South Australia and Shandong: a model relationship

Shandong is the third-wealthiest province in China, with a $US1 trillion economy and a population of roughly 100 million. It is home to some of the most recognisable Chinese brands, including electronics manufacturer Hisense, appliance maker Haier and the Tsingtao Beer label. The sister-state relationship between South Australia and Shandong began in 1986, but it is only since 2012 that the relationship truly flourished economically.

In 2012 the South Australian state government created a China engagement strategy, and its existing relationship with Shandong was seen as a great platform via which South Australia could expand its relationship with the country. As a result, China is now South Australia’s most significant export partner with an export value of $2.2 billion in 2015.

“There’s been a lot of new life and impetus breathed into the relationship in the last four years, the leaders of Shandong and South Australia have always talked about it as a win-win,” says Martin Hamilton-Smith, South Australian Minister for Investment and Trade. “We’re not just trying to sell or promote ourselves – we’re trying to build up meaningful, trusted relationships that hopefully enrich the lives of our citizens, both here and over in Shandong.”

In 2015, the leaders of both South Australia and Shandong signed the Friendly Cooperation and Action Plan, a document that will guide the partnership for a three-year term and includes specific targets for the number of imports and exports between the state and province. Taking the relationship a step further, South Australia’s capital Adelaide and Shandong’s port city of Qingdao (the third-largest city in the province) recently became sister cities.

Given South Australia is a relatively small state with a population of just 1.6 million, China is a massive partner to engage with – hence the focus on just one particular province. To this end, the South Australian government has established an office in Jinan – the capital city of Shandong province – in order to better facilitate trade and diplomatic relations.

“The idea from both sides is that we position our respective state and province as a doorway into the wider countries,” says Minister Hamilton-Smith. “We say to Shandong, ‘come down and make South Australia your entry point into the Australian market’, and vice versa.”

One important undertaking of the relationship between Shandong and South Australia is the yearly trade missions that occur in both directions. In April 2016, the South Australian trade mission to Shandong took a total of 305 South Australian business leaders to five cities in Shandong.
The event saw the signing of 30 Memoranda of Understanding (MOU), with the completion of 13 exports deals valued at more than $3.5 million and another $50 million worth of leads to be followed up. The reciprocal trade mission later in the year saw 220 Shandong businesspeople do site visits across South Australia, participate in a trade exhibition and get up close to South Australia’s agricultural expertise at the Royal Adelaide Show.

A total of 16 South Australian companies have found new markets into China through the Shandong relationship. And while 16 may not sound like a lot, in a small state like South Australia that number represents roughly one per cent of all its exporting companies – a fair rise when you consider that these companies started exporting to China in the last 18 months.

One company which signed an MOU in the 2015 trade mission to Shandong is I Age Media, a producer of Chinese-language news and information on a variety of platforms for both the Chinese community in South Australia and Australian businesses looking to attract a market in China. Chinese-born, Adelaide-based businessman Wayne Chao is the Managing Director of I Age Media, and he says the MOU he signed with major Shandong media outfit Bandao Broadcasting Media Corporation has allowed his company to gain a foothold in China.

“As a media company, we are looking for more cooperation between Australia and China that will allow us to reach more people in China,” says Wayne. “The MOU is a platform for us, where we can bring all the information about South Australia to Shandong, and bring all the information about Qingdao to Adelaide as well.”

Wayne is also the co-founder and President of the South Australia Shandong Cooperation and Development Association, which was started off the back of the 2015 trade mission to Shandong. His role is to liaise with members of the association, as well as the governments of South Australia and Shandong, to facilitate more meaningful and beneficial platforms for businesses in the two countries/cities. The association also publishes a magazine called Welcome to South Australia – a comprehensive introduction to life in South Australia (and Australia in general) that is printed in Chinese and distributed both in Shandong and to the Chinese-speaking community of Adelaide.

“We use the association to promote and create more understanding of South Australia for the Shandong people and to attract more investment, tourism and international students to Adelaide,” says Wayne. “For South Australia, Shandong is the key that allows China to get to know us. We have huge potential to attract more investors from China and make Adelaide a well-known tourism and education destination.”

It’s not just trade and businesses that benefit from the relationship between South Australia and Shandong. The respective governments also recently initiated an exchange program known as Shandong Connect, where a number of South Australian public servants spend two weeks working alongside their counterparts in the Shandong public sector, and vice versa.

Similar exchanges also happen in cultural, educational and scientific institutions between the two states: Adelaide recently accommodated 13 scientists from the Shandong Academy of Sciences, and every year 20 county mayors from Shandong visit South Australia to do a two-week program of lectures and tutorials with government officials.

Another sign of the burgeoning health of the relationship was seen in December 2016, when China Southern Airlines began operating direct flights between Adelaide and Guangzhou with easy connections into the Shandong cities of Jinan or Qingdao. South Australia received 36,000 Chinese tourists in 2016, and the government expects not only a large surge in inbound tourist numbers on the back of this new arrangement, but also a greater increase in fresh produce freighted outbound.

“The relationship is driven by the highest level of government – Premier Weatherill invests significant personal time in this, and he really leads from the front,” says Minister Hamilton-Smith. “We have processes that ensure that the government – across the board – is thinking about how it can breathe life into its engagement with Shandong and how it can contribute to Shandong’s development.”

The relationship between South Australia and Shandong not only benefits businesses and governments, it also builds trade and tourism numbers between the two areas and is the platform for a deeper exchange of ideas and information both culturally and diplomatically. It is truly a win-win for all involved, and a model sister-state relationship that sets the bar very high for states and provinces around the world.