The Albanese Government has a clear goal in mind with China: to find new global partnerships and avoid being caught in Beijing’s crosshairs. It is looking to Japan, the U.K and France for help.
The state has three trade and investment offices in-market supporting South Australian exporters, Chinese buyers and investors – especially during worldwide travel restrictions due to Covid-19.
Politics
South Australia (SA) is a state with a long history of political and social innovation. The state has a reputation as a “social laboratory” pioneering legislation and political movements that have later become national policies. In recent times SA has become a leader in the renewable energy sector, and as a result has strong connections with China through the bilateral Joint Initiative on Renewable Energy.
The political system in SA is a Westminster parliamentary democracy. Government is formed by the group that wins a majority in the lower house of parliament, which has 47 members called the House of Assembly. The leader of the winning party becomes the Premier. SA has a reputation for having particularly high levels of electoral integrity. This is largely due to the fact that SA has a constitutionally mandated system of electoral apportionment that has maintained the principle of ‘one vote, one value’ since 1970.
In terms of the state’s economic performance, SA has historically tended to struggle more than other states and has often been perceived as being an economic backwater. The demise of the Holden car plant in 2017 reinforced this perception, and there are concerns about the future vitality of the economy.
Against this backdrop the Marshall government, which came to power in 2018, has been grappling with a range of policy issues. It has a clear commitment to intersectoral collaboration, including on equity goals. However, in practice its approach to these goals has been more limited than one might expect given the policy agenda on which it was founded. This is primarily because, as Howlett, Ramesh and Perl suggest, the dominant neo-liberal policy orientation shut down the small policy space available for equity considerations, and constrained and undermined policy actors’ ability to consider or prioritise such ideas.
Trade
China’s growing middle class and appetite for premium goods has driven South Australia’s trade and investment relationship with the country to expand. In dollar terms, the state’s trade and investment with China has grown to billions over recent years in agribusiness, food and wine, international education, tourism and property.
South Australia’s largest trading partner is China, with annual exports to the country totalling over $4 billion. This includes iron ore and concentrates, copper and refined petroleum products.
In addition, South Australian companies can benefit from the RCEP (Regional Comprehensive Economic Partnership) free-trade agreement, which is expected to open up new opportunities for trade with Asia and beyond. The RCEP aims to connect Australia, China, Japan, India and South Korea, representing 13 percent of the global economy.
China remains one of South Australia’s top export destinations for merchandise, up 48 per cent in the year to July 2023 to $2.8 billion, primarily due to increases in the sales of iron ore and concentrates, wheat, petroleum products and almonds.
The state’s agribusiness, food and wine industries are particularly well positioned for continued growth in the Chinese market. As China continues to urbanise, it will have a growing demand for agricultural commodities like beef, wheat and wine as well as for tourism and education services.
The Labor Government’s commitment to the New Colombo Plan will help strengthen ties with key universities in China as we work towards our goal of 10,000 students from China by 2023. The plan will also help build links between Chinese and Australian businesses through internships, mentorships and other exchanges. The program will help our young people gain new insights and ideas about the region and build a network of contacts that they can draw upon throughout their careers.
Investment
The China market is the single biggest export market for South Australia and has grown in the billions over the last 10 years – especially in agribusiness, food and wine and international education. The growth in this region has been driven by exponential demand from Chinese consumers for premium goods and services.
South Australia is well placed to capitalise on the growing opportunities in China with a number of our industries already making significant investments in the country. These include grain farming, agribusiness and food processing (such as the development of Shanghai-based Australian Wheat Board) and wine and tourism.
In addition, the New Colombo Plan’s emphasis on internships and mentorships will further strengthen the links between our students and their counterparts in Asia. This will help to ensure that our students leave with the skills and confidence to pursue their career ambitions wherever they end up in the world.
A key component of this strategy is a focus on one province in particular, Shandong. This is where many of the major Chinese businesses, such as Haier and Hisense, are based. It’s also where Tsingtao Brewery is based, and where the port city of Qingdao is located.
The state government has established an office in Jinan, the provincial capital of Shandong to facilitate and develop this relationship. There are also a number of yearly trade missions, both in each direction, with 305 business people from South Australia recently returning from a mission to Shandong where they signed more than 30 MOUs and participated in a trade exhibition.
Consul-General He welcomed the South Australian government’s commitment to the greater China engagement strategy and said that China was willing to maintain communication and exchanges with all political parties of the state. He urged both sides to work together to boost cooperation between the two countries and contribute to the sound and steady development of China-South Australia comprehensive strategic partnership.
Education
Approximately 1.4 million people in Australia claim Chinese ancestry, and South Australians are no exception. Sydney’s Chinatown is a bustling neighborhood, and the city’s Chinese Garden of Friendship has a moat filled with koi fish. The garden was inaugurated in 1988 to celebrate the close ties between the two nations.
The state government oversees the education system, which consists of 3 stages – preschool, primary and secondary school, followed by tertiary studies. Children can attend either public (government) schools or private independent schools. The state is ranked as the best place in Australia to raise kids, and it has one of the highest educational achievement rates among developed countries.
When it comes to education equity, however, the state is lagging behind. In a world class education system, students should all be given the opportunity to thrive. Currently, this isn’t the case in South Australia, where inequalities prevent many students from achieving their full potential.
Education leaders in South Australia have historically viewed equality through an academic lens, focusing on narrowing achievement gaps and improving NAPLAN test scores. This approach has led to a competitive school culture, which has exacerbated socioeconomic segregation and stagnated overall performance.
In the past, political parties in South Australia have competed for the votes of Chinese-Australians, a community that makes up 5.5 percent of the population. But today, it’s rare to see a Chinese person elected to any level of government in the country.
South Australia’s economy has a close connection with China, which is its largest export partner. The two share a long history of partnership, with a tidal flow of raw resources like iron ore and coal moving from the state to China and a corresponding river of manufactured goods flowing back. In 2023, China took in more than 40 percent of South Australian exports.
Tourism
As the tourism industry continues to recover from COVID, the SA Government is supporting local businesses and operators through the Nature-based Tourism Co-investment Fund. This is a pilot program designed to stimulate new or improved regional tourism offerings that support the state’s nature-based tourism strategy and are ecologically sensitive. This funding will help to position South Australia as a world-class ecotourism destination.
Despite the ongoing trade friction, China remains South Australia’s largest export market. For the year ending in July 2023 China was responsible for almost $2.8 billion worth of merchandise exports to South Australia, led by iron ore and concentrates, petroleum products, wheat and barley, as well as seafood, coal, wine and aluminium. In the education sector, students from China make up the second biggest cohort of international enrolments in South Australian schools and universities.
While it is expected that tourist arrivals from China will return to pre-pandemic levels by 2026, many tour operators have already been forced to restructure their operations. One of those is Odyssey Travel, which used to rely on the Chinese market for a substantial portion of its business. The company now takes a more holistic approach to its clients and diversifies the groups it sends on trips.
The company is also working to foster relationships with Chinese travel agents, and has been conducting educational sessions in China to teach them about the destination. In addition, it has created a dedicated website and social media channel for Chinese travellers to stay up-to-date on what’s happening in South Australia.
But while Doyle and other operators acknowledge it will take time to get the Chinese market back, they don’t see it as a race against time. The ANU’s Herscovitch believes that while it’s undoubtedly a challenge, stability in the relationship will benefit both sides into the future.