COUNCIL REPORT Agenda Item 6.2 22 November 2005 LORD MAYOR’S MISSION TO CHINA – SEPTEMBER 2005 Report by Lord Mayor, John So Purpose 1. To report to the Council on the travel undertaken by the Lord Mayor to China (Beijing, Tianjin, Guangzhou and the cities within the Pearl River Delta) and Hong Kong for the period 13 to 23 September 2005. Recommendation 2. That Council receive and endorse the report on the Lord Mayor’s Mission to China and the Attachments which include a detailed summary of benefits and outcomes, associated speeches, media releases and press clippings. Key Issues Outcomes / Benefits 3. The Lord Mayor’s Mission to China was underpinned by the largest business, trade and cultural mission ever undertaken by the City of Melbourne. The mission in volved more than 100 participants and included accompanying delegations from the State Government of Victoria, the Committee for Melbourne and representatives from some of Victoria ’s leading biotechnology firms. 4. The Mission to China has resulted in significant dividends for Melbourne and has consolidated business, trade and cultural opportunities for the City. It has also strengthened Melbourne’s global positioning as a leader in sustainability, social responsibility and a leading business, cultural and visitor destination throughout the region. 5. The Mission to China secured significant benefits for Melbourne and these are detailed in Attachment 1 and Attachment 2. Notable achievements include the following: 5.1. Melbourne bio-tech businesses will share a $170 million clinical trial program for the commercialisation of traditional Chinese medicine as a result of this Mission. This multi- million dollar deal was signed between Tianjin Pharmaceutical Holdings Ltd, the China Development Bank Tianjin Branch and the Melbourne-based International Program Funds of Australia to develop Chinese medicine in Australia and other Western markets; 5.2. a $3 million deal between RMIT and the Guangzhou New South Company Ltd to establish a Victorian Evidence Based Herbal Medicines Centre to develop herbal therapeutic products for sale in Australia and other Western markets; 5.3. signed agreement with the Tianjin Municipal Government to establish a Tianjin business and investment office in Melbourne. The Tianjin Municipal Government is sending a scoping mission to investigate a number of locations in the City in December 2005; 5.4. secured agreement from the Beijing Chamber of Commerce and Industry to send a business delegation to Melbourne in 2006 and from the Beijing Olympic Media Corporation to send a delegation to the Commonwealth Games in 2006; 5.5. in a first for an Australian municipality, the City of Melbourne office in Tianjin has been given Trade Correspondent Status by the Australian Trade Commission (AusTrade) to act as a trade facilitation office; 5.6. continued negotiations for Tianjin to become China’s first municipality to join the Cities for Climate Protection Program. This is a joint project between ICLEI, City of Melbourne, Tianjin Environmental Protection Bureau and other agencies to develop effective local strategies to address environmental issues in Tianjin ; 5.7. City of Melbourne has developed a new economic relationship with Foshan and strengthened its relationship with Guangzhou. Consequently, Guangzhou is sending two business delegations to Melbourne later this year; 5.8. the Mission to China has built relationships and created opportunities for companies in Melbourne with more than 100 businesses in China. In Hong Kong, the Lord Mayor delivered a Key Note Address to over 60 Hong Kong business leaders at the Hong Kong Trade Development Business Luncheon which profiled the Lord Mayor’s Global Vision for Melbourne; 5.9. the Mission to China has provided significant awareness and publicity for Melbourne as a globally significant destination for business, trade, investment and tourism as well as a leader in sustainability. Extensive interviews and media received by the Lord Mayor were beamed to a potential combined audie nce of over 600 million people; and 5.10. Tianjin Mayor Dai Xianglong officially invited Melbourne Football Club to China in 2006 to hold an AFL exhibition game. Details of Travel 6. As a consequence of the success of previous missions and in recognition of Melbourne’s long term relationships with Tianjin and other key cities in China, six (6) associated delegations travelled with the City of Melbourne to China. These were: 6.1. City of Melbourne Biotech partnering mission (Beijing, Tianjin and Guangzhou); 6.2. Victorian Government Environmental Mission; 6.3. Victorian Government Industry Capability Mission – urban systems/sustainable development; 6.4. Australasian Access Business Partnering Program (Beijing); 6.5. Committee for Melbourne Business Study Tour (Beijing, Tianjin); and 6.6. Melbourne Citizens Mission (Beijing, Tianjin and Shanghai). 7. The Lord Mayor was accompanied on this Mission by the Chief of Staff. 8. The feedback received from members of the accompanying delegations has been extremely positive. Some examples include: 8.1. Mr John McGregor, Special Trade Envoy – North Asia, Government of Victoria wrote in a recent le tter: “I believe that DIIRD and the City of Melbourne have much in common with respect to growing exports and particularly in a market as large as China. It is hoped that we can continue to cooperate on initiatives of mutual interest and benefit, particula rly in cities like Tianjin and Nanjing where we have strong long-term relationships with local authorities.” 2 8.2. Mr John Raff, CEO of Starpharma wrote: “From Starpharma’s perspective, the Business Exchange delegations was very informative and a highly successf ul introduction to a range of opportunities in China. The presence and support of the Lord Mayor of Melbourne, Councillor John So, who has very strong and high level contacts in China, meant that we were able to interact with a much more senior level in the Chinese Government and Industry.” 8.3. Associate Professor Charlie Xue, Head of Division of Chinese Medicine at RMIT wrote: “It is great to see the support from governments of both cities for collaborative research in Chinese medicine.” 8.4. Mr Robert Sirgiovanni, Director of Hooker Cockram Pty Ltd wrote: “The exposure we received from the City of Melbourne visit and in particular the Lord Mayor is key to raising our profile in China. The contacts we made with Local Government representatives in TEDA for example are key to HC obtaining a General Contractor License and growing our business. It is critical to have a senior representative Government Representatives and VIP’s such as the Lord Major to emphasise our interest and gain access to the right level. We hope this continues to be supported by Victoria and Melbourne.” 8.5. In a recent letter to the Lord Mayor, Ms Christine Wallis and Mr Stephen Axford of Urban Futures Consulting wrote: “Our visit was an insight into the opportunities and challenges in Tianjin and how vitally important it is for Victoria to be closely aligned economically, socially and culturally. It was also clear how valued the City of Melbourne is in leading and facilitating alignments.” Councillor Travel Guidelines 9. The post-travel report accords with the relevant section of the Councillor Travel Guidelines. Cost 10. For the Lord Mayor, the cost of the travel, including Business Class airfares, accommodation, fees and other expenses, such as day-to-day incidental costs is $10,169.25. 11. For the Chief of Staff, the costs of travel, including Business Class airfares, accommodation, fees and other expenses, such as day to day incidental costs is $10,763.35. 12. The costs of this travel will be met entirely from the existing 2005/06 budget allocation. Background 13. On 23 August 2005, Council approved the proposal for the Lord Mayor, Councillors and an extensive business mission to travel to China (Tianjin, Guangzhou and the cities within the Pearl River Delta) and Hong Kong for the period 14 to 23 September to consolidate business, trade and cultural opportunities for the City of Melbourne and to consolidate Melbourne’s global positioning as a leader in sustainability, social responsibility and a leading business, cultural and visitor destination throughout the region. 3 14. Following the Council’s approval of the Lord Mayor’s travel plans, the Lord Mayor was invited to attend the China Access Conference in Beijing and make a key note address to the Melbourne- Beijing Biotech Business Exchange Seminar. A number of additional high level meetings were arranged, including with senior representatives of the Beijing Organising Committee for the Olympic Games 2008, the Vice Mayor of the Beijing Municipal People’s Government and the Australian Ambassador to China. 15. China has accounted for a quarter of world growth and a similar share of global trade. In the next decade, China will overtake Germany to become the world’s third largest economy after the US and Japan. 16. The City of Melbourne’s global orientation commenced approximately 25 years ago. The City was the first Australian municipality to adopt a policy of seeking tangible outcomes from its international program and was the first Australian city to establish a sister city relationship with a city in China. 17. Melbourne established a Business Development Office in Tianjin in 1997 and remains the only Australian city with a representative office in China. Melbourne is positioned nationally as the only Australian member of the Business Partner City Network, which comprises all major Asian business cities including Tianjin. 18. These relationships have paid significant dividends for Melbourne businesses, educational and cultural institutions. Previous business missions have built on these long term relationships and resulted in planning, urban design, retail and educational contracts worth millions of dollars for Melbourne and Victorian companies. 19. Attachment 1 provides a summary of the benefits and outcomes of the Lord Mayor’s Mission to China.