The Hon. A.L. McLACHLAN ( 15:36 ): Last year marked the 30th anniversary of South Australia’s sister state relationship with Shandong province and the 15th anniversary of the sister city relationship with Qingdao, a city located within Shandong. To coincide with this occasion in April last year, more than 300 delegates, encompassing 119 individual businesses, attended the state’s trade delegation to Shandong.
One of the delegates who attended the trade mission was Mr David White, director of the University of Adelaide’s International Centre for Financial Services (ICFS). As I have mentioned previously in this place, before I was elected I was the director of the University of Adelaide’s ICFS. The ICFS was established to foster excellence in, and improved understanding of, the financial services industry by providing research, study opportunities and industry engagement. The ICFS is also a leading provider of self-managed superannuation funds (SMSF) courses. One course that is currently offered is the SMSF Retirement Essentials Course, a joint venture between the firm Accurium and the ICFS, which explores the financial risk of retirement and offers strategies to financial advisers to increase their clients’ wealth.
In February 2014, China’s state council approved the building of a financial zone in Qingdao, known as the Qingdao Wealth Management Financial Comprehensive Reform Pilot Zone. The Jinjialing financial zone is currently under construction. The financial zone now contains 360 firms. Since the creation of the pilot zone, cross-border borrowing has been made possible. Many South Korean banks have been able to establish themselves in Qingdao by offering low-interest loans to Chinese companies. In September last year, China was offering interest rates of 4.5 per cent, whereas South Korean banks were offering interest rates between 3.8 and 4 per cent.
Some of the policies that the government of Qingdao have adopted include mortgage plans to benefit small and medium-sized high-tech companies with loan financing, pilot programs for qualified and domestic partners, allowing overseas investors to convert foreign currencies into yuan for private equity investments in China and raising funds for overseas investments.
In the Global Financial Centres Index September 2016 edition, Qingdao was listed as 46 in the financial centre rankings. However, it is on the rise and was listed as number 2 in the financial centres likely to become more significant in the next few years. In 2015, Qingdao’s GDP per capita was $15,600 and the city has received more than $60 billion in foreign direct investments since the 1970s.
Subsequent to the delegation, further meetings occurred between ICFS and the universities located in Qingdao: the Ocean University of China, Qingdao University and Shanghai University of Finance and Economics. These meetings were to discuss future research and educational collaborations between the organisations. The Ocean University of China and Shanghai University of Finance and Economics have indicated that they wish to collaborate in forming coeducation programs with the ICFS. This collaboration will assist Qingdao to further develop into a successful financial district in the future and will also be beneficial for Adelaide students and academic staff. ICFS will be completing a study tour this year in order to build on the progress that has been achieved so far between the universities.
One of the key financial areas Adelaide can assist Qingdao to develop is financial services for an ageing population. Currently, China’s population of those over 60 has reached over 200 million. This represents 15.5 per cent of China’s population. By 2050, this number is predicted to increase to over 300 million people or more than 20 per cent of China’s population. In Australia, those aged 65 and over currently represent 15.3 per cent of our population. By 2040, it is predicted this age bracket will represent 20 per cent of the Australian population.
As I have mentioned, ICFS is a specialist in SMSFs. While in Qingdao, Mr White discussed success in Australia with the Qingdao Financial Affairs Office. It is vital that a financial solution is established to cater for the increasing ageing population in China. Hopefully, the ICFS can assist in making a contribution to this area.
I acknowledge the work of the ICFS in pursuing these international opportunities that will benefit both Adelaide, the state of South Australia, as well as the citizens of Qingdao. I also acknowledge the University of Adelaide’s Business School for engaging with Qingdao on a global stage. I wish them every success in this endeavour. I congratulate the university on this initiative.See full session on Hansard