China trade mission vital to Victoria's future
by Professor Edward Byrne AO
"If you were successful, somebody along the line gave you some help...Somebody invested in roads and bridges. If you’ve got a business -- you didn’t build that. Somebody else made that happen"
So said President Obama recently on the campaign trail. He may have lived to regret his choice of words, which was gleefully seized upon by his political foes, but his point is a strong one: governments can, should and do help businesses grow. And, in this country at least, they frequently do so in a manner that is much more engaged and nuanced than simply building infrastructure, vital though that is.
This week I, along with other representatives of Monash University, am amongst 654 Victorians taking part in a Super Trade Mission to China led by the Premier. Those 654 people represent 414 Victorian organisations. It is the largest-ever delegation from any country into China.
It is not merely farsighted but absolutely essential to Victoria's future that delegations like this take place, and that they be government-led.
Australia is a small market. For Victorian businesses to grow past a certain point, they must look overseas. And overseas markets don’t come much bigger than China. It surpassed Japan in 2010 to become the world’s second largest economy by GDP, and The Economist predicts that it will surpass the US by 2019. This much every Australian knows - our current boom is built upon it. But few other sectors have been able to replicate the success of the mining industry. The recent softening in the iron ore price – down to below $90 a tonne last Friday from $127 in July – illustrates just how vital it is that we diversify our trade links.
Trade missions like this one are a powerful tool to build those links. Put yourself in the position of, say, the owner of a small Victorian tourism operator wanting to drum up business from China. China is currently Victoria’s largest tourism market, providing over 265,000 visitors a year, worth over $800 million to Australia’s economy. But with a population of over 1.3 billion and a rapidly expanding middle class, we’ve barely scratched the surface.
If you were such a tourism operator, you’d need to analyse the market, find the right people to talk to, get access to them, and work out how to frame your offering to someone from a different culture, who speaks a different language and operates in a different regulatory environment. Those may be things you have neither the time nor the expertise to do.
This is where government can help: it has a history of engagement with China. With the expertise it has built up, it can support Victorian business people to get the lay of the land and scope out potential partners. Perhaps most importantly, an association with the government provides context for a potential partner. It’s the difference between introduced by a mutual friend and making a cold call.
Not every connection made on this trip will eventuate in a successful business relationship. It doesn’t have to. A single good connection can spark a ripple effect that brings even more opportunity. Monash's new joint graduate school is a case in point.
Earlier this year, we opened the Southeast University-Monash University Joint Graduate School and Research Centre (Suzhou) in collaboration with one of China’s leading universities, Southeast University. By 2017 we will build up to over 1400 post-graduate students in research-intensive fields like green chemistry, nanotechnology and stem cells.
Because we are operating as a fully-fledged part of the Chinese system, we are in a rare position of being able to apply for research funding from the Chinese government. And as "Made in China" increasingly becomes supplanted by "Innovated in China", there is a significant pool for which to apply.
The school is located in the Suzhou Industrial Precinct, where over 100 Fortune 500 companies conduct R&D. That gives us the opportunity to collaborate on projects with those companies - indeed, such collaboration is built into our degree structures, many of which incorporate internships with companies within the SIP. The traffic will flow both ways, with Monash providing a conduit for our existing Australian partners to do business with Chinese companies.
The personal links created are just as important as the institutional ones. Getting Chinese and Australian students and faculty working together is a powerful way to build understanding between our two nations. As those individuals move on through their careers they will take with them the ability to navigate each other’s cultures, and an address book full of contacts in each other’s counties.
All of this value has been created by the relationship between a single Victorian organisation and a single Chinese organisation. There are 413 other Victorian organisations represented on the mission. Who knows what the downstream effects might be? After all, as James Cook might have attested, without a government-backed expedition we wouldn’t be here today.
Professor Ed Byrne AO is the Vice-Chancellor and President of Monash University.