Copyright © 2006 Best Solutions International
Best Solutions InternationalMaximising Your Market Potential
1
What Does
China’s Growth
Mean to Us?
15. November 2006
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Best Solutions InternationalMaximising Your Market Potential
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When We Were Kids�
�China was a sleeping giant
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Very Much Awake In the Meantime
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A Look into the Crystal Ball
China will become wealthier• More money for SA products
• Basic materials - copper, steel, coal
• Vegetables, fruits and nuts
• Wine
• More money for Australian quality of life
• Holidays
• Education
• Retirement in SA?
• More money to invest in Australia
• To qualify for visas and citizenship
• To hedge their bets
China will continue to expand its manufacturing dominance• Automotive, general manufacturing, and low-tech items
made in Australia will be increasingly threatened
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All is not Gold�
Certain problems in China will worsen
• Gap between the “haves” and the “have nots”
• Civil liberties (religious freedom & political plurality)
• Corruption
• Piracy
• Water management
• Environmental impact of China's growth
• China's cost base will change as it matures
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Implications: Manufacturing & Distribution
Changes to Expect
• Chinese manufacturers will work
up the value chain
• Chinese will look to invest in
SA businesses
• Specialised, niche companies in
SA will increase sales to China
Implications
• Non-specialised SA manufacturers will continue to battle to survive
• Local companies with SA expertise will be attractive partners for Chinese
• Proactively seeking trustworthy business partners in China will pay off
• Success will come from focusing on strengths:
• Mass or commodity-type production in China
• R&D, complex or critical manufacturing or services in SA
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Implications: Travel & Leisure
Changes to expect
• More Chinese tourists to SA
• Herd mentality of Chinese tourists will slowly diminish
• Expectations of Chinese tourists will change –
more diversity
• Exclusive tours will be seen as status symbol -
Penfold’s Grange and the lot
Implications
• Adjustment of existing offering to match
Chinese tastes & interests
• Need for direct flights from Adelaide to major PRC cities
• Buying up of our comparatively "cheap" club memberships
• Ability to offer services in Mandarin will be critical
• Discovery of high quality of life in SA will lead to
more long-stay visitors
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Implications: Financial Services
Changes to Expect
• More Chinese investors in SA
• Baby boomer Aussie business owners
selling out to Chinese investors
• Chinese clients splitting time between
China & Australia
Implications
• Need for understanding of the Chinese business approach
• Involvement of family and friends
• Trusted partners expected to supply a wide range of support
• Strategic approach
• Work ethic / tenacity
• Demand for increased flexibility while maintaining professional standards
• Consolidation of global accounts: need to understand offshore systems
• Ability to offer services in Mandarin will become critical
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Implications: Health, Education & Personal Care
Changes to Expect
• More Chinese patients / clients
• More transient population (students,
holidaymakers, seasonal visitors)
• Spiralling overall heath care costs
Implications
• How to bridge Chinese expectations with Australian way of educating
and providing health and aged care?
• Increased demand for Traditional Chinese Medicine (TCM) care –
from Chinese and Australians
• More and more medical supplies coming from China
• Pressure to reduce health care costs – Chinese suppliers, offshoring
• Flexibility in fees and billing to serve non-Medicare patients
• Ability to offer services in Mandarin will become important
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Implications: Media
Changes to Expect
• Growth of specific sectors exporting
to China (mining, livestock, produce)
• Increasing interest of Chinese language
and culture in Australia
Implications
• Need to understand how increased
dependency on China affects local
business and citizens
• The role of media in interpreting
international developments for
the local audience
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Implications: Resources & Environment
Changes to Expect
• Continued strong growth of the mining industry
• Population increase in SA, if only transient
• Increased demand for Australia's unique flora & fauna
• China’s environmental mismanagement will continue
Implications
• Increased pressure to balance tourism revenues with
environmental management
• Role as communicator between factions will become more important
• Will Australia be affected by China's poor environmental management?
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Some Concluding Thoughts
• Remember that every challenge
brings opportunity
• Embrace the change, focus on your
strengths and figure out what China
means for your business, your job,
your family
• Seek more information and
be wary of xenophobia
• Visit China - see it for yourself
• Consider encouraging your children
and grandchildren to learn Chinese
• We certainly have more to gain than to lose as China becomes
more prosperous and a full member of the global economy