Capitalising on their proximity to Asia, Brisbane and Darwin are rolling out their Asian “Welcome” mats as Sydney woos China’s wealthy, says Chris Pritchard

How do you fly from Australia to an Asian capital in just over an hour? My Australian friends, who frequently travel on business, react rather smugly whenever I pose this question. “It can’t be done,” they say, rolling their eyes heavenward and half-expecting me to deliver a lecture on some futuristic, currently unavailable, mode of transport.
Australians – whose mindsets are mostly lodged firmly in their country’s south – expect to spend between seven and 10 hours reaching an Asian capital depending on their location and typically overlook Darwin, the Northern Territory’s capital, which sits on Asia’s doorstep.

Flights from Darwin to Dili, the capital of East Timor, take just 70 minutes. What’s more, Darwin residents can fly to Denpasar, the biggest city on the Indonesian isle of Bali and one of Australia’s top holiday destinations in only 150 minutes – less time than it takes to fly to Sydney.

Australia’s recent mining boom has demonstrated that the country’s prosperity is inextricably linked to that of Asia, and demand for Australian raw materials such as iron ore remains strong from its Asian neighbours. Ian Streeter, recently retired chairman of major mining company Fox Resources and an observer of export markets, maintains demand from China’s steel mills for Australia’s coking coal will continue to be healthy for many years. Fox Resources evidently agrees as it has bought 17 coking coal tenements from US-based multinational Cliffs Natural Resources.
New mining and natural gas projects are going ahead, but at a steadier and less frenetic pace than five years ago. One of the biggest of these is in waters 500 km north of Western Australia’s Broome, where Shell’s US$10.8 billion Prelude platform – a considerable 500 metres long that is currently being built at a Samsung shipyard in South Korea – will anchor gas production scheduled to begin by late 2017.

Major export

Australia’s main two-way trading partners are China, Japan, the US and South Korea respectively. The country valued its exports to East Asia – encompassing the major trading partners of China, Japan and South Korea – at A$73 billion (US$65 billion) in 2011, a 47.5 per cent increase on the previous year, which officials attribute mainly to earnings flowing in from mineral exports. Iron ore is Australia’s top export, followed by coal, gold, wheat and beef.
Education is another a major export, with around 250,000 foreign students, mostly from Asia, enrolled at Australia’s 41 universities and numerous colleges. Academic authorities identify a benefit in addition to the revenue earned: these students will be tomorrow’s decision-makers in their countries and it is therefore important that they take home a positive view of Australia. Tourism, the other major service industry export Down Under, also depends heavily on Asian custom, with China recently overtaking New Zealand as the country’s largest single source of visitors.

Geographical advantage

The two major Australian cities closest to Asia make much of their proximity: Darwin, capital of the Northern Territory, is closer to the continent but Queensland’s state capital, Brisbane, is much larger with superior infrastructure and facilities.

“In the case of Darwin, proximity to Asia is extremely important – and something we emphasise,” says Greg Bicknell, chief executive of the Darwin-headquartered Chamber of Commerce Northern Territory. While acknowledging that some companies will inevitably opt for Brisbane rather than Darwin as Asia-Pacific regional headquarters prefer to use its larger port for exports, he argues that being closer to Asia will work in Darwin’s favour long term. “We’re closest to Asian destinations – it’s as simple as that,” Bicknell adds.

Darwin, Australia

Aerial view of Darwin, Australia

Darwin is often described as Australia’s most cosmopolitan city as it’s home to people from more than 60 nationalities and 70 ethnic backgrounds. This multiculturalism is immediately evident at the suburban Parap Markets on a Saturday morning, where mouth watering aromas of Chinese, Indonesian, Filipino and Thai cuisine mingle with the smell of East Timorese coffee, and Asian-run stalls are heaped high with Northern Territory fruits, fabric and clothing. Some stalls offer cut-price electronics from China, while others sell arts and crafts created by “Territorians”, as residents of the “NT” or “Top End” call themselves. At this cheery, easygoing melting pot, I meet a local politician that tells me, over an Indian snack, that local Bahasa Indonesian lessons are popular in Darwin’s schools.

Darwin, with only 130,000 people – of whom one in 10 describes themselves as Asian – looks and feels bigger than it is. But it’s a small city rather than a big town. One consequence of Darwin’s lack of suburban sprawl is that visitors are able to drive for less than 10 minutes before finding themselves on the edge of the Northern Territory’s vast ochre outback, a place of wide open spaces but few people. But there are also places to meet for business: running along the edge of the harbour of a compact, modern city ideal for on-foot exploration, the Esplanade houses several leading hotels including Doubletree by Hilton and Mantra on the Esplanade.

Queensland state premier Campbell Newman and Northern Territory chief minister Adam Giles both recently returned from separate Asian trade missions. According to Giles, “Relationships between the Northern Territory and the countries [of Asia] are stronger than they’ve ever been”.

Queensland’s Newman is similarly upbeat, pointing to a 32 per cent surge in the number of visitors from China in 2013 over the previous year. “We’ve taken steps towards persuading airlines to expand their services to our state,” he says. “China is Queensland’s largest single trading partner and we see great potential for Chinese investment to drive some of the major projects that Queensland needs. It’s win-win: China needs a reliable source of high-quality products and we require the investment dollars to help drive projects. As the Chinese juggernaut continues and Japan shows signs of resurgence, there are realistic expectations of a prolonged period of sustained growth.”

Newman also admits surprise at the high level of interest expressed in Queensland’s education and training sector during his Asian visit and promises that the region will capitalise on this demand for high-quality tertiary education.

Brisbane lord mayor Graham Quirk says that while the Queensland capital already enjoys strong business and trade ties with Asia, it now intends to leverage on, “Brisbane’s reputation as a trailblazer… and our expertise in areas such as research, resources, innovation and education.”

G20 for Brisbane

In a further boost for the city, Brisbane will host the G20 summit this November. Nick Behrens, general manager for advocacy at Queensland’s Brisbane-based Chamber of Commerce and Industry, says, “The Asian Century is shifting the focus of economic development from west to east – and Queensland has an opportunity to play a major role and benefit significantly. The Queensland business community, ahead of the 2014 G20 summit, is ready and willing to play a larger role in servicing Asian markets.” As Ian Klug, chairman of [economic development unit] Brisbane Marketing, observes, “We’re the closest Australian state capital city on the eastern seaboard to Asia, and Brisbane offers an innovative and diverse business environment, a highly-skilled workforce, excellent infrastructure, world-class educational facilities and a safe,
clean environment.

The Wheel of Brisbane

The Wheel of Brisbane

”To illustrate the city’s proliferation of Asian residents, Klug points out that Mandarin and Cantonese respectively are the most spoken languages in Brisbane after English.
Analysts say Brisbane, as the much larger city, has the edge over Darwin when the size of a skilled workforce is measured. But some in the Darwin business community echo Klug’s sentiments that, while Darwin is not a state capital or on Australia’s eastern seaboard, it’s certainly closer to Asia than Brisbane.
Still, rather than compete head-on with Brisbane, Darwin’s business sector focuses most heavily on links with its nearest neighbours in Southeast Asia – particularly Indonesia, East Timor and the Philippines. A commonly heard view is that links with China, Japan and South Korea will become closer as mining and gas exports to those countries increase. The Chamber of Commerce Northern Territory’s Bicknell notes that delegations of East Timorese and Indonesians recently passed through Darwin looking for business opportunities as an example of intensified Asian interest.
Aside from minerals, exports from Darwin include agricultural products and services.  “People in nearby countries often source experts based in Darwin. These mostly go to Indonesia and East Timor but some have also gone to the Philippines and Vietnam. Expertise in soil, water and tourism are just three examples of their know-how. We’re tropical and our closest neighbours are similarly tropical – it’s something that we have in common.”

As Darwin and Brisbane race to lock in more Asian business, nowhere is competition more intense than between its two ports. The Port of Darwin puts the spotlight on its “strategic position” close to Asia, solid rail links with Adelaide and status as Australia’s largest facility for exporting live cattle. These animals go to various Asian destinations to be fattened and slaughtered, with Indonesia the leading customer. Industry expectations are that a market for live cattle will open up in China within a few years.

The larger Port of Brisbane, meanwhile, observes that it serviced close to 2,500 ships in 2013 and handled more than US$45.5 billion worth of trade, most of which was to and from Asia.
Both ports handle similar portfolios of products, and while large shipments of minerals leaving Brisbane and Darwin receive the greatest publicity, the two cities also emphasise the importance of other exports – including food, and Australia’s ambition to be the “food bowl of Asia” is often mentioned.

Ross Muir, former director of the Northern Territory government’s growth planning unit, believes the rail link to Adelaide, 3,027 km south of Darwin, has made the city a trade focal point, and he additionally foresees the need for a larger port within a decade.

Keeping it Sydney side

Despite the growing importance of Brisbane and Darwin in Asia, many critical commercial decisions are still made in the major southern cities of Sydney, Melbourne and Perth. Sydney remains Australia’s biggest city with 4.5 million of the nation’s 22.7 million people, and Australia’s most recent census reveals that 18.9 per cent of Sydney residents – a larger proportion than anywhere else in the country – claim Asian ancestry.

Sydney is also Australia’s most expensive city with the country’s highest property prices – but this hasn’t discouraged wealthy Chinese from investing. Indeed, China interest in Sydney properties has never been higher. Bill Bridges, a veteran agent at Sydney’s Ballard Property, says this is the first time he’s witnessed such a high level of interest from Chinese potential buyers, citing at least five on his books who are mulling purchases with price tags between US$13 million and US$36 million. “They want land and they want houses to be new,” says Bridges, adding that Chinese buyers also ask how close properties are to the best private schools while the presence of a large Asian community is viewed as a relocation plus. Sydney is also intent on improving its air links to and from China, and welcomed a new twice-weekly direct service from Chongqing by Sichuan Airlines last December.

In addition to minerals, natural gas, agribusiness exports, tourism, education and real estate, lesser exports are thriving, too. Asian consumers, for example, are increasingly opting for vegetables grown in Australia. Research, development and marketing organisation Horticulture Australia states that the value of vegetable exports to Indonesia almost doubled between 2008 and 2012, from US$5.5 million to just over US$10 million. Nevertheless, Mike Keogh, executive director of the Australian Farm Institute, believes sales of fresh produce to Asian markets should be even larger. “To meet growing consumer demand, China is likely to increase agricultural imports over the next decade, and Australia should take greater advantage of this,” he says.

Whether it’s Darwin and Brisbane’s burgeoning exports to Asia or Sydney’s attractive real estate, Australia’s future is inescapably intertwined with that of its Asian neighbours.

Australia-Asia Air links

Darwin International Airport has direct flights to Kuala Lumpur, Manila, East Timor’s Dili, Denpasar in Bali, and Singapore. Asian airlines serving the city include Airasia, Silkair, Malaysia Airlines, Singapore Airlines and Philippine Airlines.

From Brisbane Airport, there are direct flights to Bangkok, Singapore, Kuala Lumpur, Denpasar, Hong Kong, Seoul, Guangzhou and Taipei. Asian airlines serving the facility include Air China, Cathay Pacific, China Airlines, China Eastern Airlines, China Southern Airlines, Eva Airways, Garuda Indonesia, Jet Airways, Korean Air, Malaysia Airlines, Philippine Airlines, Singapore Airlines, Thai Airways and Tiger Airways.