Report on the Parliamentary Trade Mission to Shanghai Honourable
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Report on the Parliamentary Trade Mission to Shanghai Honourable Curtis Pitt MP Speaker of the Legislative Assembly 21 -27 September 2019 1 TABLE OF CONTENTS EXECUTIVE SUMMARY ................................................................................... 3 OBJECTIVES OF THE QUEENSLAND PARLIAMENTARY TRADE DELEGATION ..... 4 QUEENSLAND – CHINA RELATIONSHIP ........................................................... 5 MISSION DELEGATION MEMBERS .................................................................. 9 PROGRAM ................................................................................................... 10 RECPEPTION: QUEENSLAND YOUTH ORCHESTRA ENSEMBLE PERFORMANCE AND DINNER WITH QUEENSLAND DELEGATES ............................................. 21 MEETING: BUNDABERG BREWED DRINKS .................................................... 23 MEETING: AUSTCHAM SHANGHAI ............................................................... 25 MEETING: SHANGHAI PEOPLE’S CONGRESS ................................................. 27 SITE VISIT: SENSETIME ................................................................................. 29 RECEPTION: QUEENSLAND GOVERNMENT RECEPTION ................................ 32 MEETING: ALIBABA GROUP .......................................................................... 34 TIQ BUSINESS DINNER ................................................................................. 40 MEETING: JINSHAN DISTRICT PEOPLE’S CONGRESS ...................................... 41 SITE VISIT: FENGJING ANCIENT TOWN, JINSHAN .......................................... 43 SITE VISIT: YANGTZE DELTA REGION ROADSHOW CENTRE, JINSHAN ............ 45 SITE VISIT: ZHUJING YIHE NURSING HOMES AGED CARE CENTRE ................. 47 SITE VISIT: SHANGHAI HUAWEI WATER SAVING IRRIGATION CORP ............. 49 2 EXECUTIVE SUMMARY The visit comprised a program of meetings and visits to cultural, commercial, governmental and socio- economic entities to provide an introduction to the city of Shanghai. Meetings were also arranged with Australian company leaders and organisations which provided an understanding of both the opportunities and challenges for Australian companies in entering/doing business in the China/Shanghai The delegation also met with two of China’s most prestigious and cutting edge technology companies: Alibaba (e-commerce) and SenseTime (artificial intelligence). The Delegation expressed appreciation for the visit which had provided them with insights into the Shanghai and overall China market, how citizens live and the opportunities presented by the Chinese economy. The visit gave delegates a preliminary understanding enabling them to support their constituents who are interested in working in the PRC market. Support for the Parliamentary Trade Mission was provided by: Protocol Queensland (Department of the Premier and Cabinet) Trade and Investment Queensland Austrade I table the report for the information of members. Honourable Curtis Pitt MP Speaker of the Legislative Assembly 3 OBJECTIVES OF THE QUEENSLAND PARLIAMENTARY TRADE DELEGATION The objectives of the Delegation were: To visit Shanghai in conjunction with celebrations of the 30th Anniversary of the Queensland – Shanghai Sister State relationship. To understand more about Shanghai – an important partner for Queensland’s trade, investment, education and training and cultural development and expansion. Meet with delegation counterparts from Shanghai’s People’s Congress to learn about the role of Congress and areas of mutual interest and focus. Connect with major Chinese corporations to learn more about China’s innovation capabilities and companies behind China’s journey from industry laggard to industry disruptor: Alibaba, a leading e- commerce and FinTech company and SenseTime, a leading Artificial Intelligence (AI) company. 4 QUEENSLAND – CHINA RELATIONSHIP Trade and Investment Relationship China is Queensland’s largest two-way trade partner and export market, and a major investor in the State across a range of industries. China is also Queensland’s largest source of international students. In 2018-19, Queensland’s total goods exports to China were valued at $28.7B, representing 32.9% of Queensland's total goods exports and 21.4% of Australia's total goods exports to China. Major export items included coal ($9.8B), metalliferous ores and metal scrap ($2.2B), non-ferrous metals ($1.4B) and meat ($925M). Between 2017-18 and 2018-19, Queensland's total merchandise exports trade with China increased by 26.9% or $6.1B. In 2018-19, Queensland’s goods imports from China were valued at $10.7B million, representing 13.7% of Australia's goods imports from China. Major import items included electrical equipment ($1.1B), petroleum ($1.0B), other manufactured articles ($871M), metal manufactures ($772M) and clothing and apparel ($760M). Queensland's total goods imports from China increased by 8.7% or $865.7M. After the United States, Australia is the second largest destination for Chinese overseas direct investment. Chinese companies have invested $20B in Queensland over the past decade in the coal and gas, commercial real estate, transport, agribusiness and manufacturing sectors. The China-Australia Free Trade Agreement (ChAFTA) entered into force on 20 December 2015. It will ensure the competitiveness of Australia's agricultural and manufacturing industries, protect and ensure the competitiveness of our services providers and attract greater investment in Australia. More than 86% of the value of Australia’s goods exports to China enters duty free following ChAFTA’s entry into force, rising to 96% upon full implementation. Australian service providers benefit from new access to China’s significant and growing services sector. 5 Education and Training China is Queensland’s largest source market for international student enrolments. In 2018, Queensland’s enrolments from China grew 16.5% to 31,014 and accounted for 22.9% of the State’s total enrolments. In 2018, 57.1% of Chinese enrolments in Queensland were within the higher education sector. Tourism China is Queensland’s most valuable international visitor market. In the year to March 2019, 489,000 Chinese visited Queensland and spent over $1.6B in the state. The Queensland Asia Tourism Strategy 2016–2025 identifies China as a key priority market, with accelerated growth expected to 2025. In June 2016, Queensland Government announced the $33.5M (over four years) Advance Queensland: Connecting with Asia Strategy (CWA strategy). Food and Agribusiness In 2018-19, Queensland agricultural commodity exports to China were valued at $1.5B, representing the state’s second largest food export market. In 2018-19, Queensland exports included: beef exports to China worth $889M, representing Queensland’s third largest beef export market and an annual increase of 76%. About three- quarters of the exports were boxed-frozen boneless manufacturing-style beef. fruit and vegetable exports to China were valued at $108M, representing the State’s second largest fruit and vegetables export market. In May 2017, China imposed additional levies on sugar imports from key producers including Australia. These, and the fact that tariff reductions for sugar were omitted under ChAFTA, have been a disappointment for the Australian sugar industry. During 2018-19, DAF hosted and supported six Chinese Government delegations and business and research organisations interested in Queensland agriculture. In November 2018, TIQ led nine Queensland processed food companies to attend the Food and Hotel China (FHC) trade show in Shanghai. 6 Mining and Energy In 2018-19, China was Queensland’s largest export market for coal ($9.8B), metalliferous ores and metal scrap ($2.2B) and non-ferrous metals ($1.4B). Chinese companies with interests in Queensland’s liquified natural gas (LNG) industry include China National Offshore Oil Corporation, Sinopec Group, and PetroChina Company Ltd. Chinese investment in the Queensland gas industry topped $7.3B, with involvement in both the Queensland Curtis LNG and Australia Pacific LNG projects. Both plants are now operational and exporting LNG. Transport China’s largest rideshare provider, DiDi, has recently launched in Brisbane. Science Queensland has strategic science and technology agreements with the Chinese Ministry of Science and Technology (MOST), Chinese Academy of Sciences (CAS), and Science and Technology Commission of Shanghai Municipality. The Memorandum of Understanding (MOU) with MOST was first signed in 2008. Queensland was the first state in Australia to sign the agreement with MOST. The Premier signed a Subsidiary-MOU in April 2016 during a trade mission to China announcing the establishment of the Queensland–MOST Commercialisation Partnership Program (CPP) under the Advance Queensland Global Partnership Awards. The CPP facilitates Queensland-based science related start-ups as well as entrepreneurially minded researchers to further develop their product or technology through placements within leading MOST- supported Chinese science and technology incubators. Government to Government Relationship In 1989, Queensland signed a Sister-State Agreement with Shanghai Municipal Government to promote trade and investment, and encourage closer ties in education, science and technology, arts, culture, sports, and government. The 2017-19 agreement was signed by the Deputy Premier in Shanghai in November 2016. 7 A Public Servant Exchange Program is a reciprocal arrangement under the Sister-State agreement.