Australia’s highest government tourism body has signed a memorandum of understanding with China’s UnionPay in a bid to encourage Chinese tourist spending. Trade Minister Steven Ciobo announced the deal on Monday.
UnionPay is China’s, and the world’s, largest card payment firm, and its credit and debit cards are accepted in 162 countries and regions.
It is unclear exactly how cooperation between UnionPay and the government of Australia will take shape. However, the move is nonetheless significant because of the direct cooperation of a major Western government with a Chinese firm.
Australia, perhaps more than any other major Western nation, is dependent on Chinese spending, and this recent MoU illustrates Canberra’s commitment to expanding and encouraging Australia’s economic ties to China through tourism.
Chinese tourism is on track to become Australia’s No 1 source market in the near future, surpassing New Zealand. According to Ciobo, 1.2 million Chinese tourists traveled to Australia in 2016, and this is predicted to double by 2020. Moreover, tourism GDP in Australia is growing much faster than the country’s overall gross domestic product.
Of course, tourism is not the only economic tie Australia has to China. It is a popular source of a variety of luxury goods and services for Chinese consumers. The Australian wine industry is experiencing rapid growth in demand, largely because of Chinese consumers. Overall, Australia’s agricultural products, including dairy, are seeing growing demand driven by the Chinese economy.
Other popular Australian offerings in China include more non-traditional “luxury” goods such as higher education and, potentially, healthcare.
According to “QS World University Rankings”, tuition for international bachelor’s degree students in Australia is typically around US$12,000. While not especially high compared with costs in the US at both private universities and for out-of-state students at public universities, that is still exponentially higher than average tuition at top Chinese universities. For a Chinese student at Peking University, the country’s most prestigious, tuition fees are between 5,000 and 5,300 yuan (about $760 to $800).
This is not even factoring in the extremely high cost of living in Australia.
All in all, studying at a Chinese university is in and of itself a luxury reserved for only China’s most wealthy.
By signing this MoU with UnionPay, Canberra is communicating to Chinese firms and tourists of all kinds that it is committed to facilitating Chinese spending in Australia on all types of luxury goods and services.
This article was originally published on Jing Travel.