Cables from post

1 December 2016

Dispatches from Australia's global diplomatic network

From Berlin: Australia now, celebrating Australia in Germany 2017

The Australian Embassy in Berlin, in close collaboration with DFAT Canberra, will host a year-long celebration of Australian culture and innovation in Germany in 2017. Australia now will promote Australia's creative excellence and diversity, highlighting our world-class business, science, tourism, education and research sectors, as well as Australian artists' depiction of our rich cultural heritage. Opportunities for collaboration and networking with local entrepreneurs and businesses will be a major part of the program. Australian businesses are invited to become partners of Australia now and help deliver a dynamic festival that will engage German audiences, reach valued stakeholders and develop future networks. The program will be rolled out to Germany's best cultural venues in Berlin, Munich, Frankfurt and Hamburg from February to November 2017. The cultural diplomacy initiative Australia now offers a wide range of sponsorship opportunities for Australian stakeholders. Sponsorship packages range from platinum to bronze and include benefits such as speaking opportunities, invitations to official functions and merchandising rights at particular events. Package benefits can be tailored to suit sponsors' specific interests and requirements. More information and the Australia now partnership invitation is available for download on the DFAT website

Australia Now book cover

From Seoul: Opportunities in innovation

Both the Korean and Australian Governments place a high priority on innovation policy. Harnessing these common interests, the Australian Embassy in Seoul held a Australia-Korea Innovation and Collaboration in the FTA Era symposium in September with the University of Technology Sydney. The symposium provided a platform to promote each Government's innovation agenda, and to highlight new opportunities for business under the Korea-Australia Free Trade Agreement. The symposium focused on three areas: Innovation in Agriculture, Medical Technology and ICT. Australian guest speakers presented on innovation in dairy farming and greenhouse horticulture, and Australia's vibrant medtech industry's innovation ecosystem. Korean guest speakers presented on smart farming and the potential value of using common insects for food, Korea's biomedical landscape and the concept of smart healthcare. Leading Australian and Korean ICT providers presented on a variety of innovative business plans including cloud computing, the Internet of Things and big data services. The symposium was supported by the Australia-Korea Foundation and the Australian Chamber of Commerce in Korea. Information, fact sheets and guides for business interested in learning more about the advantages of KAFTA are available at the DFAT FTA website.

From Beijing: China's new filing system eases the burden on foreign investors

China remains a complex market for foreign investors, but the Chinese Government is taking steps to relax restrictions for foreign investment. Since 1 October, approval from the Ministry of Commerce is no longer required for the establishment of foreign invested enterprises so long as the business scope of the FIE does not fall under a yet to be issued nationwide negative list. Instead, FIEs will only have a filing obligation. There is no formal timetable for publishing and bringing into effect the nationwide negative list. Until then, the Catalogue for the Guidance of Foreign Investment Industries, which divides investment into 'encouraged', 'restricted' and 'prohibited' sectors, will stand in the place of the negative list. The new filing measures are expected to ease the administrative burden for FIEs, and are a positive development for foreign investors.

From Tokyo: Abe's "Womenomics" and labour supply

Labour reform is an integral part of Japan's key economic and social policy objectives. Japan hopes to raise its potential growth rate, slow the rate of population decline, prepare for a fast-ageing society, stem low birth rates and alleviate acute labour shortages. A top priority is the reform of out-dated work practices and legislation to address chronic labour shortages, as a means to help alleviate these trends and increase economic growth. One focus is increasing the workforce participation of non-employed and under-employed women. Prime Minister Abe has dedicated political muscle to the issue by creating a new cabinet position tasked with Promoting Dynamic Engagement of All Citizens, Working-style Reform, Women's Empowerment, and addressing Measures for Declining Birth Rate and Gender Equality. Meaningful reform in Japan will require legislative amendments and cultural changes in most workplaces, including offering more opportunities for part-time work and addressing access to child care. Some businesses are introducing adjustments to traditional pay scales to recruit and retain new staff.

From Bangkok: Supporting an angel investor network in the Mekong

Prime Minister Malcolm Turnbull launched the Laos chapter of a new network of angel investors supporting startups in the Mekong region. The Mekong Angel Investor Network connects international and regional investors to start-ups and entrepreneurs in emerging ASEAN markets – Cambodia, Lao PDR, Myanmar, and Vietnam. Supported by the Australian-funded Mekong Business Initiative, the Network brings investment capital and business advice to help entrepreneurs kick-start their ideas. The aim is for the Network to support at least 60 companies across the region, with half of those owned and/or operated by women. So far, successful business pitches have included a new online bus ticket booking platform in Cambodia and a women-led food cart business in Ho Chi Minh City. The Network is on its third tour of the Mekong and will be visiting Phnom Penh, Siem Reap, Ho Chi Minh City, and for the first time, Yangon.

From Nairobi: Mixed signals on local content and ownership

Proposed and actual amendments to Kenyan legislation and regulations are sending mixed signals for local content and ownership requirements for foreign investments in Kenya. The changes come amidst debate in Kenya about ensuring its people benefit from its natural resources, build local capacity and become more globally competitive. On 1 August 2016, the National Construction Authority moved that new infrastructure projects from foreign contractors will not be registered unless they meet the minimum 30 per cent local ownership requirement. The new regulations are designed to facilitate local contractors' participation in major projects. The 30 per cent local ownership requirement echoes a plan by the Senate Energy Committee to introduce a 'Local Content' Bill which will force foreign companies in the extractives sector to divest holdings to locals. The draft Bill also requires foreign companies in extractives to procure a certain percentage of locally produced goods and services in the community where the activity is taking place. However, the Kenyan Government has repealed a recently enacted provision in the Companies Act requiring 30 per cent local shareholding with effect from January 1, 2017. Australian businesses in Kenya are welcome to contact Austrade at the Australian High Commission in Nairobi for further advice at Brenda.Wabule@austrade.gov.au.

From Taipei: Renewables - eight focus areas for cooperation

Taiwan is more open than ever to collaboration and investment that will facilitate the transition towards cleaner, low emissions energy sources. The Democratic Progressive Party Government has committed to a 50 per cent reduction in its greenhouse gas emissions by 2050 based on its 2005 emissions profile. This GHG reduction commitment is ambitious, as fossil fuels currently contribute over 89 per cent of Taiwan's GHG emissions. The Government's retirement of its nuclear power plants by 2025 is spurring on the electricity sector to scale up alternate power generation sources and reduce emissions through renewables, energy efficiency and carbon capture and storage. Australia and Taiwan's over two decade long history of collaboration on energy and minerals formed the backdrop to the 21st Joint Energy and Minerals Trade and Investment Cooperation Consultations in September. An Action Plan agreed at the meeting identifies eight areas of interest to Taiwan: information on LNG and mine investment opportunities, carbon capture and storage technology and knowledge sharing, solar technology R & D and demonstration sites, LED lighting testing methodologies, biofuels and bio products from agricultural waste, clean energy precincts development and community education on energy system changes. In October Macquarie Group, a global company with headquarters in Australia, signed a Letter of Intent with Taiwan's Ministry of Economic Affairs to explore and collaborate with local companies on renewable energy infrastructure development in Taiwan.

From Jakarta: Update on AANZFTA-wide regional certification

Indonesia's Parliament has commenced outreach with its business community to bring it into line with Australia, New Zealand and the other ASEAN states to update the regional free trade agreement of which it is a member – the ASEAN-Australia-New Zealand Free Trade Agreement. The 12 parties signed AANZFTA in 2009 and in 2015 it was amended through a process called the First Protocol to Amend AANZFTA. Indonesia is the only one of the 12 AANZFTA parties yet to ratify the First Protocol – which, among other updates, amends requirements relating to certificates of origin. This has implications for the business community in the region who use the certificates to benefit from the preferential tariff rates offered under AANZFTA. Indonesia has foreshadowed it is seeking to finalise the ratification process of the First Protocol by the end of this year. The First Protocol will enter into force for Indonesia as soon as it notifies the other Parties it has completed its domestic requirements. The First Protocol entered into force in October 2015 for 10 Parties, including Australia, and in January 2016 for Cambodia. On 1 July 2016, 11 AANZFTA Parties moved to a new Certificate of Origin and Operational Certification Procedures. Indonesia continues to require old Certificates of Origin and Operational Certification Procedures, creating a situation where traders have different administrative requirements for trading among AANZFTA parties. Consistent documentation and procedures will ease the burden on businesses seeking to tap into international supply chains in this dynamic region. 

From Port Louis: Mauritius, developing the Blue Economy

The Republic of Mauritius, an Indian Ocean island state, has developed into a regional hub and business gateway to Africa. In the Blue Economy sphere, the Mauritius Government Program 2015 aims to transform Mauritius into an ocean state, with the ocean economy as one of the main pillars of development.  Mauritius has a total marine zone of 2.3 million square kilometres, with an EEZ of 1.96 million square kilometres.  One of the Mauritian Government's priorities is toward Mauritius becoming a high value-added services economy in this sector, as a regional platform for marine finance, marine ICT, ship registration and marine biotechnology.  Mauritius has developed a freeport as a trading and logistics platform and has preferential market access for its seafood products into the European and US markets, as well as concessional or duty free access among the 19 fellow Common Market for Eastern and Southern Africa member states and Southern African Development Community countries, where products meet the rules of origin criteria. Perth‑based Austral Fisheries base their four-vessel Southern Indian Ocean fishing fleet at the Mauritius Freeport. Mauritius has identified business potential in container trans-shipment, cruise travelling, port services and bunkering. Opportunities also exist for Australian businesses in fish farming and high value marine aquaculture and in coral reef rehabilitation.  The Ministry of Fisheries' Aquaculture Master Plan provides a pre-approved list of species for lagoon and offshore lagoon cage culture, inland aquaculture farms and tuna ranching. Mauritius was the top-ranked African country in the 2016 World Bank Ease of Doing Business Report, and Africa's most competitive economy in the World Economic Forum's 2015-16 Report, having risen over twenty places in the latter over the last seven years.

Mauritius. Photo by: Nishan Joomun

From Beijing: China's E-Health Industry – The Next Big Thing?

China has identified "healthcare big data" as a strategic national resource. Development of the e-health big data industry has the potential to transform healthcare in China and generate significant economic opportunities in the health, medical, aged care, computing and data storage industries. China's grand vision is to consolidate all of its national and provincial health data into a single national database by 2020. Optional wearable devices will provide health-related data directly to a data cloud. A prominent role is envisaged for the private sector in developing new healthcare-related services and technologies, with home-based health information services, online pharmaceutical services, aged-care health consultations, and health-focused sports, fitness and diet-related applications. The Chinese Government has called for the development of intelligent, digital healthcare devices and signalled support will be provided for research and development in health-related artificial intelligence, biological 3-D printing, clinical robotics, rehabilitation equipment, wearable devices and micro sensors. The basic technologies to develop the e-health sector already exist and infrastructure is being built. China already leads the world in supercomputing capacity and now that e-health has been designated for priority development, businesses are expected to channel significant new investment into the sector. Australian firms that thrive on fierce competition and have world class capabilities could benefit from this ambitious agenda to exploit healthcare big data to deliver better national health and aged care services.

From Wellington: Trade policy strategy refresh

New Zealand has commenced its first major trade policy review in 20 years. The review is focused on four broad 'shifts' to increase international opportunities available to its domestic businesses and contribute to the Government's goal to lift the share of exports to 40 per cent of GDP by 2025. The four shifts that may form part of the refreshed trade policy are: achieving a balance between FTA negotiations and making the most of existing agreements; dedicating more resources to reducing non-tariff barriers; increasing focus on services; and engaging more with its home grown businesses to help them compete successfully offshore. New Zealand businesses to date have been broadly supportive of these shifts. The high-level strategy refresh is likely to see Australia's sixth-largest two way trading partner looking more closely at the implementation of opportunities in its myriad of FTAs, which including those it wishes to conclude in the future, could grow to cover approximately 90 per cent of its exports. As the largest contributor to New Zealand's GDP, a renewed focus on the services sector could deliver positive economic benefits not only to the New Zealand economy, but also across the Tasman, as Australia is New Zealand's number one destination for services exports.

From Lima: A growing demand for water

Peru is the only Latin American country that is expected to experience water stress or shortages by 2025. Increased demand driven by economic growth, greater urbanisation in the arid Pacific coastal area and loss of glaciers from climate warming all contribute to this outlook. Currently, four million Peruvians lack access to water services and only three out of every 100 rural homes have a secure water supply. Newly-elected President Pedro Pablo Kuczynski has taken up the water challenge as a key priority. His Government has set policy targets of delivering clean potable water to all Peruvian urban households as well as proper waste water and sewage treatment for all by 2021. In order to achieve this goal, the Government is planning to invest around US$5 billion in projects to expand and upgrade water and sewage networks, mostly implemented through co-financed PPP schemes. This builds upon the previous government's investment in the supply of urban potable water and sewage services under the National Sanitation Plan 2014-2021 at a cost of US$18.7 billion. Australia has strong capabilities, water technologies and services that match Peru's needs, including in the key areas of irrigation efficiency, dry-land agriculture, drought management, water storage and storm water harvesting, urban and remote community water supply and sewage solutions, water for environmental needs, efficient mineral processing, and others. The Australian Embassy in Lima is working closely with stakeholders to showcase Australian best practice and assist Australian companies to enter the Peruvian market. 

Lima District, Peru. Photo by: Ashim D'Silva

From Pretoria: Tapping into an expanding middle-class

South Africa has always boasted Africa's most sophisticated economy. Despite anaemic growth, it has also regained the mantle of being Africa's largest economy. With a strong finance sector, including a stock exchange judged the world's best from 2011-15, it remains a competitive base for Australian investors willing to accept some risk to tap into Africa's growing middle class, and population expansion in a continent expected to reach 2.7 billion by 2050. In addition to Australia's historic strengths in mining, equipment, technology and services, the high disposable income of South Africa's middle class provides potential for Australian investment in sectors where we have a competitive advantage, including education, retail and professional services. The Disrupt Africa African Tech Startups Funding Report found that South Africa was Africa's favoured destination in 2015 for startups in renewable energy and financial technology - innovative financial technology services are a key area where Australian providers are growing in Africa. Opportunities also exist in energy, with South Africa's Independent Power Producers Programme unlocking significant private sector participation in the domestic electricity market with plans to source up to 6GW of new renewable energy. Potential may also exist for Australia's building and construction sector to participate in urban renewal projects, including inner-city apartment construction.


Last Updated: 1 December 2016