China Presentation Curtin Ps Oct07

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  • 1. China Presentation–Curtin University of Technology Paul Sanda Trade Commissioner Austrade - Beijing
  • 2. Wind and Waves are Strong but we are Determined !
  • 3. To Operate Successfully and undertake Business in China one must understand the History, Structure and Aims of the Chinese Communist Party.
  • 4. Big country – big differences
  • 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
  • 10. Focus on Education and Training
  • 11. Emergence as a ICT “Player”
  • 12. Not “MADE IN CHINA” “CREATED IN CHINA”
  • 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 !
  • 16. Shopping all over China
  • 17. “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
  • 18. 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
  • 19. Agriculture remains a significant Issue for China !
  • 20. 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
  • 21. 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
  • 22. “Thousand Villages and Townships Project” Bringing Consumer Lifestyle to Countryside
  • 23. … 270 days to go
  • 24. 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
  • 25. … the next big “games”
  • 26. Australia and China – a Special Relationship ?
  • 27. 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
  • 28. •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 $A1.2 billion • Government to Government relationship critical to commercial outcomes
  • 29. Major Australian exports, 2006 (A$m): •Iron ore 7,639 (Up) •Wool 1,378 (Up) •Copper Ore 1,209 ( Up) •Coal 598 (Up)
  • 30. Major China Exports , 2006 (A$m) •Clothing 3,351 ( Up) •Computers 2,587 (Up) •Toys, games & •Sporting goods 1,355 (Up) •Telecommunications 1,610 (Up)
  • 31. Total Trade Merchandise trade with China (2006) Exports to China (A$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)
  • 32. 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
  • 33. 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
  • 34. 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
  • 35. 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
  • 36. Architectural Design Soho “Shangdu” Architectural Design Olympics Aquatic Centre
  • 37. Stage Automation Systems National Theatre Lighting Control Systems Jin Mao Building
  • 38. Have we got a deal for you ?
  • 39. 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
  • 40. 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
  • 41. 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 ? )
  • 42. 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……..
  • 43. Austrade’s China Network 15 offices 80 marketing staff Strong local market knowledge Industry specialists Customer contacts