The Hon. Philip Dalidakis MP - travel report - Indonesia, China, Republic of Korea, November 2015

*The above costs are not final and complete

Purpose of travel

The purpose of my travel to Indonesia, China and the Republic of Korea was to facilitate trade and investment opportunities in these three key markets.

In Indonesia I met with His Excellency Sri Sultan Hamengku Buwono the 10th, Sultan and Governor of the Special Region of Yogyakarta, to strengthen the relationship between Yogyakarta and Indonesia, an important long term economic partner.

In China, I attended the Austrade led 1st Australia-China International Health and Aged Care Summit where there were 35 Victorian companies participating. I delivered a keynote speech to the 'Aged Care Investment Roundtable' stream of the summit and at the networking dinner.

Victoria is a leader in health and aged care and the summit assisted Victorian product/service providers to understand market demands and future trends in China, share insights and experience, and facilitate bilateral engagements to support potential collaborations and commercial opportunities.

The recently signed China Australia Free Trade Agreement (ChAFTA) will further strengthen opportunities across multiple industries, particularly in service sectors and food and fibre exports. It also encourages the foreign investment needed to create jobs and build prosperity in Victoria.

The key purpose of my travel to the Republic of Korea was to meet with executives of Korean companies with whom there are strong trade and investment opportunities for Victorian agriculture and manufacturing businesses.

Benefits of travel to the State of Victoria

• Strengthened relationships with key Victorian exporters to these regions.
• Investigated opportunities for top Chinese companies to invest in Victoria.
• Promotion of Victoria's expertise in the field of health and aged care.

Meeting in Indonesia

Meeting with His Excellency Sri Sultan Hamengku Buwono the 10th, Sultan and Governor of the Special Region of Yogyakarta
I met with His Excellency Sri Sultan Hamengku Buwono the 10th, Sultan and Governor of the Special Region of Yogyakarta, following his visit to Victoria in September 2015. During his time in Victoria, he and the Premier jointly witnessed the signing of a Letter of Intent (LoI) that commits Yogyakarta and Victoria to developing a Memorandum of Understanding (MoU) on the arts and education, which are areas of shared strength. The LoI was an important symbolic first step towards the MoU, which will further strengthen Victoria's relationship to Yogyakarta, and Indonesia more broadly.

China

1st Australia-China International Health and Aged Care Summit
As a result of hosting the investment Roundtable at the Health and Aged Care Summit many of the Victorian delegates have been contacted by potential investors and partners are following up leads.

I also met with an international health and aged care company during the conference to discuss their activities both in China and Victoria. I offered to meet with them again to discuss their Agribusiness proposals.

Announcements in Beijing

1. Aged Care
I witnessed a Melbourne based aged care services company form a joint venture with a Chinese company on the operation of a major new seniors' living project in Harbin. The two companies signed a memorandum of understanding on the operation of 9,000 seniors living units, 1,000 aged care beds and a training institute for carers and specialist staff. This is a great example of how Victorian companies with specialised expertise in health and aged care can team up with Chinese partners on exciting collaborations that help meet the needs of both the Australian and Chinese populations.

2. Information & Communication Technology (ICT)
A Victorian ICT company and a Chinese health company announced a new agreement to integrate the Victorian company's health and analytics software into up to 70 portable medical clinics to be rolled out in disaster prone areas of China and across the globe. The Victorian company will provide the software, systems integration and know-how, while the Chinese company will manufacture the portable medical clinics.

3. Healthcare
A healthcare company signed a memorandum of understanding with the Victorian Government to explore the development of a healthcare technology innovation centre in Melbourne. The concept has been developed to showcase global Health and Internet of Things and to help startups / enterprises with their go-to-market strategies.

4. Swisse Wellness
On behalf of the Victorian Government, I acknowledged the recent deal that has seen a Hong Kong listed company take an 83% share in Victorian vitamin and health products manufacturer, Swisse Wellness Group (Swisse). Swisse has been expanding its business rapidly and has had an increasing presence in China.

The investment will give Swisse access to a China-wide distribution network, e-commerce capability and a well-established customer loyalty program. This means that the Swisse products will be available to a larger population base, driving sales growth that should result in more jobs in manufacturing, research and development and innovation in Victoria.

5. Royal District Nursing Service
I also acknowledged the recent merger of Victorian health and aged care provider the Royal District Nursing Service (RDNS) with Queensland's RSL Care. RDNS is already very active in China and South East Asia, and the Victorian Government has offered assistance from the outset providing introductions to key players.

RDNS and RSL together, will become one of the biggest providers of home-based nursing and healthcare in the Asia Pacific and are well positioned for further growth. An example of the work RDNS is doing in China is their collaboration with a College in Nanjing, with the support of the Australian and Victorian governments.In Nanjing, RDNS consultants are applying international best practice to a significant new aged care development featuring 1200 retirement village units, 400 nursing home beds and a 400 bed rehabilitation hospital that is co-located with a vocational college and day therapy centre

The site in Nanjing is now being used by the United Nations Economic and Social Commission for Asia and the Pacific and by the International Institute on Ageing as their training base in China.

Meetings in China

• I met with a large investment company to congratulate it on the company's $135 million investment in Melbourne's Park Hyatt Hotel, its first international investment project. I was pleased to learn that the company is interested in the health and aged care sector in Victoria and keen to learn more about Victoria's capabilities in this area.

• I was briefed on one of the largest media groups in China, which has the ability to produce 5-6 movies, and 15 TV series per year. It is licensed to distribute foreign movies in China. I encouraged continued discussion with the VGBO with regard to possible investments the company might consider in Victoria.

• A meeting with Austcham Shanghai provided a platform for me to engage directly with senior Australian business representatives operating in China to learn about the challenges and opportunities facing Australian companies in China. I also had the opportunity to brief the attendees on the Victorian Government's priorities with regard to China, the soon to be released Victorian Government China strategy and the Government's inbound trade mission program.
  
  Key topics of discussion included the impending implementation of the China-Australia Free Trade Agreement (ChAFTA); the Chinese Government's 13th Five Year Plan; the liberalisation and shift towards a market led economy; e-commerce; the Chinese Government's crackdown on corruption; the rollout of austerity measures and the impact that all of these were having on the broader economy. An overarching theme of the discussion was the importance of developing high level personal relationships, to underpin business success in China.
  
  The group stated that Victoria was one of the more active Australian states in China. The VGBO network across China and a focus on inbound and outbound trade missions provides significant advantages to Victorian companies looking to access the market. It was also commented that while the ChAFTA will create significant opportunities, there were still a number of regulatory areas which would take time to be streamlined so strong government relationships will greatly aid Australian businesses in China.

• During a meeting with a Shanghai e-commerce company spoke of the Victorian Government's commitment to the China market, including our VGBOs, the largest State network of offices in the region, providing assistance to Victorian companies looking to access the China market.
  
  The company gave an overview of its operation model and how the new cross-border e-commerce industry is creating a new channel for Victorian exporters to directly market products and sell to the Chinese consumer.
  
  At the meeting, I also witnessed the signing of an agreement to export spring waters from Mount Warrenheip, Ballarat, to Chinese consumers via this company. 

Meeting with potential Chinese Investors

• Whilst meeting with the President of a large Shanghai investment company he also spoke of his recent investment in the Victorian property market, with the purchase of a building in Melbourne's CBD, that will be redeveloped into student apartments.
  
  The company also mentioned its current project in Shanghai, working with a major state owned retail group, to establish an Australian Products retail chain. His team is currently looking for suitable Australian suppliers to participate in the project.
  
  The company also commented that Australia should leverage the clean and green image of its agri and food products, and should be prepared to increase its supply capacity by at least six times in order to meet the anticipated demand from the ChAFTA and rising middle class and associated consumer spending in China. I welcomed the company's investment in Victoria, and that it work closely with VGBO Shanghai on identifying suitable Victorian suppliers for its Australian Products retail chains. 

• A Chinese medicine company gave an overview on its modernised Chinese medicine production business and detailed the family history which has more than 100 years of Chinese medical practice. When I briefed the company of Victoria's advanced position in the health and medicine sector it expressed interests in Victorian medical labs, and was looking to test a number of Chinese herbs in Victoria. A technology company introduced its two business operations; one in medical equipment and supplies trading and logistics and one in construction. The construction business specialises in infrastructure and underground pipelines and is one of the largest contractors for government projects in Sichuan and Yunnan provinces.
  
  The company has acquired a 1.3 million square meter piece of land near Chongqing airport, intends to build that into a world class health and aged care facility in China and is in search of partners worldwide to help him design and build the facility. I responded by explaining to Victoria's advanced technology and service in the health and aged care sector and recommended he engage the service of a Victorian aged care service provider.

The Victorian Connection: Networking with Victoria Alumni on 18 Nov
Sixty-six high profile alumni of nine Victorian universities, who are currently based in Shanghai, attended the Victorian Connection event. The alumni are now working in various sectors including Chinese local government agencies, media, IT, marketing, finance and banking, as well as education. This event showcased the importance of Chinese students in strengthening trade, cultural and personal ties between China and Victoria.

During the event, I spoke to the group about the deep people-to-people connections between China and Victoria by saying 'There are more than 250,000 people of Chinese ancestry in Victoria and more than 90,000 Chinese-born residents. More than 170,000 Victorians speak Mandarin or Cantonese as their primary language at home. Each year, there are more than 400,000 Chinese tourists being welcomed to Victoria through 38 direct non-stop air services per week between Melbourne and destinations in China'.

I also acknowledged the importance of Victoria alumni contributing to the great friendship built between Victoria and China over many years. With more than 50,000 Chinese students studying in Victoria in 2015, the Victorian Connection Program has become a great portal linking Victorians and friends of Victoria in China. Hence, the five VGBOs in China, led by Commissioner Tim Dillon, are a key to supporting the Program and build the relationships essential for economic cooperation and cultural exchange.

Visit to a Melbourne themed factory outlet
I was invited to tour the outlet selling sheepskin products, along with other Australian products including food and wine, personal care products and outdoor activity products.

The future focus of the company includes increasing production of new products in its Victorian factory to enable it to supply products directly to Tmall.com, an online business to consumer marketplace owned and operated by the Alibaba Group.

I congratulated the company on its achievement in China and Australia, and the opportunities created for Victorian service providers, such as shop design, graphic design and marketing video production.

Meetings in Korea

1. Meeting with pharmaceuticals company
I met with senior representatives of the company to discuss business opportunities in Victoria. The company has considerable expertise in biopharmaceutical production and recognises the strong capabilities in the Victorian bio-tech industry that could bring mutual benefit in regards to the transfer of technology to Victoria and leveraging Victorian research and development expertise.

2. Meeting with a meat and livestock company
I met with a major Korean importer of Victoria's lamb/sheep-meat which sources over 90 per cent of lamb from Victoria. I was briefed on the current state of Victoria's red meat trade into Korea and we discussed the competitive positioning of Australian/Victorian beef and lamb in the Korean market, relative to major competitors including the United States and New Zealand).

Korea has become a significant global market for Victoria's beef exports and an emerging growth market for lamb exports. Korea's sheep-meat imports have doubled over the past five years, providing new opportunities for Victorian exporters. I discussed the success of the collaborative lamb promotions with the company in Korea last year and options to work together again in 2016 to expand trade.

3. Meeting with an automotive components company
I met with the President of the company to discuss commercialisation of Victorian based materials research into its automotive products.

4. Meeting with a major automotive company
I met senior representatives of the company to understand its future plans and promote Victoria as a potential investment location.

Next Steps / Follow Up

A number of potential trade and investment opportunities in the areas of health and aged care, pharmaceuticals, e-commerce, food and fibre, retail chains and technology were canvassed during my meetings. Opportunities to utilise a Melbourne themed factory outlet to promote new products and services have also been discussed.

These will be followed up by the Department of Economic Development, Jobs, Transport and Resources. The Department will continue to liaise with the individual companies and organisations met with on this visit with the aim of quantifying and progressing the expected outcomes.