto grow.

TheVictorianGovernmenthelpsbusinessescapturenewopportunitiesin China, tailor their products for Asian consumers and navigate behind the borderbarriers,includingquarantine.SupportwillcontinueforbusinessestobetterunderstandAsianconsumertastes and preferences, including through the Centre for AgriBioscience.

TheGovernment’sFoodSourceVictoriaprovides grants to support food producers and businesses to work together to grow exports and create newjobs.HostingChinesetradedelegationsandmakingthesectorexportreadywillencourageChineseinvestment to drive business growth andeasecapacityconstraints.

International education

EducatinginternationalstudentsinVictoria is the State’s largest services export, one third of whom come from China.Additionally,VictorianeducationinstitutionsareamongstthemostdominantAustralianeducationprovidersoperatinginChina.Forexample,VictorianTAFEinstitutionsaccount for 78 per cent of Australian TAFEdeliveryinChina.Chinesestudentsandbusinessesareattractedbythequalityofoureducationsystemand the premium student experience weoffer,whichwewillcontinueto enhance.

SupportingVictorianprovidersbuildnewresearchcollaborationsinChinawillalsoconsolidateVictoria’spositionasapremiumeducationproviderandbuildexpertiseinsubjectsofmutualinterest. As part of this Victoria hopes towelcometotheStatesignificantlymore of China’s best and brightest postgraduate students.

TheVictorianGovernmentwillalsosupportVictorianeducationprovidersto deliver courses in China, including the VictorianCertificateofEducationonanorthernhemispheretimetableandvocationalcoursesacrossanumberofindustries.TheGovernmentwillalsosupportresearchcollaborationsatthegovernmentandinstitutionallevels,tosupportgrowthacrossmultiplesectors.

Medical technology, pharmaceuticals and healthcare

China is undergoing a massive reform of itshealthcaresysteminresponsetodemand pressures from its ageing and urbanisingpopulation.Victoria’sworld-classmedical,pharmaceuticalandbiotechnologysectorisoptimallypositionedtoassistChinawiththisreformbyprovidingwholeofsupplychainsolutions.

TheVictorianGovernmentisdevelopinggovernment-to-government relationshipstoincreasecooperationandcreateopportunitiesforVictorianbusinesses.TheGovernmentalsocollaborateswiththeChinaNationalHealthDevelopmentandResearchCentreonpolicydevelopment,includinghospital funding models, workforce developmentandcaringfortheelderly.

TheGovernmentisalsosupportingjointR&Dprojectsinmedicaltechnologyandpharmaceuticals.TheseprojectscanattractChinesecapitalandhelpconnectVictorian producers to Chinese distributionchannels.

$2.8bnFOOD AND FIBRE EXPORTS

VictorianfoodandfibreexportstoChinain2014-15—thelargestmarketforVictorianfoodandfibreproducts

58kSTUDENTS

ThenumberofChinesestudentenrolments in Victoria in 2015

ThenumberofChinesehospitalsinvolvedinthenationalreformprocess,reflectingthescaleofopportunityforVictorianengagement

25kCHINESE HOSPITALS

36

TheestimatedamountofinvestmentthatAustralia’srenewableenergysectorwillattractby2020

Visitor economy

Victoriaoffersdiverseanddistinctvisitor experiences throughout the state and a world-class calendar of major events.

Four Chinese airlines have direct services to Victoria, driving growth in Chinesevisitation(up203percent),expenditure (up 205 per cent) and direct air freight (up 220 per cent) over thepastfiveyears.Airlineattractionwill be an ongoing focus of the Victorian Government.

The‘OpenUpToMore—Melbourne’brand campaign will be expanded to moreChinesecitiestoattractmorebusinesstouristsandthosevisitingfamilyandfriends.TheGovernmentwillcontinuetohostChineseinvestorgroups,toattractinvestmentintourism infrastructure.

WewillalsoworkwiththeCommonwealth Government to optimisevisasettingsandmaximisethe future growth of the visitor economy.

Transport, defence and construction technologies

Victorian businesses account for almost half of Australian R&D in advanced manufacturing. Victoria can capitalise on its strength in advanced industries, such as defence, engineering and specialist design, and inadvancedmaterialsbysupplyingtheincreasing demand for the products of theseindustriesinAsia.ThesestrengthscanbemarketedasdirectlysupportingChina’sambitionstodevelopitshightechandinnovativeindustries as the backbone of its economy.

New energy

Victoria and China have a shared interestdevelopingnewenergytechnology,increasingrenewableenergygenerationandimprovingenergyefficiency.TheVictorianGovernment’s Renewable Energy Roadmap commits Victoria to increasingitsrenewableenergygenerationfromitscurrentlevelof12percentofallelectricitygenerationto20percentby2020.Thiswillencourage Chinese investment in our newenergygenerationprojectsandcollaborationwithournewenergyR&D sector, as well as help develop the exportofVictoriannewenergytechnologytoChina.

$14.7bn50%

ESTIMATED INVESTMENT OPPORTUNITY

Victoria’s share of Australian R&D in advanced manufacturing

$20bnTOURISM CONTRIBUTES TO ECONOMY

ThecontributionofthetourismindustrytoVictoria’seconomy,the state’s second largest export, generating206,000jobs

37

Outcomes:Victoria’s exports to China anticipated to increase by over $5 billion over the next 10 years.

Overnight expenditure by Chinese visitors to Victoria to increase from $2.2 billion in 2015 to over $3.4 billion by 2026.

Chinese post-graduate student enrolments in Victoria to grow by 25 per cent over the next 10 years.

Professional services

Professionalservices—includingfinancial,insurance,scientificandtechnical—accountfor18percentofVictoria’seconomyandareoneofourtopexportearners.AndimplementingtheChina-AustraliaFreeTradeAgreement will deliver new or improved market access for the professional services sector. Victoria is well placed to capture a large share of China’s growing demand for services asitseconomygrowsanddiversifies,andasitspopulationbecomesricher,older and more urban.

Creative industries

China’s growing middle class brings with it rising disposable incomes, which is driving demand for cultural experiences at home and abroad. Victoria’sreputationasAustralia’sculturalcapitalpositionsusperfectlyto meet this demand.

TheVictorianGovernmentrecentlycarriedoutacreativeindustriesfocused trade mission to China to raise ourprofileacrossarangeofdisciplines.Overtime,thevisitwilladdsignificantlytotheVictoria-Chinaculturalandcreativerelationship.Wewill also work with the Commonwealth Government to develop commercial opportunitiesbypromotingVictoria’sexpertiseincreatingandmanagingcultural precincts.

Victoriansemployedinthecreativeandculturaleconomy,representingapproximately8percentoftotalemployment

220kEMPLOYED IN CREATIVE AND CULTURAL ECONOMY

$13.5bnVICTORIA EXPORTED IN SERVICES

TheamountofVictorianservicesexportedin2013-14,representing36per cent of Victoria’s total exports, morethantheequivalentfigureforAustraliaasawhole(17%)

$6.5 billion 2014

$11.5 billion 2026

$2.2 billion 2015

$3.4 billion 2026

14,500 students 2015

18,125 students 2026

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TheVictorianGovernmentrecognisesthatthemostsuccessfulinternationalpartnershipstranscendthetransactional-theycomprisetrustedpartieswhotrulyunderstandeachother’speople,cultures,attributesandchallenges,andworktogethertoachievemutualprosperity.

Withthisinmind,wewillcollaboratewithourChinesepartnerstoimplementthisStrategy,justasweworkedtogethertodevelopit.ThisiscriticaltorealisingourvisionofbecomingthegatewaybetweenAustraliaandChina.

TheVictorianGovernmentwilltakeawhole-of-governmentapproachtoimplementingtheStrategy,andachievingitsoutcomes:

•ThePremierwillleadtheGovernment’soverallengagement with China through his annual visits and annualStatementsonInternationalEngagement

•MinisterswillpursuetheStrategy’sdirectionsduringtheirtraveltoChina,includingbyaddressingthedirectionsintheirpost-travelreports,andbyencouragingreciprocaldelegationsfromChina

•Ministerswillalsoengagewithcommunities,businessesandinstitutionsontheStrategy

•TheGovernmentwillpartnerwithitsChinesecounterpartstofacilitatemorecollaborationthroughtheimplementationofinitiativesinareasofmutualbenefit.

WorkingtowardsadeeperpartnershipwithChinaandstrivingtoachievemutualbenefitswillhelptoaddressChinaandVictoria’scurrentandfuturechallenges.ThiswillputVictoriainastrongpositiontosecureitseconomicprosperityintothefuture.

Implementation and next steps

Premier Daniel Andrews vistingtheNanjingCityWall

39

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