By Latika Bourke
Science, innovation and a move to boost start-ups have been pushed to the fore of the Australia-China relationship with a $100 million joint research and science precinct to be built at Sydney's University of New South Wales, Prime Minister Malcolm Turnbull has announced.
The precinct is being touted as a "global first" by the university and places Mr Turnbull's promise to advance Australia's innovation, scientific and research capabilities at the heart of his foreign policy agenda. Mr Turnbull is on his first official visit to China since taking office in September. He revealed the collaboration in a signing ceremony with Chinese Premier Li Keqiang at the Great Hall of the People in Beijing.
Prime Minister Malcolm Turnbull listens to Chinese Premier Li Keqiang during a ceremony at the Great Hall of the People in Beijing.Credit: AP
Earlier in Shanghai, he said Australia and China "have to work much harder" to expand business links as their economies and mutual interests shift. And he said China would find transitioning to open markets and the rule of law "well worth the challenges."
"In the post-resource construction boom, we come to China with similar skills and endowments as those early Australian investors; innovation, a global mindset and the long investment horizons which come from transparent markets and the rule of law," he said.
Mr Turnbull is on his first official visit to China since becoming prime minister.Credit: Andrew Meares
The government has also announced a "landing pad" to be created in Shanghai to provide space for Australian entrepreneurs and professional networks.
The $100 million precinct will lead to an Australia offshoot of China's Torch program, which supports innovation, fosters start-ups and mobilises economic and human capital, being established at the UNSW.
"This partnership is a global first and has the potential to reset the Australia-China bilateral relationship and boost the nation's innovation system," UNSW president and vice-chancellor Professor Ian Jacobs said in a statement.
Eight Chinese companies have committed $30 million to support Australian research into biotechnology, energy and environmental engineering. It is hoped the investment will build to $100 million, which would fund the new precinct by 2025. Torch Industry partners will set up incubator areas at UNSW's Kensington campus, close to researchers and student entrepreneurs in the interim.
UNSW has touted the research and science precinct as a "global first".Credit: Louise Kennerley
China's 150 Torch precincts generate 7 per cent of GDP. Independent economic modelling by Deloitte Access Economics estimated the new Torch Innovation Precinct at UNSW would add more than $1 billion to Australia's GDP in the first 10 years alone.
Earlier, Tourism Minister Richard Colbeck said Australia and China had agreed to designate 2017 as the "Australia-China Year of Tourism". China is Australia's most lucrative tourism market and is estimated to be worth $13 billion by the end of the decade. Nearly 1.1 million Chinese visitors travelled to Australia in the 12 months to February 2016. Their entry to Australia is set to become easier with a new online visa application process in Mandarin and just two, instead of eight, student visa categories.
Steel and sea
While Mr Turnbull is seeking to boost trade, tourism and people-to-people links during his visit, there are two issues which threaten to overshadow the positive collaborations.
One is the issue of steel, of which there is a global glut, mainly due to oversupply from Chinese production, much of it made with Australian iron ore. Australia exports about $38 billion worth of iron ore to China and overall two-way trade is valued at about $160 billion per year. It is Australia's single biggest trading relationship.
In his speech to the Australia Week in China lunch in Shanghai, Mr Turnbull said Australia had helped shape the image of modern China through its iron-ore exports.
"The modern Shanghai skyline has sprouted more than 1300 steel-reinforced skyscrapers, more than any other city in the planet. And Australia has helped shape this skyline, all that steel was made with help, in many cases of Australian architects, Australian engineers and of course, Australian iron ore."
The demand for Australia's mineral resources had "underpinned the greatest run of unbroken prosperity Australians have ever known", he said.
But China's growth has threatened Australia's manufacturing industries. The glut of steel has been felt in both Australia and Britain in recent weeks, with steelmaker Arrium placed into voluntary administration, threatening more than 5000 Australian jobs. Mr Turnbull has ruled out government intervention or subsidies. In south Wales, Indian giant Tata Steel has put its Port Talbot plant up for sale, forcing the Conservative government to contemplate protectionist measures.
Trade Minister Steve Ciobo, who is also in China, told Sky News Australia that he would be sounding out the Chinese on the issue, rather than delivering any message from Australia.
"Well, it's not a message, it's to ask them about their prospects with respect to the oversupply of steel and how they see the market playing," he told interviewer David Speers.
"It's in no one's interests for there to remain a global oversupply of steel," he said.
"There will, of course, need to be some rationalisation in the industry and we'll see how that plays out."
The second issue set to cause displeasure is China's actions in the South China Sea. Mr Turnbull is expected to raise the matter on Friday but Beijing's mouthpiece, The China Daily, has pre-emptively urged Australia to choose between its "economic interests" and "toeing the US line".
"Australian Prime Minister Malcolm Turnbull, who is leading a 1000-company delegation to China to tap the country's biggest export market, should be careful and considerate about Canberra's stance on the South China Sea," the paper warned.