“THE Territory needs foreign investment.”
Chief Minister Michael Gunner’s voice rings out loud and clear, echoing boldly above the distant hum of Beijing traffic rolling past behind him.
Chinese skyscrapers tower into the smoggy sky, dwarfing the small group of Territory business delegates below; it’s a striking combination of pollution and progress which cannot be ignored.
Gunner believes the key to the Territory’s financial success will never be simply handed over from Canberra but may be earned by building long-term partnerships with major overseas investors — from countries such as China, which has a market of about 1.4 billion people.
“We have to grow our population, which is dependent on creating a large number of jobs — the two go hand-in-hand,” Gunner says.
“We need a significant investment into the north to deliver those jobs. The mostly likely source of that large-scale private investment into projects that have large risk and require patient investment is from countries like China that are prepared to take that gamble.”
With this in mind, Gunner and the Darwin Major Business Group are leading a trade delegation of about 80 people to the Chinese city of Shenzhen, keen to tap into the thriving Asian market now just a five hour plane journey away from Darwin.
The Territory’s leader is very optimistic about the potential outcomes.
“Chinese investors are very patient investors, they’re prepared to put the money upfront and wait for a longer time frame than most, which suits the Territory,” Gunner says. In the NT, many projects will take seven to 10 years to start delivering profits to investors.
The two-day ‘Reaching South to the Territory’ initiative is about networking — connecting NT industries with potential overseas investors and marketing opportunities to Chinese businesses.
It’s a moment about 14 years in the making for Australia China Business Council NT branch president Daryl Guppy. He’s taken four different chief ministers to China, urging them to see the growth potential in foreign investment.
“It’s an overnight success that’s taken about 14 years to get here,” Guppy says.
“The NT is probably one of the leading Australian jurisdictions in regards to its relationship with China, but we’re not always at the cutting edge. China changes very, very rapidly.
“The reality is, the NT is desperate for capital. We never have enough capital to be able to fund infrastructure and the investment industry and business and so on — we’re not going to get that federally. We need global capital.”
As Guppy explains, the complication lies in earning the trust of Chinese investors. In China, big business is never conducted over email and Australian industry leaders can’t simply call and pitch their potential over the telephone.
Before entering into a deal, Chinese delegates must build relationships, often needing to be introduced through a trusted mutual friend.
As a communist country, the Chinese businesspeople put a lot of trust in their government’s backing. As such, the NT Government’s banner on yesterday’s trade expo reads as an endorsement, an indication that those in Shenzhen can be relied on to do business.
“NT businesses are small, we’re not household names in China, not yet — we have to be able to prove we are a reliable partner,” Guppy says.
Industry professionals estimate Shenzhen has a radius of about 75 million potential customers.
That’s 75 million people who may want to buy the Territory’s natural minerals, eat its barramundi, and wear its world-class crocodile leather.
The expo is split into six key sectors:
■ International Education and Training
Essington International School principal David Cannon is the head of the NT’s only internationally accredited school. He believes young people growing up in the Territory will benefit from strong ties with their Asian neighbours, which can open up opportunities as they grow.
“For Americans in the 1800s, they used to say ‘go west’, for my students I say ‘go north’,” he says.
His goals for this trip are short-term but his ambition peers far into the future. By Tuesday, he wants established links with international schools in Shenzhen, and the opportunity to do international basketball competitions and coaching sessions by November.
Essington has set up three sports academies in tennis, basketball, and golf. In the lead-up to the Arafura Games, Cannon wants to host an international junior high school tournament. He’s in Shenzhen to meet schools keen to take part.
■ Major projects, infrastructure and logistics
Landbridge Group vice president Mike Hughes spent last week in discussions with the NT Government about doubling the size of Darwin Port and starting work on its new luxury hotel.
Darwin’s $200 million Westin luxury hotel was officially approved in July and Hughes hopes pre-construction work can start by the end of the year.
Expanding the size of Darwin Port will also allow the Chinese multinational company to further capitalise on the area’s tourism potential.
Now the moratorium on fracking in the NT has been lifted, Hughes — and more broadly Landbridge — wants to explore mining opportunities in the Territory.
Trade forums allow the organisation to build connections in the sector and understand how their investment may work in a practical sense.
“From the beginning, we’ve always said what excites us about the NT is the whole breadth of opportunity,” Hughes says.
■ Mineral and energy
Team NT executive Paul Tyrrell heads up the NT gas taskforce.
He’s convinced a partnership with China will have a positive flow-on effect to the Territory economy — and that the NT’s LNG industry can look to double its output with the help of foreign investment.
“If there is Chinese investment in gas manufacturing there will be considerable jobs and growth in the economy, because the benefits you get from manufacturing are higher than there are from LNG,” he says.
Tyrrell believes most of the jobs on the ground will be managed by people in the Territory — which means a major employment boost. This boost will also help the local economy, with people spending their incomes with local traders.
■ Tourism
For Tourism Top End director Rachel Beaumont-Smith, the allure of yesterday’s expo was connecting with the Chinese market and learning how to best sell the NT to them.
She’ll need to get more adept at online marketing as, in her words, “putting something in a brochure just won’t cut it”.
“My aim is to really find out how we can get into the market,” she says.
“How do we start giving out information about the NT to tourists before they land?”
As Chinese tourists are very tech-savvy, Beaumont-Smith says operators keen to tap into the market need to make sure their websites are optimised and start using QR codes — a matrix barcode so common in China that street vendors use them.
After direct flights between Darwin and Shenzhen came online in May, Beaumont-Smith realised she needed to be talking with Chinese travel. After all, nobody knows Chinese tourists like their own travel agents.
■ Agribusiness
It’s the first time Humpty Doo Barramundi’s Bob Richards has taken his products to the foreign market and tried to sell them at such a high scale.
The direct flight is the only reason he can entertain the idea of doing business in China — the five hour travel time means his perishable foods will arrive in Shenzhen fresh and able to be sold as premium products.
“To come somewhere like this, that we have a direct flight to, that has a population of more than 100 times that of Darwin — is a staggering opportunity for us,” Richards says.
Ideally, he’s keen to set up a partnership with a Shenzhen business chain who can take his fresh barramundi and on sell them to Chinese consumers. But this is a long-term goal, and Richards knows business in China takes its time.
“Business in China is all about relationships; and relationships start with just one handshake,” he said.
■ Tropical Health
National Critical Care and Trauma Response Centre executive director Len Notaras wants to bring the healing power of traditional Aboriginal medicines to China and use Chinese drone technology to help Territorians living in remote areas.
While many may question why the health sector is exploring a partnership in China, Notaras believes every country has something valuable they can teach the other.
“From a western perspective we think we’ve got all the answers and we haven’t,” he says.
“It’s about formulating relationships, there a lesson we can learn here. And if that lesson can help Territorians, it is well worth it.”
Notaras says China’s technological advancements could see medicines and treatments flown in to remote NT communities by drones.
It has the potential to help rural areas cut off in the wet season — and potentially save the lives of Territorians.
■ ■ ■
OPPOSITION leader Gary Higgins is supportive of the Government doing business with China but is critical of the price tag attached to last week’s delegation.
With taxpayers footing the bill for many of the public servants, Higgins feels the money could be better spent in the Territory.
“Travelling to sell the capacity and capability of the Territory is a good thing but there should also be some way to measure the effectiveness of this spend,” he says.
“I question why the Chief Minister needs to be accompanied by almost 30 public servants.”
Higgins also wants the NT Government to extend more support to other Asian countries — including its direct neighbour Indonesia. He says opportunities closer to home are more likely to have more impact on the Territory’s budget in the short term. “Across the region there will be 600 million people moving into the middle class over the next decade,” he says.
“The first priority of government should be strengthening and deepening ties with our old friends in Vietnam and, in particular, Indonesia. While China will be a big opportunity for Territory exporters tomorrow, Vietnam and Indonesia are critical markets for Territory exporters today.”
■ ■ ■
ONLY time will tell if Chinese investors have bought the NT’s recent sales pitch but that time will not come soon.
Those who swapped cards in Shenzhen will have to spend months working on their relationships, earning trust and proving themselves before entering into any kind of business arrangement.
It’s not a quick fix but it may just be the key to the NT’s financial independence.
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