Victoria lobbying for role in economic expansion of Hong Kong

Author: David Wroe, defence and national security correspondent for the Sydney Morning Herald and The Age.

Victoria has begun talks on taking a “front and centre” role in China’s latest economic expansion blueprint - the transformation of the Hong Kong bay area into a technology powerhouse - in the hope of securing hundreds of millions of dollars worth of business.

Fairfax Media understands that during his most recent visit to China in early June, Premier Daniel Andrews held a lengthy meeting with Hong Kong chief executive officer Carrie Lam during which they discussed Victorian participation in the massive project.

The Greater Bay Area Initiative is a plan backed by Chinese President Xi Jinping that will link up Hong Kong, Macau and nine industrial cities in the southern Guangdong region with the aim of creating an economic and innovation hub in the style of Silicon Valley.

“The GBA initiative presents some potentially massive opportunities for partner cities and regions and we’re unashamed about wanting Victoria front and centre,” a Victorian government source said.

“We have strong economic ties and good relationships with Hong Kong and China – which have proven to be a solid foundation for constructive discussions about future involvement in the GBA initiative.”

Beijing is expected to unveil a detailed blueprint for the plan in the coming weeks. It will require infrastructure work but also critically a lot of work to harmonise laws, regulations and business cultures. Because of their recent colonial histories, Hong Kong and Macau are separately administered and have different laws and standards to Guangdong which is historically part of the Chinese mainland.

But the bay area plan may have a controversial dimension in that it is part of Beijing’s “Made in China 2025”, an ambition to make China the world’s leader in high-end manufacturing but which is shaping up as part of a trade war between China and the United States.

The US accuses China of fuelling its manufacturing push through the theft of intellectual property and forcing technology transfer by foreign firms wanting to invest in China by making them enter joint ventures with local companies.

Mr Andrews has been an unabashed promoter of economic links with China, visiting every year of the past four.

“We’ve engaged respectfully and regularly with China,” Mr Andrews told Fairfax Media. “We’ve been very warmly received and Victoria is reaping the benefits. We’re now firmly China’s gateway to Australia.”

He said his government had more than tripled Chinese investment in the state and doubled exports to China in the past four years.

Mr Andrews was the only Australian state or territory leader invited to Mr Xi’s forum on the Belt and Road Initiative infrastructure program last year.

Neale O’Connor, an expert on Chinese manufacturing based at Monash University’s Malaysia campus, said the obvious opportunities for Victoria would be in education, health and human resources.

He said the project “marries very closely with ‘Made in China 2025’” and also with China's broader Belt and Road Initiative. He said transparency for foreign firms doing business in the region was improving, meaning Victorian firms need not be too wary about being involved.

“There are ways of protecting your property rights, patents, technologies that maybe was not around 10 years ago,” he said.

The Pearl River delta region, as the area is also known, is one of the most heavily populated areas on earth. The economies of the 11 major cities to be linked - which also include Guangzhou, Dongguan and Foshan - were worth more than $2.1 trillion last year, more than Australia’s economy.

Read more at Sydney Morning Herald