On the 30th July, we visited Austrade and met with Paul Sanda, the Trade Commissioner. Mr Sanda did a fantastic job of setting the scene of doing business in China - facts, ideas and developments which will form the basis of learning and discussion over the next two weeks. Austrade's role is to assist Australian companies seeking to enter the Chinese market and it acts as the commercial section of the Australian Embassy. A significant goal of Austrade is to establish recognition of Australia as a preferred supplier, particularly in industries such as financial services, clean energy and food and wine.
Austrade discussed how China is a substantial market with a population over 1.3 billion, a middle class of 80 million, and 33 cities with populations of over 2 million - a significant opportunity for Australian businesses, but to maximise these opportunities it is essential to understand the history, structure and aims of China and the Chinese community party. The Chinese communist party is the major stakeholder of the policy and planning of the large-scale economic and development interests of the Chinese people. It is important to look at the government's priorities to understand the potential current and future values and directions of China. The issues that China currently prioritises include regional versus national priorities, climate change, food security, energy consumption and education.
Austrade emphasised the opportunities in the Chinese market for Australian businesses. For example, China has a strong educational expenditure, a desire to address agricultural challenges and has a particular demand for foreign services - an area in which China is currently less skilled. Australia is currently an active player in China but demand seems to be outstripping supply of Australian services. Australia has a “special relationship with China”, with a significant number of high-level governmental visits, 30 major contracts in the Olympics in China in August, a significant export of resources and education to China and FDI of approximately AUD$3 million by Australian investors.
Mr Sanda stressed that an Australian company looking to expand into the Chinese market must fully research the market and effectively manage all aspects of risk, understand intellectual property challenges and their strategy implications, establish a commitment by the company and Chinese partners and spend more time on the ground gaining an understanding of the Chinese market, culture and political structures.
The Austrade visit was extremely informative and established a good basis for understanding of the people and government of China as well as the opportunities for Australian businesses hoping to capitalise on the vast, and ever expanding, demand of Chinese consumers.
