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Prime Minister Malcolm Turnbull and Chinese Premier Li Keqiang have unveiled an unprecedented $100 million innovation partnership that will deliver a major boost in research and development funding for Australian research through a new science and technology precinct at the University of New South Wales (UNSW).

Speaking after the Australian and Chinese leaders attended a signing ceremony at the Great Hall of the People in Beijing on Thursday night, UNSW President and Vice-Chancellor Professor Ian Jacobs said: “This partnership is a global first and has the potential to reset the Australia-China bilateral relationship and boost the nation’s innovation system.”

The new Torch Innovation Precinct at UNSW is the first such partnership outside China. It is backed by leading Chinese companies and the Ministry of Science & Technology’s flagship ‘Torch’ high technology industry development program. An initial $30 million investment has been secured by eight Chinese companies to support Australian research, in Australia, in advanced materials, biotechnology, energy, and environmental engineering.

“This is about future proofing our national competitiveness by strategically positioning Australia as China becomes the world’s largest investor in R&D and the 21st century’s science and technology superpower,” Professor Jacobs said.

This is an example of UNSW taking the initiative to put some real momentum behind Australia’s National Innovation and Science Agenda.

Since 1988, China’s Torch program has been successfully collocating Chinese businesses, universities and research organisations in science and technology precincts to drive innovation. The 150 Torch precincts in China now generate some 7% of GDP, 10% of industrial output and 16% of export value. Independent economic modelling by Deloitte Access Economics estimated the new Torch Innovation Precinct at UNSW would add more than $1 billion to Australia’s GDP in the first 10 years alone.

“The Torch partnership is an important milestone in the further development of Sydney as Australia’s global innovation city, and in ensuring that university research generates even greater economic impact and social progress,” Professor Jacobs said.

“This is an example of UNSW proactively taking the initiative to put some real momentum behind Australia’s National Innovation and Science Agenda.”

The first group of UNSW Torch industry partners will initially set up incubator spaces on the Kensington campus in close proximity to researchers and a growing community of student entrepreneurs. Investment is expected to build to $100 million, enabling the construction of a new purpose-built, globally connected UNSW innovation precinct by 2025.

“UNSW has a strong track record of working with industry. Partnerships and collaboration are at the core of the University’s philosophy and govern our approach to creating and disseminating knowledge. The Torch initiative will deliver a truly global platform to build on these strong foundations,” Professor Jacobs said.

“The statistics are staggering. In China, Torch zones are home to over 50,000 tenant companies and invest RMB 347 billion [$A70 billion] in R&D,” said Mr Laurie Pearcey, UNSW’s International Executive Director and former Chief Executive of the Australia China Business Council.

“The OECD forecasts China will overtake the US as the world’s largest investor in R&D by 2019 – this is a major shift in the global knowledge economy and Australia must be strategically positioned.

“As mining investment contracts and commodity prices cool, Australia has an opportunity to leverage its world-class universities, the tens of thousands of Chinese students studying here and our strong links to Asia to meet the challenges of the ideas boom,” Mr Pearcey said.