CHINA VISIT

Ms FOX (Bright) (14:20): Can the Premier advise the house about the nature and purpose of his visit to China?

The Hon. M.D. RANN (Ramsay—Premier, Minister for Economic Development, Minister for Social Inclusion, Minister for the Arts, Minister for Sustainability and Climate Change) (14:20): This morning I returned from a week-long trade and investment mission in China that also involved a number of South Australian businesses, the South Australian Chamber of Mines and Energy, the Chinese Chamber of Commerce, and the China Cluster. I visited the cities of Beijing, Shanghai, Hengdian, Hangzhou and Hong Kong, as well Jinan, the capital of our sister province Shandong.

The overwhelming conclusion from the mission is the undoubted dominant importance of the relationship between South Australia and China in economic terms. In fact, China will be the key factor in South Australia's future prosperity, with the relationship involving Chinese investment through joint venture arrangements in mining activities and potential mineral processing, property development, business migration, wine and agricultural exports, higher education, trade and skills training, professional services and tourism.

Members interjecting:

The Hon. M.D. RANN: I hear the sneers of members opposite. We were able to tell the leaders of China that South Australia has 50 per cent of the world's known uranium, because China—in order to combat CO₂ emissions—wants to massively expand its peaceful nuclear power program. They want a stable and secure source of uranium.

Ms Chapman: You want to sell it to them.

The Hon. M.D. RANN: You don't want to sell it to them? You don't want to? That is very interesting, because let us remember the difference between us and the other side when it comes to mining. There has been a tenfold increase in mining exploration since we have been elected. A tenfold increase, including multibillions of dollars worth of mines. There were four mines when you were in power; now there are 10, with another 20 in the pipeline, including the expansion of the world's biggest uranium mine, with a bigger output from one mine of uranium than all the Canadian mines put together—and Canada is currently the world's biggest supplier. Of course, let us—

Ms Chapman interjecting:

The Hon. M.D. RANN: You don't believe in the Fraser Institute. Let me give you the Fraser Institute figures. It used to be about 36 out of 68 jurisdictions in the world in terms of mining future—now fourth in the world ahead of Western Australia. Just in case you missed it; there was another worldwide survey in the past week about which are the best jurisdictions in the world in which to do business in mining? Who is the least risky to do business with? No. 1 was Finland, No. 2 was South Australia, and I think Western Australia was about 14^th and it received prominence in both the national and the international press. That is the difference between us and them: a real mining future. Because what you see in our desert are mirages in the desert; what we see is future jobs for South Australians, tens of thousands of jobs.

The other interesting thing about China, of course, is that it is a major supplier of students to our universities. Education is now our fourth biggest export. When they were in power, when Martin Hamilton-Smith, the Leader of the Opposition, sat around that cabinet table, how dismal did South Australia rate in terms of the number of overseas students studying here? About eight years ago I think there were about six and a half thousand students; next year there will be 28,000 students studying in South Australia.

I guess, again, that is because you don't get things like that by sitting on your backside and hoping that it will come. It is a competitive world. We know what the Leader of the Opposition's refrain is: let market forces reign. You know, I am waiting for the next person who says that to me. I have had it preached to me for years: let market forces reign. Let the market decide. Well, we have seen what they have done in Wall Street. Let the market prevail until you need the taxpayer—honest and decent working men and women—to bail them out of their trouble while they collect their $100 million dollar payouts, because what we have seen in Wall Street is where greed and fear collide. And this is the response.

It is the policies that you advocated when you were in government. The purpose of my visit was to consolidate the existing relationship we have with Chinese businesses and the Chinese government, and to promote South Australia as a destination for investment and migration. During my visit I was able to meet with key decision makers at the central and provincial level of government. I am very pleased that we had access to the highest level of government and business in China.

If people do not think it is important to meet with government leaders and party leaders in China, then they have not a clue about how the system works there. I met with, of course, Mr Li Yuancho (you would never have heard of him), Politburo member of the Chinese Central Committee. In a very frank meeting, Mr Li informed us of China's exposure to US treasury bonds—apparently hundreds of billions of dollars of exposure to treasury bonds—and the financial turbulence now gripping the global economy. As part of China's response to the crisis (and he spoke about their enormous reserves and the strength of their economy), the minister spoke of China's interest in further broadening its investment base to include Australian and South Australian mining projects with positive long-term economic outlooks.

That is because the Chinese leadership see their economy, which is strong, and the Australian economy, whose fundamentals are strong, to be perfectly aligned. And, yes, uranium was raised in every single trip.

Ms Chapman: What did you say?

The Hon. M.D. RANN: I said that we strongly support the export of uranium to countries that have signed the treaty; and, of course, China qualifies for that. We strongly support uranium exports to China.

Members interjecting:

The SPEAKER: Order!

The Hon. M.D. RANN: I held a separate meeting with minister Wang Jiarui of the Chinese Communist Party International Department and his Vice Minister. I also met with the Vice Minister of the Chinese Minister of Environment Protection of the Central Government and the Vice Governor of Shandong, amongst others.

The importance of South Australia's relationship with China cannot be underestimated. Last year the number of students from China coming to South Australian educational institutions grew by 19 per cent. Since we have been in government there has been a 15 to 20 per cent growth each year. Of course, the relationship is particularly important given recent global financial events and the potential downside risk to growth for some of our other trading partners.

South Australia and China enjoy a relationship of bilateral trade and also social and cultural exchange, which benefits both communities. In the last financial year, two-way trade between China and South Australia was worth $1.8 billion. China is currently South Australia's third largest export market with exports to the value of $891 million as of August this year. It will eventually be our biggest export market because of the growth in mineral production in this state. Of course, China is also an important source of funding for projects—not just buying minerals—in the mining sector.

While I was in China I met with a number of leading corporations to discuss the range of other gold, uranium, copper and iron ore projects likely to come into production in South Australia in the near term. Some of these projects are already backed by investment from China, including agreements between Tonghua Iron and Steel Mining and IMX Resources to process exports from Cairn Hill. Sinosteel's partnership with Pepinnini to develop the Crocker Well uranium deposit is another important development. This operation is likely to export between $100 million and $200 million of uranium per year from South Australia. From my meetings with Sinosteel and other corporations, I am pleased to report that the outlook for growing Chinese investment in our resources sector is very positive.

We were also there seeking business migration to our state. I would mention that China is the largest source of overseas students in South Australia, with 8,048 students from China studying in South Australia in July this year. In 2006-07, 1,078 permanent migrants arrived from China to South Australia, 410 of whom were business migrants and their families. Such migrants contribute significantly to the economic future of our state.

It was also good to see the signing of an agreement between Mario Andreacchio and AMPCO Films in South Australia and China's Salon Films to produce three feature films jointly in China and South Australia.