Australia sent the largest ever trade mission to China to visit
emerging regions and cities inland – the so-called second tier cities.
These cities, including China’s largest – Chongqing with 32 million
inhabitants – are some of China’s fastest growing centres – 15% or more
in 2010 and destined to go higher. They also include Changsha, Wuhan and
Chengdu. Around 100 businesspeople were whisked around these
cities on chartered planes and buses on a very well put together program
of activities by the Department of Foreign Affairs and Trade.
We’re seeing the program through the eyes of our Managing Director,
Charles Qin, who accompanied Trade Minister Craig Emerson as his
interpreter. There was a focus on urbanisation, sustainability, science
and technology, transport and logistics and financial services with
forums, meetings and one-on-ones with the key leaders in each area.
Tourism and education, which are so important to Australia, were also on
the agenda. Education in these inland areas is not of the same high
standard as Beijing, so ought to be an important area for attracting
students to high-quality Australian institutions – some of which were
represented in the Mission. Residents, likewise, are wanting to catch up
with the same services and standard of living seen in the so called
first tier cities like Beijing and Shanghai.
Financial markets might be tumbling around the world and Europe and
the US in the doldrums – but in China it’s full steam ahead as evidenced
by the scale of activity in these important centres. Flush with funds,
China is able to afford the best technology and drive rapid
transformation like no other country.
China introduced a Go West plan about ten years ago and there are
plenty of tax incentives to attract foreign businesses as these inland
areas strive to catch up to the east coast. Over 200 of the top 500
companies in the world are located in Sichuan Province alone. Chongqing
itself became a municipality at the level of a province in 1997 and
ranks with Beiijing, Shanghai and Tianjin alone at this level. More
incentives have been announced to encourage development in the 12 Five Year Plan.
Every year about 14 million people are moving to cities requiring
housing, transport and services. In fact over the last 30 years 450
million people have urbanised. The marketplace in cities like Beijing,
Shanghai and Guangzhou is especially crowded with competitors from all
around the world and where it is much harder to reach decision makers.
This means second and third tier cities are significantly more
attractive options where you’ll be given a hearing if you have something
good on offer. Not only that, a report I read a few years ago put the
cost of setting up in a first tier city at 40 – 60% more than the west –
that has to be a big plus, doesn’t it!
As Foreign Minister Rudd said when he sold the mission in his
roadshow around Australia: “If we think the changes of the last 30 years
have been dramatic, this I believe is only a foretaste of what is to
How to get in there?
A mission like this is a great platform to gain access to key
decision makers, or to hang off the Minister and Department’s
credentials to make you look good. Failing that, you can wait for the
next one as well as try and establish linkages in the areas you are
targeting and those connections must include Chinese Government
officials (Australian Government offices can be a good source of
potential contacts). Develop a proposition to show what you can bring to
the Chinese economy and remember they are keen on technology, training
and employment for Chinese. Show how your product/service can help China
achieve its objectives – say for example in the latest Five Year Plan
in Sustainability. Of course, your proposition must be in Chinese – well
translated – we can help you there.
It is important to be mindful of different legal and business systems
too. Good legal advice is vital and an understanding that culturally,
Chinese do business differently. A Chinese interpreter can be your eyes
and ears and cultural ‘interpreter’ as well when having discussions or
negotiations with Chinese.
So as the Mission winds up today in Shanghai, participants will
return to Australia much better informed and ready to tackle this new
frontier, and as Victoria’s Premier Ted Baillieu said at an
ACBC Gala Dinner in August: ” We’ve only just scratched the surface.” Let’s get
scratching and make that mark!