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Speech

ACBC (WA) Australia China Business and  Trade Foundation  Kurrajong Auditorium - Confucius  Institute  University of Western Australia,  Claremont Campus

7:00 PM, Monday 25 September

Acknowledgments

z Dr Desmond Williams, President of the Australia China Business

Council (Western Australia)   z Professor Alan Robson, Vice-Chancellor of UWA and Professor

George Stewart   z Professor Jeanette Hacket, Vice-Chancellor of Curtin

z Jon Philp, Woodside

z Distinguished guests

z Ladies and gentlemen

Confucius once said - “If you think in terms of a year, plant a seed; if  in terms of ten years, plant trees; if in terms of 100 years, teach the  people.”

That is how we should view our relationship with China - for the long  term.

I am delighted to be at the Confucius Institute to talk about the  education and science relationship between Australia and China and  opportunities for the future.

This is one of the most exciting areas of my portfolio because of the  tremendous opportunities this growing engagement presents for both  Australia and China.

And like the Confucian saying - we need to think of our relationship,

not in terms of a year or 10 years. We need to be looking at the  century ahead.

But, first, let me commend the work of the Australia China Business  Council and its members in expanding the relationship between China  and Australia through the development of business and investment  opportunities.

I congratulate the Confucius Institute and its partners, the University  of Western Australia, Zhejiang University, and the Chinese Ministry of  Education’s National Office for Teaching Chinese as a Foreign  Language, on the opening of this new Institute here in Claremont.

The Confucius Institute is a striking example of the increasing inter-connection between Australia and China at a variety of levels.

Not only is there a strong and growing business relationship between  Australia and China but increasingly this is underpinned by our  expanding academic, cultural and personal linkages.

The presentations by our colleagues this evening George Stewart from  UWA and Jeanette Hacket from Curtin have touched on the  complexities of the education and science relationship with China and  have highlighted the need for a sophisticated and strategic approach  to this relationship. The course Jeanette mentioned, The Executive  Programme jointly presented by Curtin and UWA at The Australian  Centre for Natural Gas Management specifically targeted to Chinese  executives is a good example of this approach.

As you are aware, doing business in and with China presents its own  particular set of challenges - some cultural and many regulatory. To  improve the operating environment for Australian businesses and

create further business opportunities, Australia is committed to  negotiating a high quality, comprehensive free trade agreement with  China.

In April this year in Beijing I spoke at a conference on the Challenges  and Opportunities of an FTA particularly in services trade. I suggested  that a comprehensive FTA between China and Australia that  encompassed services would not damage, but rather would, bring  significant benefits to China in services.

As John noted, I also had the opportunity to open Woodside’s Beijing  office whilst in China which highlighted the business and economic ties  between our two countries.

The prospect of an Australia China FTA is of particular interest to  Australian education and training institutions.

Let me put this in context.

In 2005 more than 81,000 enrolments of Chinese students were  recorded with Australian education and training providers in Australia.  China is by far the principal source market for overseas students in  Australia.

These students make a significant academic, social and cultural

29/09/2006 http://www.dest.gov.au/Ministers/Media/Bishop/2006/09/b001290906.asp

contribution to the communities in which they study and live, and also  make a sizeable contribution to an export industry worth $7.5 billion  to Australia in 2004. It is now our 4th largest export, after coal, iron  and tourism and is an industry worth more than the exports of beef or  wheat.

Alumni of Australian education represent a vast pool of talent for firms  to access when doing business in China. They can help companies  bridge the language and cultural divide, and open invaluable business  networks. More importantly these students are building a human  bridge between our nations. People-to-people links are priceless in  Chinese culture - and we must recognise this significance.

Similarly the Confucius Institute is playing a crucial role in building  mutual understanding between our nations through equipping  Australians with the skills and knowledge relevant to engaging with  our great northern neighbour.

I am pleased that Perth is the host for a Confucius Institute as I  believe that Western Australia will be a key partner of China in the  future.

While the achievements and figures I have mentioned are impressive,  the future success of Australia and China’s education relationship  rests on a more strategic and sophisticated approach, characterised  by the following objectives:

z diversification in the fields of study and courses that Chinese

students undertake in Australia, including the attraction of more  Chinese students to higher degree and research programmes;

z improved opportunities for the two-way movement of students,

academics and professionals between our countries; and

z deeper and longer term research cooperation and collaboration,

particularly in the sciences.

There are a number of initiatives underway to achieve these  objectives.

Firstly, in April, together with my colleague Alexander Downer,  Minister for Foreign Affairs, I announced the $1.4 billion Australian  Scholarships initiative which greatly expanded the number of  Endeavour Programme scholarships available to the Asia-Pacific  region, including for postgraduate students.

Last week I attended the Cheung Kong/Australia Endeavour Awards  reception at UWA which brought home to me how important these  exchange programmes are and the opportunities they provide for the  students. One Chinese student informed me that the exchange had  been a life-changing experience for her.

The Endeavour Programme includes Endeavour Executive Awards,  which support two-way professional development opportunities for  high achievers in business, industry, education or government from

participating countries, including China.

Page 3 of 8 The Hon Julie Bishop MP - Media Centre

The Executive Awards may be of interest to some members of the  audience here this evening!

Secondly, in Brisbane in April at the International Education Forum I  hosted a meeting of 27 Asia-Pacific education Ministers or department  heads to discuss education issues in the region.

Recognising the importance of student mobility and exchange to  fostering understanding and mutual respect in the region, Ministers  issued the Brisbane CommuniquÃÂ© which articulated a common goal of  increasing student mobility and the transferability of qualifications in  the region.

The Australian Government is currently progressing the work of the  CommuniquÃÂ© in conjunction with participating countries, including  China. A well-credentialed, mobile workforce with internationally  recognised qualifications supports the capacity of Australian firms to  do business globally.

Thirdly, and of great strategic importance, the Australian Government  is engaged in a number of initiatives to deepen and enrich the  growing collaborative relationship between the Australian and Chinese  science communities.

It is this strategic science relationship that I would particularly like to  focus on tonight.

Australia regards China as a key priority partner for Australian  science. Not in the same way as we regard the essential need to  collaborate with the world’s most prolific science-producing nation -

the United States a - but because of what China represents - which is  unprecedented potential.

We all know that China has in recent decades leap-frogged the  traditional economic development paradigm by investing in its skilled  workforce and its innovation system.

While this is a phenomenon that has drawn some focussed attention,  and led for example to statements such as the USA announcement in  February 2006 of the ‘American Competitiveness Initiative’, I am  inclined to see more of the opportunity than the threat.



China is striving hard to create a knowledge based economy and has  thus placed science, technology and education high on its list of  national priorities.

In late 2005, the Chinese Government released its National Medium  and Long-Term Science and Technology Development Plan.

This forms the basis of China’s science and technology development  planning for the next fifteen years - to 2020.

The plan is comprehensive, covering a wide range of sectors, from  public health and national security, through to manufacturing and the  transport sector.

But it also covers - and this is of key interest to Australia - the

sectors of:

z energy;

z water and mineral resources;

z environment; and

z agriculture

The opportunities for Australia are clear.

These are four sectors in which Australia faces significant scientific  challenges in coming decades.

If we can collaborate with some of China’s best minds, which are also  focussed on finding clever scientific solutions to these challenges then  we are both better off, as nations and as members of the global  community.

Let me dwell for a moment on the phenomenal resources that China is  bringing to bear on its science and technology development. The long  term plan aims to bring the amount of research and development  funding in China to around $160 billion AUD by the year 2020.

In absolute terms this is clearly a lot of money, but that’s not the only  remarkable feature of China’s investment in science and technology.  Since 2000 China’s national expenditure on research and development  has grown from just under $14.5 billion (Australian) to over $38  billion, a growth of over 150%.

The Australian government has heard from leaders in the business  and education sectors of the need for a more systematic and strategic  approach to engaging with China.

We have also heard their concerns that other countries are also  positioning to take advantage of the rise of China.

In particular, the Prime Minister’s Science, Engineering and Innovation  Council is currently considering the report of a working group which  investigated the challenges, opportunities and threats to Australia  from the economic emergence of China (and India).

The working group stressed the need to capture the significant  opportunities for the Australian economy offered by China’s rapid  growth; to strengthen linkages at the government-to-government,  education, research and industry levels; and to target and focus our  resources so as to strengthen the foundations for Australia’s future  competitiveness.

Sound advice no doubt, and I can assure you the Government will be  giving serious consideration to the recommendations of this study.  But let me discuss with you some of what the government is currently  doing to strengthen our science and technology links with China.

I have met recently on two separate occasions with Professor Xu  Guanhua, China’s Minister for Science and Technology and, I  understand a very influential figure in Chinese policy development.

In Beijing Professor Xu and I discussed the close economic ties, and

more particularly the close scientific ties, enjoyed by our two  countries, and we both agreed there was potential for even greater  collaboration in science and technology.

In fact, he was very impressed by our Nobel Laureates for Barry  Marshall had just visited China, and I was walking in his wake. I can  confirm Barry was treated as a celebrity in China. We have a long way  to go in appreciating and valuing our great scientists and researchers!

Professor Xu identified a key number of areas where China would  welcome increased collaboration with Australia, and I guess you will  not be surprised at what these are, as they are not only key scientific  challenges for China, but also for Australia.

I’m speaking of energy sustainability and agriculture. China is keen to  cooperate scientifically with Australia in all areas of sustainable energy  research including:

z renewable energy

z clean coal technology

z hydrogen energy production and storage

z fuel cells

z and improved coal mining technologies.

Professor Xu also indicated that China is keen to cooperate in  agricultural research, and in particular, water resources management  - also a key issue for Australia.

The Australian government is already actively supporting collaboration  and senior government-level dialogue in both these areas.  For example, my colleague Ian Campbell, Minister for Environment, is  leading a business mission to China in mid October in the field of  Renewable Energy.

I refer also to the work occurring through the Australia-China Climate  Change Partnership, established in 2003, and the Australian  sponsored coal summit with China in 2005.

The Australia-China Climate Change Partnership will continue to  promote cooperation on a broad range of climate change issues,  including measures to reduce greenhouse gas emissions through the  cleaner use of fossil fuels.

The Government is also working with China, multilaterally, on the  topic of climate change through

z the APEC Energy Working Group

z the Carbon Sequestration Leadership Group

z the Methane to Markets Partnership and more recently

z the Asia-Pacific Partnership on Clean Development and Climate.

In my portfolio there are 3 key strategic scientific engagements I  would like to mention;

First, there is the Australia-China Special Fund for Scientific and  Technological Cooperation. This fund, which is designed to specifically  support research activities between Australian and Chinese scientists,

was established in 2000.

From its modest beginning, of $250,000 per country for each annual  cycle of the fund, it has now grown to a substantial bilateral fund of  $4 million per annum with each side contributing half the funds, in  other words, supporting the participation of its own nationals.   It has been a spectacularly successful fund, as the strong demand  upon it in recent years from the Australian scientific community has  shown. It was this demand for funding for high quality projects that  led me to increase the Australian contribution earlier this year to $2  million - unequivocally supported by China.

The fund supports leading edge research collaboration in advanced  materials, agriculture, biotechnology, the environment, mining and  energy and information and communications technology.

Let me give you a few examples of what we’re funding -

One recent project seeks to understand the behaviour of ‘quantum  dots’. The creation and observation of these nanostructures, which  are often described as ‘artificial atoms’, will increase scientists’  understanding of their properties for a wide variety of future  applications, including new types of lasers and optical communication  systems.

Another project, in the area of neuroscience, will use magnetic  resonance imaging (MRI) techniques to investigate the patterns of  activity in several areas of the brain in patients with initial and later  stages of visual impairment. This research will lead to a better  understanding of the changes to brain activity in some conditions  which result in blindness.

This is valuable scientific research which will benefit both our societies  in the future.

My support for mutually beneficial collaboration is however not all  researcher-initiated. I am currently targeting funding towards an  annual scientific symposium between the Chinese Academy of  Science, and Australian Academies of Science, and Technological  Sciences and Engineering.

The third such Academies Symposium will take place in Sydney this  November and will bring together eminent scientists from Australian  and Chinese research communities, to discuss energy, including clean  coal, nuclear power, transportation fuels and renewables.

Also, on the topic of targeted support for strategic research  cooperation, earlier this year I announced Australian Government  funding support for the Australia-China Centre on Water Resources  Research, located at the University of Melbourne.

The centre will further increase research networks between Australian  and Chinese scientists and promote multi-disciplinary research  collaboration into water resources in both countries.   Looking at the Big Picture - we all know that international  collaboration with the global science and technology community is  vital for Australia in order to meet the economic, social and

Page 7 of 8 The Hon Julie Bishop MP - Media Centre

environmental challenges of our future.

It is also clear to us that China is rapidly emerging onto the world  stage in terms of its investment and its capability in science and  technology.

It is also clear that Australia and China have common interests and  face common challenges that only science and technology can solve,  and that we must therefore cooperate closely.

There is great opportunity for further science and technology  engagement between our two countries.

As we see other countries doing, particularly North America and  Europe, which are seriously building profile and links into the research  organisations in China, Australia must also continue to build  institutional, business and individual links into the research and higher  degree institutions in China.

For Australia, these connections will not only bring tangible links into  the research and development communities in China, they may well  also generate significant numbers of higher degree research students  to come to Australia and fill some of our own gaps in key research  areas.

Not only then would our key industry and scientific bodies benefit  from the size and growth of the research sector in China, but at the  same time, the growth in higher degree students would help to  sustain Australia’s largest education market.

Government, business, educational institutions, research bodies and  individuals all have a role to play to ensure that both Australia and  China benefit from their expanding relationship.

There are many exciting science and education opportunities to be  realised and immense potential for growth.

The business world, academics and scientists are building a common  future for Australia and China.

This future can only be brighter when it is enriched with the wisdom  and insight of our social and cultural traditions.

And thus it is fitting that we meet here in Perth at the Confucius  Institute.



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