5. Big Numbers
1.3 billion people
80 million “middle class”
(annual income- RMB60,000 to 500,000)
15 million babies
14 million engineers
33 cities over 2 million
132 Million Internet Users
320 Million Mobile Phone Users
(60 million in Guangdong)
290 000 suicides
150 000 road deaths
170 million unemployed (55 m officially )
6. Small Numbers
•8 Fatalities - Bubonic Plague
•1000 Fatalities – Rabies
•20 million cars
-(estimated 140 million by 2020)
•17 million “University Students”
•120 000 lawyers
•150 000 accountants
7. China – Big Country Big Issues
Regional Vs National priorities
Autonomy and Cohesion
Neighbours and Friends
Losing Control of Information
Development of National Standards
Private Vs State Sector
Conforming to Agreements – WTO
IP and Copyright Issues
Development and Environment
Building a ‘harmonious society”
8. 17 th Party Congress – Themes…
• Climate Change
• Energy – Renewable Energies
• Sustainable Agriculture
9. More Big Issues
Agriculture – still 60% of China’s
population ( 800 million people)
Gap between rich and poor, and coast and
inland
Need 20 million new jobs a year
SOE reform
Environment
Population growth
Energy and Resources
Slowing Growth
Disaster and Security Issues
13. Key Drivers of Growth
Foreign Direct Investment
Urbanisation
Western Development Strategy
North East Revitalisation
“Socialist” New Countryside
Growth of private entrepreneurs
Beijing Olympics/World Expo
Domestic Market
International Markets
WTO/ Bilateral Agreements
14. A Nation of Consumers
Retail sales
US$827 billion (2005)
Rise of 15 % recent years
15. It’s a Dog’s Life - Hidden Markets.
Expenditure RMB 200 per month
12 months per year
Approximately one million dogs in
Beijing
= RMB 2.4 billion
Converted to Australian dollars
AUD 420 million per year !
20. “By 2020, China will be the leading single source of tourists
worldwide and one of the world’s top four tourist destinations”
World Tourism Organisation
120
(outbound travellers – million)
100
80
60
40
20
0
1994 1998 2002 2006 2010 2020
21. The money’s not where you think it will be …
“The rise of China’s 2nd Tier Cities”
2nd Tier 3rd Tier
Qingdao Harbin
Dalian Ningbo
Xian Fuzhou
Chengdu Jinan
Hangzhou Kunming
23. Agribusiness – Hot Topics in China
• “Food Security”
• maintaining supply ( self sufficiency)
• maintaining safety and hygiene
• (Nestle, Kraft, KFC, Haagen-Dazs, Heinz, Mead Johnson)
• “Water Resources”
• 390 billion cubic metres for farming annually
• 1.3 billion people (22 per cent of world's total),
• 9 per cent of the world's arable land (15%/China)
• 6 per cent of the world’s renewable water resources
• “Environment”
• Balancing development
• “Organic and Healthy” – Green Food
• Marketing/Certification/Distribution
24. China confirms Countryside not forgotten
11th Five year Plan 2006 - 2010
• Building a “new socialist countryside”
• US$42 billion earmarked for agriculture, rural
development and farmers this year - increase of
14.18 per cent over last year.
• “We need to implement a policy of getting industry
to support agriculture, and cities to support the
countryside. We need to strengthen support for
agriculture and farmers, and continue to reform
rural systems.” – Wen Jiabao
27. Beijing 2008 – Australia is a major player…
Extensive Australian involvement & profile
30 companies with major contracts
Facility design for:
main stadium, swimming, rowing, sailing, tennis, archery,
hockey, equestrian, shooting, wrestling
Olympics village, Olympic Green
Transport planning, financial & telecommunications services
Engineering, security, sports surfaces, adhesives …
Olympic Torch relay planning, Paralympics
50 further companies bidding or involved in other contracts
Grabbing opportunities as the days count down
Transport planning for VIP fleet
Secure access control systems for temporary venues
Business Club Australia Beijing –
www.businessclubaustralia.com.au
32. Currently Riding “high” – high level visits
Two Way Trade Increasing-$45 billion
ALNG – A$ 25 billion long term deal
Strategic long-term alliances – “Uranium”
Negotiation of Free Trade Agreement
Integrated with Olympic Planning
Recognition of the Importance of Australia
Tourism and Student Numbers Increasing
Broad Business – Mutual Benefit
Major success in “pillar” industries
Ongoing substantial AID Program
water/hiv aids/education
33. •Exports valued at $A20 billion in 2006
(Growth of 26 %)
• Iron ore, $A7.6 billion
•Services exports valued at $A3.3 billion
(growth of 20%)
• Student enrolments 80,000, actual students
49,000 (growth of 18%)
• Short term visitors 285,000
• Stock of Australian DFI in China $A1.2 billion
• Government to Government relationship
critical to commercial outcomes
35. Major China Exports , 2006 (A$m)
•Clothing 3,351 ( Up)
•Computers 2,587 (Up)
•Toys, games &
•Sporting goods 1,355 (Up)
•Telecommunications 1,610 (Up)
36. Total Trade
Merchandise trade with China (2006)
Exports to China (A$m): 20,376 (Up)
Imports from China (A$m): 25,485 (Up)
Total trade (exports + imports) (A$m):
45,862
Merchandise trade deficit with China
(A$m): 5,109 (Down - slightly)
37. Major Australian Sectors
•Commodities / Resources
•Agribusiness / Food / Wine
•Education and Training
•Services
•Tourism – Growing Rapidly
•Building and Construction-Architectural
Services
•Automotive
•Information Technology and Communications
•Environment
38. Emerging Sectors
•Biotechnology
•Film and Post Production – Digital Effects
•Film Co-Production
•Design and Fashion
•Beauty and Cosmetics
•Health and Organic/Green Food
•Equestrian Industry and related services
•Forensics and Security
•Multimedia and Content Providers
•Vocational and Management Training
39. Diverse market – diverse deals…..
Real deals for Australia
Mining equipment
Training services
Safety systems audits
Hydraulic parts
Sports surfacing
Woollen quilts
Mining chemicals
Children’s books
Medical instruments Potato chips
Landscaping design
Industrial chemicals
Sheep skins Olive oil
Training
Engineering consultancy
Product design
Cut flowers
Fresh fruit
Video Lottery Terminals Sports education products
Salads Granite & sandstone
Pizza ovens
Pilot training
Trees
Pet clothing
40. A few more examples….
Pizza ovens & trees to Hong Kong Disneyland
Artificial surfacing for Olympic hockey fields
Industrial control systems- cigarette plants
Virtual medical surgery simulators-Chongqing
Children’s “pop-up” books in Xi’an
Aquarium fish from Cairns to Shanghai
Tax training for Guangzhou Tax Bureau
Pilot training for China Southern Airlines
Design – architecture, fashion, planning
Hotel management in Shanghai
Sandstone to Xiamen
41. Architectural Design
Soho “Shangdu”
Architectural Design
Olympics Aquatic Centre
45. The Business Environment
Role of Government in Business
Rapid change and development
Problem solving “on the run”
Vast differences/sophistication among industry
Logistics and Distribution systems not adequate
Lack of clarity in Regulations
Dispute Resolution
Internal Competition
Complex priorities and drivers
Opportunity driven and short-term
46. Golden Rules for Success In China
• Research your market – Internet / Consultants
• Develop a clear strategy
• Spend time on partner selection – lots of options
• Prepare Marketing Materials – Chinese language
• Seek alliances – strength in numbers
• Seek the less travelled road – customers/government
appreciate it
• Use agents and representatives where appropriate
• BUT – always have direct personal involvement
• Make sure company and individuals have commitment
• Manage Risk – Political/Economic/Disaster/Individual
• Register IP and Copyright
• Develop a strategy to protect your IP
47. Some Tips from the Frontline….
• Never presume the fax/message has been read and understood…
• Always follow up with phone/in market rep/Austrade etc
• Always expect changes at the last minute
• Be prepared to eat and drink but only on your terms
• Prepare some short speeches and research area you are visiting
• Prepare small but inexpensive ( creative gifts )
• Use an independent interpreter ( on your side if possible )
• Never assume an interpreter can handle all situations
• Never assume the flights will take off and arrive on time
• Don’t underestimate the power of government
• Don’t judge a book by its cover
• Be prepared if possible to spend more time ( flexible itinerary)
• Be prepared to provide or facilitate favours
-( what is a good University in Australia ? )
48. And some more ….
•Most formal jokes rarely work but humour is
worldwide
•Beware the salesman waving “guanxi” –
relationships
•Don’t assume one country is all the same …..
•Be aware of other priorities and considerations
outside business
•Never assume the contract is the end of
negotiations
•Be Yourself……..
49. Austrade’s China Network
15 offices
80 marketing staff
Strong local market
knowledge
Industry specialists
Customer contacts
