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www.AustralianBusinessForum.com.au Vol 5 Issue 2

Australian

Business Forum Australia China BusinesWeek 2013 Achieved success in Shanghai

Expanded opportunities for the Australian Business Sector How to get your business active & Online in China?

Presents

Wednesday, 19 June 2013 Crown, Melbourne


Imagine 4.2 billion buyers at your door After 40 years of doing business on the world’s largest continent, we know how to broaden boundaries. That’s why we’re the only Australian bank that offers our customers complete access to Asia’s largest payment card, UnionPay International – through NAB merchant terminals, ATMs and online.

For more information visit nab.com.au/asia

© 2013 National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686 A101459 SBPj382_ABF190313


23 Australian Business Forum Magazine is published by Australian Business Forum Melbourne Postal address: Po Box 568 South Yarra vic 3141 Shanghai Level 23, Citigroup Tower 33 Huayuanshiqiao Road Pudong, Shanghai, China 200120 Contact Details: Tel: +61 (0)3 8689 9898 Email: info@abforum.com.au Twitter: @ausbusforum AustralianBusinessForum.com.au

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Contents

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Australia China BusinessWeek 2013, achieved scucess in Shanghai

Expanded opportunities for the Australian Business Sector

Key considerations for your business strategy into China

Art Director/Design Rong Wang

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Digital Media Ahmed Arayne

China in the Asian Century And how HR is critical to its success

Switching on your cultural radar

How to get your business active and Online in China?

Editor Judith Davenport Marketing / China Operation Doris.Li@abforum.com.au

Contributers Boyd Peters Charlotta Oberg Dr Chris Vindurampulle David Frost David Thomas Doris Li Jeremy Oliver Jonathan Chancellor Justin K. Rickard Morry Morgan Robbie Burns

Advertising Media/Sales David.Frost@abforum.com.au Simon.You@abforum.com.au

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30 5 things to remember when pitching in China

33 Australia’s first significant investor visa granted

43 Billionaire property developer Hui Wing Mau the highest debutant on BRW Rich List

10 www.AustralianBusinessForum.com.au

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Fly

CANTON ROUTE to the WORLD Ask your travel agent about our great Business Class fares on the Canton Route, to China and beyond, or call China Southern Airlines 1300 889 628 4

Vol 5 Issue 2


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Presents

Australia-China Business Week

Achieved Success in Shanghai By Doris Li, ABF

A

ustralian Business Forum (ABF) has successfully launched its AustraliaChina Business Week (ACBW) Roadshow for 2013 with its Shanghai Event, which concluded on 12 April at the Westin Bund Center, Shanghai China. 60 delegates from Melbourne, Sydney and WA went to Shanghai and Hangzhou to review local business opportunities and connect with Chinese partners and investors.

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Presented by Naming Sponsor NAB, ACBW Shanghai included six functions at Shanghai plus a day trip to the major second tier city of Hangzhou, providing delegates with the rare opportunity to connect with Chinese partners; showcase Australian products, services, projects and investment opportunities to potential Chinese investors; review economic and business opportunities in China; and gain firsthand knowledge about how to maximise business in China from local experts. Over thirty prominent speakers delivered presentations in English & Mandarin, covering a range of critical trade & commercial issues affecting the SME-Mid Size Enterprises.

In a week of a Prime Ministerial visit, the BOAO Forum for Asia and big policy announcements, Australia China Business Week added the one missing piece to the Sino-Australian relationship, a bilingual and multi-faceted business matching forum designed to connect Australian SME businesses with Chinese business leaders, entrepreneurs and investors.” ---- ACBW 2013 Forum chair David Thomas

More than a hundred Chinese entrepreneurs and investors attended the forum to learn investment opportunities in Australia and meet with Australian delegates. “It was encouraging to see the interest that local Chinese companies and government agencies showed towards learning more about the Australian investment environment.” said Lisa Goodhand, Chair of ACBW Chinese Forum, “Australian companies should be encouraged by this interest as it shows there is genuine want to learn more about Australia.” ACBW builds a platform for Chinese and Australian individuals to come together, learn more and take their business to the next level. Without this type of platform, neither side may ever

know about each other as the language and cultural barrier between the two countries are significant. According to John Rashleigh, Chairman of ABF, ACBW mainly focuses on the SME sector “who depend more on external resources, partners and platforms when seeking opportunities in international markets”. “The aim is to create a credible business platform for businesses and investors from Australia and China to connect with the right contacts and have access to timely information on the opportunities in these two countries.” said Mr Rashleigh. ACBW 2013 will be held in Melbourne on 19th June and Sydney on 28th August. The event will return to China in June 2014.

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Delegates comments As one of the company delegates that attended the AustraliaChina Business Week in Shanghai 2013, I felt it was a worthwhile opportunity. Obviously the team at Australian Business Forum had done a very comprehensive preparation for its opening and the realisation of the practical value of the forum came to fruition. This took the form of questions and answers, experience and ideas sharing that covered a range of subjects such as government policies, culture, law, investment, banking, accounting, human resource, etc. Although the Australian delegates were from various fields, all topics and themes initiated were beneficial to all attendees. I believe that every delegate now has some new insights and understanding of the Chinese market and has a clearer idea on how they would proceed with their Chinese market development plan. Personally, I was very pleased to have made some Australian friends that trusted me and my skills and found my companyâ&#x20AC;&#x2122;s services were very useful to them. We have successfully melded together the best of East and West business culture and through this first hand understanding of doing business in China can pass on our own experience though helping customers with their needs. We will be glad to assist their businesses in China to attain a higher level. ABF acted as a very good bridge that connects Australia and China. It not only promoted the bilateral business development, but also strengthened the friendship and understanding of the two nations. Janey Lee Manager China of Nihao Global Corporation Limited

I just wanted to thank you for all the work you did at and for the conference. And this extends to all the unseen work as well, no doubt there is 10 times more behind the scenes going on. We were very happy with our outcomes. It enabled us to observe, speak, get a feel for the landscape and plan for our next step into China with some excellent contacts. We were really glad we participated, and would be more than happy to be testimonial or reference for other groups considering to join ABF events or for your web site. Boyd Peters National Distribution Manager Contango MicroCap Limited

I enjoyed both ACBW Shanghai and Hangzhou. It was a great first offshore ACBW event! ABFâ&#x20AC;&#x2122;s organization and attention to fine details are exemplary. Thank you for your hospitality and looking forward to future events. Dr Caroline Hong CEO SME Association of Australia

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Presents


Presents

Melbourne, Sydney Australia-China BusinessWeek

Wednesday, 19 June, Melbourne, Crown Wednesday, 28 August, Sydney, Sheraton On The Park Now in its sixth year, ACBW 2013, continues to create a unique platform for Australian businesses especially SMEs who are seeking a path to success in China, as well as Chinese entrepreneurs wishing to engage directly with their counterparts in Australia. ACBW 2013 helps companies to define effective entry and expansion strategies in China through a solid knowledge on government policies, business landscape and the latest economic outlook.

DAVID THOMAS Chair ACBW Forum

DR CAROLINE HONG CEO SME Association of Australia

ROGER DONNELLY Chief Economist, Export Finance and Insurance Corporation

ACBW 2013 Breakfast ACBW 2013 Forum ACBW 2013 China Day Forum ACBW 2013 Luncheon

More info visit: ACBW2013.com.au

DAVID OLSSO Board Member,ACC; Chairman, AustCham Beijing

ACBW 2013 Program:

ACBW 2013 “Mix at Six” Networking Function

MORRY MORGAN Co-founder ClarkMorgan Ltd

CHARLOTTA OBERG Founder and Facilitator, Prisma Cross Cultural Consultants

ROBBIE BURNS International Sales Director for ChinaSEO

DR HELING SHI Professor Dept of Economics,Monash University

Register Now

W: ACBW2013.com.au T: 61 3 8689 9898 E: info@abforum.com.au

NAMING SPONSOR

LIU YU Commercial Counsellor, Consulate-General of PRC in Melbourne

SUPPORTED BY

EVENT PARTNER ORGANISER

MEDIA PARTNER C

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CM

MY

CY

CMY

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ORIENTAL

OBQ LOGO.pdf 1 2/11/2010 12:50:46 PM

MICHAEL WADLEY Wadley Business Consulting


Expanded opportunities for the Australian Business Sector

D

espite the global drop in foreign direct investment, China’s ODI has been on the rise over the past five years, and China ranked as the fifth largest investor worldwide in 2012. At the Boao Forum for Asia Annual Conference 2013, President Xi Jinping said that China’s accumulative ODI in the next five years will reach $500 billion, while the country set a target of 15 % for ODI growth in 2013. Despite the global drop in foreign direct investment, China’s ODI has been on the rise over the past five years, and China ranked as the fifth largest investor worldwide in 2012. At the Boao Forum for Asia Annual Conference 2013, President Xi Jinping said that China’s accumulative ODI in the next five years will reach $500 billion, while the country set a target of 15 % for ODI growth in 2013. Within this context, the Chinese government will now raise the number of negotiations on investment protection agreements with foreign countries, and simplify & reduce administrative approval procedures related to outbound investment. Government officials in China have also recently pledged to improve delivery of services, simplify their procedures and initiate further negotiations with foreign governments to help Chinese companies to invest in overseas markets. Liu Hongkuan, Deputy Director of the National Development and Reform Commission’s Department of Foreign Capital and Overseas Investment,

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said that the government will expand its role as a facilitator in the ongoing expansion of China’s outbound direct investment.

Stock market in general terms. The ASX All Ordinaries Index has surged from 1989 right up to the GFC in 2008, and has held its own against many other Western economies since.

The core task for the Chinese government is to create a convenient and smooth environment for domestic companies,”

Australia’s stable political and economic climate makes it an attractive proposition for those investors in China seeking to take advantage of their Government’s determination to make it easier to reach out & form alliances here that can lead to established business relationships.

said Zhao Jinping, a senior researcher with the Development Research Center of the State Council. Zhao also suggested the Chinese government should enhance international investment cooperation and improve outbound investment laws and regulations. This is all good news for Australian business community in general, and some key industry sectors in particular. As Australian voters head to the polls in September 2013, the Liberal Party may well be voted in as the next Federal Government. The outcome of the election for investors here and abroad is that it’s likely to make a little difference to the continuing stability of Australian

By David Frost, Director of Sales, Australian Business Forum Contact: david.frost@abforum.com.au +61 3 8689 9896 www.ABForum.com.au

Australian Business Forum (ABF) has built a major business platform, Australia China Business Week (ACBW), for both Chinese and Australian businessmen to engage with one another. This year, ACBW has been expanded to China with the successful launch of its Shanghai event in April, and the next stop now is Melbourne on 19 June, then Sydney on 28 August. Visit : www.acbw2013.com.au for more information


Presents

China Experts attend Australia-China BusinessWeek Melbourne 19 June Crown Melbourne ACBW 2013 Melbourne Breakfast, 8.00-9.30am The Breakfast features a panel of economists who will provide an in-depth review of Chinaâ&#x20AC;&#x2122;s economy three months after the commencement of the new Chinese Government, as well as a forecast of the coming twelve months with a focus on trends, challenges and opportunities for the SMEs. ACBW 2013 Melbourne Forum, 10.00am-12.00pm, 2.305.30pm The Forum offers insights into the ambiguous, complex and volatile environment of China market and provides actual experiences of Australian enterprises currently engaging with China to help delegates refine their business strategies.

ACBW 2013 Melbourne Luncheon, 12.00-2.15pm The Luncheon is a high profile business function which hosts senior Chinese and Australian Government representatives, leaders from the Chinese business community together with top executives and industry leaders. Liu Yu, the Chinese Commercial Counsellor, and David Olsson, Chairman of the ChinaAustralia Chamber of Commerce who also sits on the Australia China Council Board, will deliver keynote speeches on Australia-China Economic Relations. It will be followed by case studies shared by reputable Australian corporates who have successfully established their Asian operations.

ACBW 2013 Melbourne Chinese Forum, 2.30-5.30pm The Chinese Forum, presented in Mandarin, is designed for domestic and international Chinese investors and entrepreneurs looking for business opportunities in Australia.

ACBW 2013 Melbourne Mix at Six, 6.00-8.00pm As a highly-established business networking function, Mix at Six provides exclusive opportunities to forge strong personal relationships with senior business people, government decision-makers and senior practitioners across many different fields in both Australia and China.

Presents

Wednesday, 19 June 2013, Melbourne Wednesday, 28 August 2013, Sydney T: 61 3 8689 9898 | W:acbw2013.com.au | E : info@abforum.com.au www.AustralianBusinessForum.com.au

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Enjoy some of life’s little luxuries at the Horizon Club Lounge next time you visit Shangri-La Hotel, Sydney.

IT’S IN OUR NATURE

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www.shangri-la.com/sydney

(61) 2 9250 6000


Key considerations for your business strategy into China By NAB Business Research & Insights

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n April, 60 delegates gathered in Shanghai at the most significant Sino-Australian business event of the year to hear and share insights into the opportunities from doing business in China.

has prevailed in recent years, but they will also generate just as many opportunities.

China: alive and kicking

Over the next 10 years 200 million people are expected to move from rural areas to urban centres – this shift will require accompanying infrastructure to support larger urban centres, such as roads, housing, retailing and utilities.

There is still significant interest in Australian produce: longterm access to food supply for an already bursting population that is

China is going through a period of significant change as their economy begins the shift away from their traditional investment and exports led model to a more developed economy where services and consumption play a much larger role. These changes are likely to present a number of significant challenges to China, particularly given the difficult global environment that

also undergoing a change of diet is critical. Food safety is also an issue after several recent food quality health scares – Chinese consumers have a distinct lack of trust for locally produced staples like milk powder.

Some of the key reasons why it’s not too late to get involved: •

Recent announcements reflect the continued improvement in relations between the Australian and Chinese governments. These include enhanced Chinese currency (RMB) conversion to the Australian dollar and mutual commitment to regular formal political discussions between Beijing and Canberra.

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What does China’s investment strategy mean for Australia? The Chinese government’s five-year plan is based on a three-pronged strategy: Going Out (outbound investment), Going West (developing trade and transport hubs in western China) and Going Green. For Australia, China’s Going Out strategy is of critical importance. Chinese outbound investors fall into two key categories: 1.

State owned enterprises: typically seeking strategic, long-term and complex investment.

2.

Private investors: often wealthy entrepreneurs, concerned with diversification, secure returns, and family succession opportunities.

Opportunities for private investors centre around: • • • •

The expansion of China’s services sector. Premium consumers desiring luxury brands. Outbound tourism. Investment in food security and safety.

Being aware of the changes to the Significant Investment visa and how this may benefit a potential Chinese investor is also important. Business migrants with $5 million or more to invest in the Australian economy can

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now apply for the visa, which provides a streamlined pathway to permanent residence for migrant investors who make a complying investment in Australia for a minimum of four years. For more information visit immi.gov.au Power of China Online It is estimated that the number of Chinese web users will overtake English language users world-wide by 2015, and web experts anticipate the size and volume of the Chinese online market to overtake the United States as the world’s largest soon. The Chinese obsession with the web continues to grow, driven by technology improvements and increased mobile usage. So if you’re doing business in China, having some kind of web presence is essential. Key considerations include: •

Your ‘Page 1’ matters: not just the look and feel, but the language. If your consumer can’t read your page, they will click elsewhere.

Understand the limitations of the internet in China: that means no Facebook, YouTube or Twitter access. Partnering with an experienced online agency will ensure you can execute basic online media/content through the right local channels that are right for your brand.

Start with basics: if you have marketing dollars to allocate, first base is generally Search Engine

Marketing (SEM) and language translation for some key pages. Cultural considerations Developing cultural ‘intelligence’ is not a concept that can be immediately taught. Developing your cultural knowhow is a learned skill that will help you to appreciate the way things are done. Wading your way through this cultural confusion is possible once you accept, adapt and integrate your behaviours to your surrounds. Chinese like the ‘experience’ of doing business – so expect negotiation, strong opinions and then further negotiations on elements you felt were already finalised. This is not because of a desire to go back on their word, but rather a desire for you to understand that the position they were in earlier may have changed, and for you to acknowledge this as part of a long-term relationship. Keep in mind that, like you, the Chinese seek respect and the same successful outcome that you do. When doing business in such a different environment, there are some key things to keep in mind: •

Take your time developing relationships: understand what the other party is looking for and consider the full picture. Don’t rush into doing a deal: think of the Chinese phrase “talk business after the third cup of tea”. Have a stepped approach to reaching your goals.


Understand some of the cultural differences: such as language, introductions and maintaining ‘face’. Do the same due diligence as you would in Australia. Don’t burn bridges: despite its size, the connections or ‘guanxi’ (literally: relationships) businesses have in China will always be greater than you expect including those with other foreign ex-pats. Plan well.

Be prepared for negotiation: to be used as part of building a relationship. Think differently: remember that sometimes in China what someone says may not be what they think.

exporting, manufacturing/outsourcing and investing in the greater China region.

Australia China Business Week continues in Australia, with events in Melbourne on June 19 and in Sydney on August 28. Delegates will learn about opportunities for Australian businesses considering trading, importing,

NAB Business Research and Insights hub is NAB’s online source of economic updates, business trends and case studies

For more information visit acbw2013. com.au

business.nab.com.au

Want to engage with Chinese Investors?... Australia-China BusinessWeek 2013 Wednesday 19th June - Crown, Mebourne

Register NOW! www.ACBW2013.com.au

Presents

T:+61 3 8689 9898 | E: info@abforum.com.au |www.ACBW2013.com.au www.AustralianBusinessForum.com.au

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投资澳洲

Think Global Consulting facilitates business and investment between Asia and Australia. We work with individuals, entrepreneurs, companies and institutions to build viable, sustainable and powerful connections by leveraging our networks and relationships in both developed and emerging markets.

思环顾问公司致力于促进澳大利亚与亚洲各国 之间的商业投资往来。 凭借我们在发达国家 和新兴国家市场的人际网络,我们与各界精英 人士、企业家、公司及机构紧密合作,并建立 了长久、可行、高效的联系。实施证明,我们 能为客户提供独特的渠道,帮助他们同亚太地 区的政府及产业决策人直接进行洽谈。

We advise our clients on market entry and business development, and manage investments sources from China and the Asia Pacific region into a range of attractive sectors, including Agriculture, Resources, Education, Renewable Energy, Technology, Property Development and Financial Services.

我们不仅为客户提供关于市场准入及业务拓展 方面的战略性建议,并且协助亚洲各国的投资 者投资在极具吸引力的产业中,包括农业、资 源、教育、可再生能源、技术、房地产开发及 金融服务产业。

We work with a number of leading Australian institutions to meet the objectives of our clients and to maximise all opportunities. Our approach is open, collaborative and focused on delivering results.

我们的委托人与多家澳大利亚龙头企业共事, 以确保达到客户预期的目标并充分开发各类商 机。 方式既开放、协作,同时又注重结果的 成功。

投资澳洲

To express interest in investing or doing business in Australia, please contact Think Global Consulting on +61 2 9267 1488 or email us at support@thinkglobal.com.au

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如果您有意在澳大利亚进行投资或开展业务, 请通过电话 +61 2 9267 1488 或电子邮件 support@thinkglobal.com.au方式联系思环 顾问公司。


China’s poultry industry loses USD65bn due to bird flu scare

Luxury car prices in China fall

China wages see doubledigit increase

The latest State media reports show that the H7N9 bird flu outbreak in China has cost the country’s poultry industry more than USD65bn, or an average of USD162m per day. Li Xirong, head of the National Animal Husbandry Service, was quoted as saying that poultry sales have tumbled as consumers have shunned chicken and other related products since the end of March. Experts urged the government to set an example to the public by treating poultry products in a correct way.

The Chinese government’s campaign against lavish spending by public servants is hurting the sales of luxury cars in the country, causing prices of imported cars to slide. According to the National Development and Reform Commission, average prices of imported luxury cars in April fell 3.4% year-on-year. The market for foreign vehicles has seen demand decrease since President Xi Jinping initiated a campaign against extravagant spending by government officials.

The National Bureau of Statistics (NBS) of China said average annual wages for employees at non-private enterprises, including State-owned firms and JVs, were up 11.9% in nominal terms in 2012, despite slower economic growth. Average yearly wages for employees at private companies climbed 17.1% to Rmb28,752 (USD4,681) in 2012, though salaries are much higher in the country’s coastal cities. The increase was a drop from 2011’s figure of 18.3%.

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30TH YEAR OF PUBLICATION

®

INSIDE On the brink as US broaches its fiscal cliff Europe bracing for continuing recession

Is ASIA’s miracle fading? Will America’s manufacturing renaissance end the dream?

October 1983

Emerging markets turn to subsidies, protectionism

asiatodayinternational.com Annual subscription including password access to ASIA TODAY ONLINE, Australia AUD280 (including GST), Asia/Europe/USA/Canada USD280. Print Post Approved PP240725/00001

ASIA2013

Welcoming our 30th year . . . OVER 30 years, Asia Today International magazine has established itself firmly as Australia’s most authoritative business journal reporting on Asia – a first reference source for both international corporations and SMEs trading, investing and providing services to business in Australia and Asia. We have earned our special credibility, which brings with it access to the people who matter in business and government – and the critical business information that business leaders need. We look forward, assessing issues with potential to impact on existing and future business, drawing input from business and government leaders in Asia and across the world. We identify social and political change likely to impact on existing business – or to create new business opportunities. We remain committed to excellence in reporting the business that matters in Asia.

To join our subscriber lists, visit www.asiatodayinternational.com Your subscription will cover ATI Magazine and ATI Magazine Online, our ASIA2014 assessment of the future business climate, password access to daily online updates and our archives, our subscriber e-brief alert, and a free online listing of the products and services you offer.

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INTERNATIONAL

GLOOM or DOOM?


NAB extends trade finance capability with China By NAB

N

ational Australia Bank (NAB) has added Renminbi (RMB) as an available currency for Australian businesses who import or export with China to settle their trade transactions. Daryl Johnson, Executive General Manager, nab business, said: “Australian businesses and Chinese enterprises can reduce costs, gain efficiencies, and improve supplier and buyer relations through the use of RMB as a trading currency.

companies’ Australian exporters can trade with, help manage foreign exchange risk and create cash flow efficiencies. China is by far the most popular Asian country that Small to Medium Enterprises (SME) businesses deal with, in particular importers who are bringing in goods for sale in Australia, according to a recent survey of NAB’s SME customers. Commenting on the benefits for Australian businesses, Mr Johnson said:

With China as Australia’s number one trading partner, taking more than a quarter of Australia’s exports and supplying around 15 per cent of its imports, the trend to RMB is set to increase, creating significant opportunities for Australian businesses.

“We remain committed to supporting our customers to expand into and trade with China. Our focus remains on educating Australian businesses on the benefits of transacting in RMB and the competitive advantages of doing so”. Settling trade transactions in RMB can widen the number of Chinese

1

SWIFT RMB tracker – Feb 2013

RMB payments grew in value by 171% between January 2012 and January 2013. February saw a 24% increase, versus 13% across all currencies, propelling RMB payments to an alltime high market share of 0.63%.1 NAB’s latest trade finance capability is in addition to the bank’s existing foreign exchange hedging capabilities and its agreement with China’s largest payment network, China UnionPay. NAB is the only Australian bank that accepts cards from China UnionPay on its EFTPOS and ATM networks and recently announced a new online payment capability for Australian businesses. NAB has branches in Hong Kong and Shanghai as well as a representative office in Beijing. NAB was the first Australian bank to establish a business presence in China in 1982 and has been focused on supporting customers in bilateral trade and economic relationships between the two regions ever since.

“For example, in the consumer goods sector, Australian department stores and importers of goods such as clothing and toys have established buying offices in Hong Kong to gain access to China. These businesses are starting to move to RMB and are benefiting from a wider pool of suppliers.”

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Melbourne â&#x20AC;˘ Sydney

1 17th May 2013, Melbourne

2 Keynote Speaker Hon. Ken Smith MP , David Olsson, presented an in depth overview of engaging with China 1. Ray Evans, ABF Hon. Ken Smith MP, Parliament of Victoria David Olsson, Australia-China Council; AustCham Beijing Santhi Sinniah, Parliament of Victoria

3

4

2. Hon. Ken Smith MP, Parliament of Victoria 3. Simon You, ABF Austin Shi, Jiangsu Provincial Government P.R.China 4. Kate Ritchie, Chin Communication David Frost, ABF 5. David Olsson, Australia-China Council; AustCham Beijing

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China in the Asian Century & how HR is critical to its success

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his shift to China hasn’t come as a surprise. In 1989 Australian Prime Minister Bob Hawke called for more effective economic cooperation across the Pacific Rim region, with the first APEC Economic Leaders’ Meeting held in 1993. Today, of the 21 member economies, 13 are within Asia. It’s a poorly kept secret that Hawke and his government were most interested in wooing China as a trade partner. But perhaps the most obvious announcement that China is the ‘new black’ was the October 2012 white paper, titled ‘Australia in the Asian Century’, which contained 348 references to China within its 320 pages. India only appeared 269 times, Japan 218, and Singapore 70. China’s Century; HR’s Challenge So this is China’s century. That much is clear. For neighbouring economies, their dollar, dong, baht, ringgit, and yen are all likely to benefit. European countries will realign their exports towards China, and so will 22

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the Americas, namely Brazil. Other economies will also benefit as their main exports increase to China. These include Iran, South Korea and Saudi Arabia. So if ‘energy flows where attention goes’, managing this new attention is likely to become a challenge for HR,

as China evolves from a spoke in the economic wheel to become the hub. HR, it’s time to prepare for the global shift to The Middle. More Responsibility Localisation of foreign businesses is no longer a long term strategy, but a short term goal, with many top jobs,


Failure to Culture Shift Steven Wood, Huawei’s former Global VP of Human Resources highlights the negative consequences of this command and control management culture prevalent in China today. Wood says, “In the selection processes for openings [at Huawei], all selections are made behind closed doors, versus an open selection process.” He highlights that this posses a significant problem for the 34,000 non-Chinese employees who are used to an open selection policy. Wood adds that there are similar problems in “succession planning, performance management, benefits, employee relations, leadership development, learning and other areas”. As a consequence of a closed and somewhat antiquated HR system he believes that compared to Western competitors, such as Ericsson or Cisco, Huawei’s turnover is three to five times for foreign employees working internationally. Such poor statistics are bound to hamper China’s rise, since much of China’s future economy will be dependent on expanding globally.

post Global Financial Crisis, going to locals. While this trend has freed up tight budgets it has also increased the weight of responsibility on Chinese leaders’ shoulders and understandably this has challenged the relatively green local leaders. In a 2011 Korn/ Ferry Leadership and Thinking Style assessment it was found that most Chinese C-suite leaders were rated very low for Social Style and low for Participative Style – two leadership qualities Korn/Ferry believes are important for matured global leaders. Referring to the research, Jack Lim, Managing Director of Korn/Ferry’s Leadership & Talent Consulting division in China, said that Chinese are competent in terms of task and intellect, but are “weaker with communication and social leadership qualities in comparison to Western counterparts.” As a consequence, Lim believes that on the job training and coaching will become more important to bridge the gaps.

Need for stronger leaders Wood’s personal experience is reflected by research carried out by Great Place to Work® in their ‘2012 Best Companies to Work for’ report. Thirty-two companies based in Beijing, Chengdu Guangzhou, Shanghai, Dalian, Hong Kong and Taipei, and 60,000 employees were survey to generate the Greater China data. Compared to the workplaces in the rest of Asia, Latin America, Europe and North America, the Greater China employees rated their workplaces poorest in relation to credibility, respect, and fairness. North American leaders were consistently on top across all three categories, even achieving 13 percentage points higher than Greater China, in terms of ‘respect’.

Solution? Start with four steps Politics aside, there are steps that HR can take to improve the ability and consequent brand of China’s corporate leaders. Step one is acknowledging that the existing management culture can be improved. The term ‘Best Practice’ is not limited to the Western vocabulary. The act of continuous improved, known as Kaizen, was coined by the Japanese, and Singapore and Hong Kong rank number one and two in terms of ease of doing business, according to the World Bank. So there’s no reason why China can’t become a world leader, with respect to business best practice. But it starts with self awareness. This may be easier said than done. In a culture that is heavily rooted in filial piety, that is the virtue of respecting one’s parents and ancestors, criticism or even benign feedback is often feared, and in some cases punished. And that’s why constructive criticism must be part of a company’s ‘process’, with the easily swayed human bias removed. The use of Balanced Scorecard or even simple KPIs are step two. Building a culture of RACI, that is Responsibility, Accountability, Consult and Inform, is step three. And step four is removing proactive behaviour and risk taking from the list of taboos, and embedding delegation practices into best practice management practices through active rewards and encouragement. And that’s just the beginning.

By MORRY MORGAN Co-founder,ClarkMorgan Ltd; ACBW Speaker Australian born Morry Morgan moved to Shanghai in 2001, and has been a key player in the growth of the HR industry in China. He is the co-founder of award winning training firm, ‘ClarkMorgan Ltd’, which is now in its 12th year and has trained thousands of Global 1000 and Chinese multinational firms.

www.AustralianBusinessForum.com.au

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The AustralianWine Annual

2013 The Australian Wine Annual 2013

2013

• Your comprehensive, independent guide to Australian wines • Now available in English & Mandarin Chinese • Knows what’s hot, what’s not, what to drink and what to cellar • Reveals Jeremy’s Wines of the Year and Top 100 Australian wines • Says who does best with each grape variety and where they are • Frank commentary on issues facing Australian Wine • Jeremy Oliver waives his speaking fee with every order of 1,000 • Customise the cover with your (corporate) logo • Can come presented in an elegant gift box

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Switching on your cultural radar A

dvice on doing business with China is all around. Some of it is good, some bad, and some absolutely crucial to your business success. Even the best advice can’t, and shouldn’t, replace developing your own cross-cultural radar. “I learned twenty do’s and don’ts before going to China – how to hand over the business card and what gifts to give. Of course, these only covered a fraction of situations I experienced. Many of them still mystify me”, said one Australian business owner at the recent Australia-China Business Week in Shanghai. It’s tempting to memorise protocol tips. Mastering the respectful two-handed business card exchange is a fine start, but how do we go from there to build credibility, trust and strong business relationships? By understanding the cultural “why” behind the behaviours we meet. Culture tends to blindside us; we take our values for granted, often thinking of them “common sense”. The trick is knowing what values and practices are common and shared, and which ones are not. As many China experienced business people and scholars point out, China

is modernising, not Westernising. Chinese culture still values status, relationships and interdependence. Face and Guangxi often quoted as key, yet seldom fully understood. Face is the equivalent to ones status in society. It includes but goes beyond notions of reputation, extending to dignity and honour in the eyes of others. What Western cultures may dismiss as an insignificant mistake, such as being asked a question in a meeting and not knowing the answer, can cause a significant loss of face – especially when this happens in front of others. Giving face can involve praising others publicly, treating them to an expensive meal and giving a valuable gift. Gestures count, grand and small.

friendships, it is a web of obligations, including favours for family members. Third party introductions play a key role in establishing those relationships so critical to doing business. Guanxi is the key to getting anything done in China – just keep in mind that it is reciprocal. Switching on our cultural radar means asking “What are the cultural differences that matter?”. The key lies in understanding cultural values and where they came from. Then we can better navigate interactions, make sense of the advice of others and use those protocol tips effectively.

Guangxi refers to one’s pool of power, based on personal connections and relationships. More pragmatic than By CHARLOTTA OBERG Founder and Facilitator, Prisma Cross Cultural Consultants; ACBW Speaker An award-winning cultural diversity specialist with cross-cultural experience from three continents over 20 years. She is committed to equipping people who interact across cultures with Cultural Intelligence, to contribute to their success, client satisfaction and thriving multicultural societies. www.AustralianBusinessForum.com.au

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Online Retailing in China: Already the Next Big Thing By Dezan Shira & Associates

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he shift in foreign investment in China from export-driven manufacturing to selling foreign products in China is well underway. For those businesses looking to sell their foreign products in China, amongst more traditional avenues of selling, online retailing is now relatively open to foreign investment. Previous restrictions to foreign investment in online retailing have been lifted as part of China’s WTO commitment to reach an “open market.”

the millions of Chinese buying online, need to set up a foreign-invested commercial enterprise (FICE). A FICE can either be a wholly-foreign owned enterprise (WFOE) or a joint venture with a Chinese partner (JV). In 2010 the Ministry of Commerce clarified that online sales activities are an extension of the enterprise’s existing sales and a FICE already operating in China can undertake online sales without approval from the Ministry of Commerce.

As with most statistics on China, the numbers are staggering. Last year, the number of online shoppers increased by over 20%, to reach 247 million. The number of online shoppers is larger than that of the US. Chinese consumers have adapted quickly to the online marketplace and the increasingly wealthy young urban professionals are driving the trend of buying everything from clothes to imported food online. Foreign investors, who want to reach

For foreign investors who realize that export-driven manufacturing isn’t the only reason to be in China, and see that selling in China is not just about bricks and mortar, online retailing is a tremendous opportunity. But the sheer volume of customers and the potential for sales doesn’t mean that everyone will succeed. There have been some serious flops in foreign investment in China’s retail market, America’s Best Buy a notable example. Websites need

1

to be in Chinese, popular Western social media such as Twitter and Facebook are blocked in China, so their Chinese equivalents, Weibo, Ren Ren, and WeChat dominate, and lastly while the China market is modernizing it is not necessarily Westernizing. This means that not everything that is popular in a company’s home country will necessarily sell in China. Cultural differences still need to be kept in mind, however there is a tremendous diversity in the Chinese online marketplace. A quick glance at the homepage of Chinese online behemoth Taobao (owned by the Alibaba group, whose sales in 2012 were larger than Amazon and Ebay combined1 ) shows that Chinese buyers can buy everything from iPhone covers to household furniture on the C2C website. Australian companies who can adapt their business model to the millions of Chinese who want to buy anything and everything online will do very well.

“E-Commerce in China: The Alibaba Phenomenon” March 23, 2013 The Economist

www.AustralianBusinessForum.com.au

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How to get your business active & Online in China?

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ne of the first questions people ask is if they require a .CN web domain for their business. For the majority of international companies, the answer is “no, not unless you want to engage in active e-commerce locally (in China).” By China law, only a China registered office can apply for a .CN domain, and, for Chinese search rankings it really does not matter.

It is important to “learn the playing field” and work out your China web “face” and marketing strategy based on up to date research and data. Find out what your top 5 or top 10 competitors are achieving today online. Good online market research helps set expectations and guide overall web strategy.

Once your domain and account is registered and your content is up and indexed your pages have the served search ranking values as local all domain addresses registered on the Search Engine (eg. Baidu).And Chinese are quite used to viewing international URL addresses. Your local URL for e.g. “yourbrand.com/cn” or “china. yourbrand.com.au” shows viewers they are at the genuine pages of your site.

Key Performance Indicators (KPIs) are track able goals and benchmarks for your website. Set clear, realistic online and offline performance benchmarks and allow time for the web and traffic to gather momentum. Set calendar campaigns and traffic targets and ensure the web pages are doing the role they are designed for. Technical KPIs include page and traffic metrics, rankings and IT performance. Other KPIs can include new content, numbers of leads generated or inbound enquiries, mentions of your brand and content distribution on other-web sites and platforms, numbers of “fans” and seasonal content reviews/updates and more.

Step 1: Market and competitor research China is competitive online and quite different to western online marketplace. We find many folks are surprised at the traffic and performance benchmarks compared to western equivalents. 28

Vol 5 Issue 2

Step 2. SEO Strategy KPIs and benchmarks.


Step 3. Quality China web pages and presence: Quality translation and good page text/ Copy are vital. Do not use “translation software” as even the best (including Google) struggle to make coherent translation and it negatively affects your online image and brand. Just as “Chinglish” grammar is laughed at by western tourists, so is poor Chinese on western websites. It maybe amusing to read but “nobody wants to buy” from a website with poor grammar or spelling errors.

>_<

 (*_*)

^_^

:)

Chinese pages do have different design characteristics also, they prefer content rich pages rather than simple and sleek as preferred by westerners. This does not mean “re-design the entire site,” it just means ensuring your Chinese pages are customized for the audience whilst still maintaining your company brand DNA. China Social Media platforms and content not on your own website but on others such as Weibo, can also assist maintain a “good China face” online. Additional E-commerce platforms like TMall can also help drive sales as well as traffic to your own e-comm platform. Step 4. Opening Baidu and China SEM accounts “The great firewall” blocks many popular western websites and platforms, including Google, Facebook and Wikipedia to name a few. Your pages will need to be found by Chinese Search Engines (SEs) and any marketing campaigns will need to

allocate budget towards Chinese SEs. Baidu is by far the most popular search engine today. It is also the 5th busiest website on earth. If your web pages are not registered or at very least indexed on Baidu then you are missing out on traffic from China. Step 5. Active China SEO and managed SEM Stay on top of the rankings with optimization of your web pages. Baidu alone has 95 plus factors to consider when ranking your website so it is important your SEO provider is on top of updates and changes to Search Values in China. “360” was not even ranked in top 10 last year and is now 2nd. Taobao has also just released it’s own search portal so keeping up with the market is very much part of the winning game. SEM, paid-online marketing is also important to help keep up inbound traffic and just as importantly block your competitor from getting the views. Newcomers need to beware that the competition is fierce and prices are very much market driven. For example, “Travel to Australia” was worth 70 US Cents per click in September, but was up to $3.55 USD in December per click. Paid blogs can range from $10 USD to $10,000 USD per blog. Careful strategic targeted campaign management is essential to ensure budget’s last the distance and maintain good traffic throughout your campaign.

By ROBBIE BURNS International Sales Director for ChinaSEO; ACBW Speaker Robbie instigated and was involved in many “China 1st’s” in action and sports marketing in China. His last role was China Business Director for the O’Neill brand before partnering with John Wei and ChinaSEO.

www.AustralianBusinessForum.com.au

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5 things to remember when pitching in China I

have just returned from Australia China Business Week in Shanghai and, having observed over 50 Australian companies pitching their capabilities to a wide range of potential Chinese investors over three days, including assisting many of them with preparation, documentation and managing their expectations, the following five golden rules should be helpful for everyone to follow in the future:

1. Use a professional translator When visiting a company or Government department in China it is very common to be given a beautifully presented bilingual document, with details of the company, city or industry you are visiting, including colours,

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Vol 5 Issue 2

photos and images in an expensively produced brochure. In comparison, our own documentation is often shabby and, worst of all, in English only, with no Chinese translation. If you want some clues as to how to present your capabilities to a Chinese entrepreneur or business, take great notice into how they present their credentials to you! Translating professional documents is not as simple as asking a bilingual member of staff or friend to do it for you. This is a very common mistake. It may get the job done quickly, painlessly and at no cost, but how would you like your business described in Chinese as striving to “succeed when the horse arrives” or your business operations and goals to be misconstrued?

Having your company profile and business cards professionally translated into Chinese will dramatically improve the quality of discussion and level of understanding in a meeting with Chinese investors, entrepreneurs and business leaders. It is a sure way to show that you are serious about your business potential and will make your company stand out as a leading and professional business. Don’t cut corners on this, use a professional translator! 2. Make friends first, do deals second There’s a saying in China that you don’t talk business “until the third cup of tea!”. In other words, you build the relationship first and only then should you focus on the business deal. This can appear tiresome, long-winded and


unnecessary, but it’s the way business is done in China and you ignore this at your peril. Make the time to get to know your potential business partners, talk about their country, teach them about your culture, extend the hand of friendship and tell them about your interests, hobbies and passions. When you’ve exhausted every possible topic of conversation, and when the timing feels right, offer to start talking business! You’ll get a better result this way. 3. Take your own interpreter The process of facilitating and interpreting in a business meeting in a cross cultural environment with language barriers is an art as well as a science. Professional interpreters spend years perfecting their craft, a process of study, practice and observation. Not only do they need to be highly proficient in both languages, but they also need to learn the method of capturing the meaning, flavour and expression in the language, which is so much more than a simple translation of the actual words. Having your own interpreter who understands your business and objectives in depth will prevent any misunderstandings or cultural insensitivities. Your hosts in China will often offer to provide an interpreter for a meeting which, at face value, seems generous, reasonable and practical, and will save you some money. This is a false economy. Your interpreter should be someone who knows you, who understands the meaning you are trying to convey, and is at all times representing your best interests (including providing feedback to you after the meeting on what might have been said by others). Always take your own interpreter!

4. Observe and embrace business etiquette As an aspect of developing trusted Chinese business relationships, the importance of culture and etiquette should not be underestimated. If you have received or met with a Chinese delegation, you will most likely have received a Chinese gift. Giving gifts in Chinese business culture is a gesture of thanks and a sign of a willingness and dedication to forging a long term relationship. Consider taking a gift when you meet prospective clients or business partners – preferably something that has a strong meaning to you (from your local town, country, community or even family). You should also embrace and even seek out opportunities to show your respect to your hosts, business partners and colleagues by observing popular Chinese business customs and etiquette. If you have been to a Chinese banquet you will have noticed that Chinese business people love to toast. Take the initiative and toast towards the success and the future of your relationship, to the inspiring person you have met, to opportunities and to health and happiness – it gives them “face” and shows an understanding and appreciation of their culture! (An interesting side note - when toasting, always try to clink your glass with theirs at a lower level – it is a sign of respect and acknowledges their importance and position).

5. Follow Up When following up with key contacts and new relationships from a meeting or conference, it is important to send your follow up email in Chinese (just as when we receive emails in Chinese, they often go to our Spam folder, your English email may go to theirs!) and follow up with a phone call (preferably by a Chinese person) to ensure that it has been received safely. Don’t assume that they will receive anything by email, or that a lack of response suggests they’re not interested! You will need to work hard to develop a strong line of communication with them from a distance (which is why you need to plan to be on the ground in China regularly!). In addition, if you are sending a proposal, make sure this is also in Chinese, and is addressed directly to your contact (to avoid being given to an English-speaking junior in their company). These are just five basic rules to consider when engaging with Chinese investors, entrepreneurs, business leaders and Government officials. These small investments will make a world of difference to your reputation as a company and the future of your engagement with China.

By David Thomas , facilitates business and investment between Asia and Australia. He works with individuals, entrepreneurs, companies and institutions to build viable, sustainable and powerful connections by leveraging his networks and relationships in both developed and emerging countries. More information at www.davidthomas.asia

www.AustralianBusinessForum.com.au

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ShineWing Hall Chadwick ShineWing Hall Chadwick is the first office of ShineWing outside of the Asian region. Being at the forefront of inbound and outbound transactions, we are Corporate Advisors to Chinese State Owned Enterprises (SOEs), large private investors and corporate groups based in Australia and China. We assist with Business Services, helping corporations and high net wealth individuals manage their international and local Taxation compliance and corporate affairs. We also provide provision of a seamless Audit Service to Australian companies wishing to enter China through our Extensive Chinese Network.

Talk to us about business with China For more information please contact, 如需更多信息,请联系: David Chu 朱国正 International Business Partner 国际商务合伙人 david.chu@shinewing.com.au Michael Smith 史密夫 Corporate Advisory and Forensic Partner 企业顾问及法务合伙人 michael.smith@shinewing.com.au ShineWing Offices 信永中和分所 Beijing 北京 , Shenzhen 深圳 , Chengdu 成都 , Shanghai 上海 , Xi’an 西安, Qingdao 青岛 , Tianjin 天津 , Changsha 长沙 , Changchun 长春 , Yinchuan 银川, Ji’nan 济南 , Dalian 大连 , Kunming 昆明 , Guangzhou 广州 , Fuzhou 福州, Nanjing 南京 , Hong Kong 香港 , Singapore 新加坡 , Japan日本 , VolAustralia 5 Issue 2 澳大利亚 32

Matthew Schofield 史高菲 Audit Partner 审计合伙人 matt.schofield@shinewing.com.au Our Melbourne Office 墨尔本所 Phone(电话): +61 3 8602 7300 Level 1, CITIC House 99 King Street Melbourne VIC 3000


AUSTRALIA’S FIRST SIGNIFICANT INVESTOR VISA GRANTED By JUSTIN K. RICKARD Australian Lawyer, Australian Registered Migration Agent E: jrickard@ozemail.com.au

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ews of Australia’s first Significant Investor Visa (SIV) approval to a Chinese toy manufacturer and his young family sponsored by the Victorian Government, was welcomed this week by Justin Rickard, principal lawyer and China migration expert since 1992 . Just weeks ago Mr. Rickard attended Shanghai, China at Australia-China Business Week (ACBW) in April 2013 simultaneously with Prime Minister Gillard’s ground-breaking China visit. He applauds Australia’s initiative to create a stronger and more comprehensive relationship with China. A great development in this relationship was the much lauded Significant Investor Visa program, launched November 2012 – it has already received over 170 applications less than 5 months. With each visa applicant investing at least $5M to obtain the visa this already totals a potential $850 million for Australia, all of it from China so far,

and over $4 billion more is expected this year alone. As applicants need endorsement by a state government, Australian states and territories are competing with each other as to how their applicants will make their so-called complying investments. One of the main differences between the 888 visa and other business visas is that it permits residency without demanding the holder live in Australia. In fact, it only requires a total of 160 days’ residency over a fouryear period. This allows applicants to invest in Australia while managing interests elsewhere. After four years, the holder can get sub-class 888 Australian permanent residency. China is Australia’s largest trading partner with two-way goods and services trade worth $128 billion in 2011-12. China is also Australia’s largest source of overseas students, with around 150,000 enrolments in 2012, and the second largest source of overseas visitors, with more than 626,000 arrivals in 2012.

Mr. Rickard’s most recent China trip was his fifth and he can see a clear trend emerging; “The Chinese are as interested in foreign investment now as they have been in migration in the past. The two are totally interconnected and each feeds off the other beautifully. Chinese companies and institutions are working closely and cooperatively to analyze and actively move into Australia on a grand sale. This can only be good for both countries if handled properly.” The first SIV approval also comes at a strategic time. As David Thomas, Chair of ACBW Forum confirmed that “ China has over one million millionaires and close to 200 billionaires, and being a high savings economy with a rising middle class, more and more high net worth individuals or capital rich companies are now looking to international markets for new investment opportunities.” Australia’s SIV program is poised to capitalise on this opportunity with this first approval now granted.

www.AustralianBusinessForum.com.au

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“Going Out” Why the 12th Five Year Plan is a Game-Changer for Australia By David Thomas, ACBW Forum Chair

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hina’s “Going Out” strategy and the new priorities outlined in the current 12th Five year Plan, create unprecedented interest in Australia amongst Chinese SOEs, business leaders, entrepreneurs and high net worth investors. After 30 years of achieving “growth at any cost” (driven by low cost labour, exports and infrastructure development) China is now attempting to transform itself into a modern, innovative and clean economy which is largely propelled by domestic consumption. The current Five Year plan sets a clear direction for China’s growth in the future which, as we are often reminded, is “modernising” rather than “westernising”. The 12th Five Year plan identifies three key priorities for China – “Going Out”, “Going West” and “Going Green”, all of which create opportunities for

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Australia. China’s outbound foreign direct investment exceeded foreign inbound investment for the first time in 2012, growing from US$60.1bn in 2011 to US$77.2bn in 2012. However, despite political and media concerns in Australia, China actually represents less than 5% of our total foreign direct investment, trailing far behind our largest foreign investors, the US, Europe and New Zealand, and most of this investment has been in one sector: mining, commodities and resources. Nevertheless, many large companies and entrepreneurs in China have an explicit and well-documented ‘Going Out’ strategy and their focus is targeted at new sectors. So what are the drivers for this investment, which sectors and industries are being targeted and how can Australian businesses position themselves for these new opportunities?


Australia is currently the number one destination for Chinese outbound investment based on transactions conducted over the past decade (over A$65 billion invested into our resources sector) and is now well placed to attract investment into our food and agricultural sector, as Chinese investors tackle their next strategic imperative (after energy security) which is to ensure safe, sustainable and secure supplies of nutritious and high quality food for their large population. Whilst no overarching generalisation can be made with regards to the nature and reasons for investing overseas, there are three main drivers of outbound Chinese investment: Diversification China’s “Going Out” strategy is driven by two main objectives: to reduce their exposure to the US dollar by investing in real corporate assets in other countries, and to make strategic investments into new modern industries. China has USD$3.31trillion in foreign reserves, approximately 54% of which are in US dollar holdings, notably US Treasury Bonds. China has been steadily reducing its US dollar holdings from 74% in 2006, to 65% in 2010 to the current holding of 54%. Despite this reduction in US dollar holdings, the Chinese Government is still encouraging both state-owned and private companies to diversify their assets and operations overseas and to thereby reduce the country’s exposure to the US dollar. At the same time, the Chinese Government has directed these

companies to make strategic investments overseas, and to invest in industries that enhance and develop China’s own capabilities. Industries which have been identified in the current Five Year Plan as being of particular significance to China include Education, Healthcare, Technology, Clean Energy, Tourism and Financial Services.

decade but are reaching the point where future double-digit growth can only come from expanding overseas. By investing in or acquiring international businesses, Chinese companies are able to gain access to a global customer base, tap into new sources of product development, innovation and knowledge, and generate new revenue and profits from overseas.

Migration Many wealthy Chinese entrepreneurs and high net worth individuals are becoming increasingly interested in migrating to Australia to satisfy a number of long term objectives for themselves and their families – retirement, succession and long term quality of life. At the same time, the Australian Government is encouraging high net worth individuals to apply for permanent residence under the new “Significant Investor Visa” category which is designed to attract investment into Government Bonds, Complying Managed Funds and Australian Private Companies.

Whilst the longer term plan for Chinese entrepreneurs and companies may be to acquire US firms and list on Wall Street, Australia is an important stepping stone in their journey to building a truly global business. Australia offers access to mature and sophisticated markets, a regulatory regime which demands high standards of corporate governance and transparency, and an opportunity to manage their brand, people and products in a relatively friendly and open environment. Good examples of Chinese companies already operating successfully in Australia include Huawei, Haier, China Southern, Kingold, HNA Group and the major big 4 banks.

With over 150,000 Chinese students now being educated in Australian Universities, and wealthy Chinese entrepreneurs looking to diversify their business interests and developing a succession plan for their children and future generations, Australia is well placed to attract private investment from those looking to adopt a “one foot in, one foot out” policy between China and Australia. Growth Many Chinese companies have achieved extraordinary growth in their domestic markets over the past

The Australia-China investment story is only just beginning. Australia’s reputation for quality, consistency and reliability, together with our high quality of life and multicultural population, underpins the attractiveness of Australia as a target for outbound Chinese investment. The Chinese are already investing in Australia and plan to do more. This is a potential game-changer for Australian entrepreneurs, business leaders and politicians!

www.AustralianBusinessForum.com.au

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VISA with a difference

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ecently I participated in a trade delegation to China and met with successful Chinese businessmen. My primary objective was to promote Investment Services to those looking into the new Significant Investors Visa (188c). What transpired was eye opening and unexpected. When the Australian Government introduced 188c it opened the door to many people who otherwise may not have considered holding an Australian VISA. This is a very attractive scheme and, with fewer requirements such as no age or language limits is different from existing Visas. Essentially, Visa holders maintain AUD$5m in a Complying Investment while they meet the qualifying period for full Residency. This provides them and their immediate family and dependent relatives full work, travel and study rights for up to 8 years. Little attention has been paid to just how significant these benefits are. While the lifestyle, education and health benefits are a given (after all Melbourne is the World’s most livable city!) little attention has been afforded to the local impact that waves of successful, driven and innovative business people introducing their operations into Australia may have.

Unheralded benefits of the Visa I heard included “reweighting into the Australian property market…business expansion into an additional market…. business back-up and continuity in same time zone and investment diversification”. It is my observation that many businesspeople will continue their operations, but progressively operate more of their Asia-based businesses out of Australia. This will bring immediate benefits to Australia through Investment, employment, travel and office requirements. Also little recognised are the prevalence of networks amongst Chinese businessmen. In many instances, wealth has been generated collectively, thanks to horizontal and vertical business relationships and supply chains. Speaking to many people it is clear that where one goes, many will follow.

Some Fund Managers are already offering their services to applicantswhose Complying Investment requirements go beyond “set and forget” portfolios. Contango for example offer various investment options, web access, regular reporting in multiple languages, access to portfolio managers, presence in Tier 1, 2 and 3 cities and also work experience opportunities for clients dependants. Australian companies that engage these networks on a “relationship” basis may find the Significant Investors Visa becomes a Significant part of their business. If handed properly these relationships should continue well beyond the clients obtaining Permanent Residency.

By Boyd Peters, Distribution Manager, Contango Asset Management Limited Contango Asset Management Ltd is a boutique Australian Equity manager that was established in 1998 by a small group of Melbourne based investment professionals. In addition to core Australian Equities the company manages a range of specialist funds including Small Cap and MicroCap Australian equity products. www.AustralianBusinessForum.com.au

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 Highly regarded Investment Manager  Mandarin and Cantonese speaking  Unparalleled client service  Successful managing funds since 1998  Seeking Agents for 188c referral relationship

Australian Significant Investor Visa ” Why Contango

The Australian Government has announced a new visa pathway for migrant investors coming to Australia. The Significant Investor visa is a stream within the Business Innovation & Investment (Provisional) (Subclass 188) visa and the Business Innovation and Investment (Permanent) (Subclass 888) visa. Contango Asset Management Limited offers S.I.V #188c compliant funds to all states in Australia and can provide Visa applicants with the required documents which provide verification of Complying Investment (Form 1413) and Statement as to how the investment benefits their chosen state.

Tailored for Investors

Moving to another country is a great life changing experience. At the very least, Contango will ensure your SIV188c investment is responsibly managed and that you receive the highest levels of personal service available. As well as our successful and well regarded portfolio managers who are committed to professionally managing your investment, Contango also have a team dedicated to servicing its SIV188c clients. As you navigate around the Contango SIV188c web site you will recognise that the service our clients receive is the benchmark for outstanding service and the envy of its competitors.

Australia’s leading Significant Investor Visa (SIV188c) Investment Manager

About Contango

Contango was Incorporated in December 1998 by a small group of Melbourne based investment professionals. Contango has since grown to a team of 16 professionals- including 2 in-house economists and client relationship managers servicing clients across the Asia-Pacific region. Contango specialises in the management of Investment portfolios for sophisticated investors and institutional clients, including well known Australian Investment and Superannuation Houses.

Visit the Contango 188c Web Investor Centre or call 0061 3 9222 2333 for more information www.contango.com.au

弹性管理投资组合结构 Contango

Asset Management Ltd (Contango) does not make investment recommendations nor provide investment advice. Neither Contango nor its related entities, directors or officers guarantees the performance of, or the repayment of capital or income invested in any Fund. Professional investment advice can help you determine your tolerance to risk as well as your need to attain a particular return on your investment. We strongly encourage professional advice and to read the relevant product disclosure statement in full before making an investment decision. Voldetailed 5 Issue 2 38 you to obtain


IP Rights in China: Part of your Business Plan By Dr Chris Vindurampulle Patent & Trade Mark Attorney, Watermark Intellectual Asset Management

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he Australian Government’s “Australia in The Asian Century” White Paper places Australia-China relations directly into mainstream discussions. Nevertheless, Australian companies continue to approach protecting their IP in China with some trepidation. Given China’s reputation as being a hotbed for counterfeit and pirated products, this is to be expected. However, as IP has become a priority for the Chinese Government, protecting IP rights should become a priority for Australian companies looking to do business in China. China’s 12th Five Year Plan (2011-2015)

emphasises innovation. The plan appears to be working. China filed the most patent applications globally last year, leading the world in an indicator that can be used to measure innovation. On average, 1.1 million trade mark applications have been filed in China per year since 2010. This is in stark contrast to the number of trade mark applications filed in Australia during the same period which is about 15 fold less per annum. The Chinese Government has also seen the importance of strengthening its laws governing the enforcement IP rights. Surprisingly, plaintiff ‘wins’ in IP infringement cases in China

have been, on average, about 80% per annum since 2006. Continued tweaking of IP laws by the Chinese Government, and the introduction of cheaper administrative enforcement regimes, will only strengthen the protection of IP rights in China. Australian companies can no longer ignore the potential for doing business in China. And while certain obstacles may arise in navigating China’s IP system which may not arise in other jurisdictions, such as Australia, getting the right advice to ensure the protection of IP rights in China will be essential for successful Australia-China business relations.

IAM: partnering with you to protect your IP rights Watermark are Patent and Trade Mark Attorneys and Intellectual Property Lawyers providing Intellectual Asset Management (IAM) services that are aligned to the commercial strategy of your business. When conducting business between Australia and China, you need to partner with someone who is up-to-date with the latest intellectual property (IP) rights issues. We can help protect your IP and turn your business ideas, brands and knowledge into commercial assets and revenue streams. Find out more. Visit www.watermark.com.au IAM: more than patents, beyond trade marks, way past IP. Fresh thinking from Watermark. Melbourne T + 613 9819 1664 Sydney T + 612 9888 6600 Perth T + 618 9325 1900 E mail@watermark.com.au B www.intellectualassetmanagement.com.au

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Contact Contact CarlCarl Jetter: Jetter: +613 +613 9650 9650 1598 1598 carlj@chinaconnections.com.au carlj@chinaconnections.com.au or Jamie or Jamie Mi: Mi: jie.mi@chinaconnections.com.au jie.mi@chinaconnections.com.au Vol 5 Issue 2 www.chinaconnections.com.au www.chinaconnections.com.au


Open Chinese Gate with Australian Wine

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ine opens doors in business and government, and nobody opens more doors with Australian wine in China than Jeremy Oliver. Since 2001 Oliver has hosted dozens of events to Chinese audiences, from Government-sponsored wine festivals to private corporate events in which companies have used Australian wine as a means to connect with their client base, more often than not around a traditional Chinese banquet. Jeremy Oliver has strong opinions on how to present wine to a Chinese audience and stresses that it’s all about

It’s not for us to tell a four thousand year-old culture like the Chinese to change their approach to dining to fit our sensibilities, and nor should we. Instead, it’s up to us to engage with Asian markets on their own terms, which may mean that we, not they, have to re-think the way we do things.

doing so on their terms, in a way they understand and appreciate. ‘There’s an epidemic of well-meaning but culturally unaware wine ambassadors all over Asia who are trying to ram western ideas of serving wine with food to local audiences’, he says, ‘with the near-inevitable result that they end up intimidating the very people they’re trying to engage with. Marketed under the banner of The Jeremy Oliver Wine School in China, Oliver’s events are able to draw from wines made by forty of Australia’s finest wineries. The events are a combination of education and entertainment, as Oliver frankly and fearlessly discusses Australia’s place in the wine world, especially in relation to such regular topics within Chinese wine circles as the classic wines of France, the merits of wine’s New World when compared

to the Old, and why Australia should ultimately become the supplier of choice to the China wine market. Oliver enthuses over the way that Chinese people quickly acquire genuine knowledge of wine. ‘I’ve never met a Chinese person that’s not an expert on food, and every Chinese understands why a fruit, fish or fowl tastes different when grown in two different places. So they all get regionality – a huge headstart with wine!’ he says. ‘Never before have I seen people want to learn so fast; they want to know everything inside your head, yesterday!’

Special offer to ABF Magazine Subscri 10% discount from Jeremy Oliver

By Jeremy Oliver , ACBW 2013 Speaker Jeremy Oliver works internationally in an ambassadorial capacity for Australian wine, having forged close relationships with Austrade and Wine Australia. He is the best-known Australian wine personality in Asia and has formed a business partnership in China with Yin Lixue of Godolphin Wine Services. He has hosted events from New York to Beijing as well as most of the leading wine events in Australia, including the Maurice O’Shea Award.

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is a unique Australian company, a brands presence in China.

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Billionaire property developer Hui Wing Mau the highest debutant on BRW Rich List By Jonathan Chancellor

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ui Wing Mau is the Chinese billionaire founder and the chairman of Shimao Property, who has made a surprise debut in the BRW Rich 200 list with an estimated $4.8 billion wealth. He is described as one of the largest property developers in Shanghai. His inclusion comes after BRW noted the Australian citizenship of the high profile developer, formally known as Xu Rongmao. It has actually been on the public record since 2004 that he holds a Australian passport. Forbes Rich List has previously noted his Hong Kong citizenship, so he presumably has dual nationality. He also retains high Chinese mainland links given

his participation in the Chinese People’s Political Consultative Conference.

garment-manufacturing business,” it was reported in 2004.

The long time Forbes and Chinese rich member, Hui Wing Mau, as known in Cantonese translation, has a Master of Business Administration from the University of South Australia secured in 2003. He undertook several property ventures in Australia in the 1990s. In 2005, The New York Times reported he had moved his family to Australia and invested in real estate in the early 1990s.

Xu Rongmao used his several years in Australia to build up his capital from real estate deals and augment his entrepreneurial skills with a distancelearning MBA from Adelaide University, before returning to China to join the boom.

In 2004 the masterful Sydney Morning Herald China correspondent, Hamish McDonald reported during the 2002-03 financial year Xu Rongmao was one of the biggest individual donors to the NSW branch of the Australian Labor Party of $100,000. McDonald further noted Shimao’s $100,000 donation to the ALP, made a month before the state election, came about as a result of a visit to Shanghai by the then Premier, Bob Carr. “All the Xu family hold Australian passports, resulting from their time as business migrants to Darwin starting in 1990, when Xu decided to move from Hong Kong, where he had been in stockbroking and then a smallish

The 62-year-old is now one of China’s largest real estate developers with more than 70 projects in progress, none known to be currently in Australia. He has rocketed into seventh on BRW’s list with an estimated wealth of $4.8 billion. He is one of 16 list members to be based overseas, up from 14 last year. The Hong Kong-listed Shimao Property Holdings, one of China’s largest real estate developers, has more than 70 projects under way, including colorful projects such as Ningbo Shimao Sea Dawn and Kunshan Shimao Butterfly Bay. Young Jason Xu told Hamish McDonald in 2004 that his Australian education had helped create a more stable, wellplanned company than most Chinese counterparts. “We have 10-year planning on how our company is going to grow,” he said. “If you have a formal education your company will be more formal. Local companies go from step one to step five and then step 10. “They miss a lot of details and find a lot of mistakes late.”

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Hotel: Futian Shangri-La, Shenzhen

FUTIAN SHANGRI-LA, SHENZHEN AN EXCLUSIVE HIDEAWAY IN THE HEART OF THE CITY

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utian Shangri-La, Shenzhen is a welcoming luxury retreat in the heart of the Futian central business district, close to the Convention and Exhibition Centre and Shenzhen Civic Centre. Shenzhen’s mass transit railway system, which links directly with Hong Kong via the Futian port, is just a minute’s walk away. The hotel also offers easy access to Shenzhen International Bao’an Airport, the Shekou ferry terminal and the city’s major tourist attractions, making it ideal for both business and leisure travellers. Testament to the hotel’s commitment to creating engaging experiences for all guests, Futian Shangri-La, Shenzhen has won premier industry awards such as the “Best Business Hotel in Shenzhen 2012” by Business Traveller Magazine Asia-Pacific and the “Golden Pillow Top 10 Business Hotel in China” by the 21st Century Business Herald. With striking views of the Shenzhen city skyline and Lotus Hill Park, the 40-storey luxury hotel features 548 guestrooms and 53 serviced

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apartments, which provides discerning travellers legendary Shangri-La hospitality, luxury accommodation, extensive catering and meeting facilities as well as recreation and spa facilities. Stepping into the tastefully appointed guestroom, guests will feel that every corner of it is meticulously reproduced to reflect Oriental tradition and yet are thoughtfully fitted for the modern traveller. Rooms are furnished with contemporary art, luxurious carpets, marble bathrooms, soothing earth-tone fabrics and sleek designs. Ranging from 45 square metres for a Deluxe Room up to 288 square metres for a suite, all guestrooms feature a desk jack panel, a 37-inch LCD television with CD and DVD players, and wireless Internet connectivity. There is also a 15-inch LCD television in the bathroom. Treat yourself to a sensational meal. Three award-winning restaurants and a bar offer a wide range of different flavours. Café Zen serves tantalising specialities from eight interactive kitchens. Each kitchen dishes out an impressive buffet spread of Asian and Western fare. Shang Garden brings the fresh and delicate flavours of Huaiyang and Cantonese cuisine that excite and stimulate your palate. Fook Lam Moon, a renowned Michelin-starred dining institution in Hong Kong, offers the best of authentic Cantonese cuisine. The hotel’s Lobby Lounge is open all day and offers snacks, pastries, desserts

and afternoon high tea with live entertainment in the evenings. Business and conference facilities at the hotel cover over 4,600 square metres, one of the largest meeting venues among Shenzhen hotels. The facilities include the 1,740-square-metre Grand Ballroom, a 500-square-metre junior ballroom, a 93-seat auditorium, seven function rooms, three VIP rooms, the

Bridal Room, the Secretariat Room, the Boardroom as well as the Chairman’s Room on level 40 for extra special events. The fully equipped gymnasium features the latest cardiovascular equipment and a multipurpose function room, while the spa offers guests private deluxe treatment suites, a steam room, a sauna, a whirlpool and a wide range of services, including massages, facials and a range of signature treatments. For the more active guest, the hotel also features a 25-metre indoor heated swimming pool and outdoor tennis courts.


Hotel: Shangri-La, Guilin

SHANGRI-LA HOTEL, GUILIN OFFERS TRUE Luxury

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pened in March 2010, Shangri-La Hotel, Guilin is the newest luxury international five star standard hotel in the city, and sets new standards for luxury and service. Located on the banks of the Li River, ShangriLa Hotel, Guilin features many city’s firsts and superlatives, including the city’s largest guestrooms, the largest state-of-the-art meeting and conference facilities, the only hotel to have a wedding pagoda and the first hotel to feature indoor and outdoor swimming pools.

Situated near Yushan Bridge, the sevenstorey Shangri-La Hotel, Guilin is a 35-minute drive from Guilin Liangjiang International Airport and a 10-minute drive from the city centre. Nearby tourist attractions include Diecai Hill, the Zhengyang Walking Street, Fubo Hill and Elephant Trunk Hill, which are 10- minute drive from the hotel. The 449-room Shangri-La Hotel, Guilin features the largest rooms in the city starting at 42 square metres, all with complimentary broadband internet. There are 17 suites, ranging from an 84-square-metre Executive Suite to the 210-square-metre Presidential Suite. The hotel also incorporates ShangriLa’s Horizon Club guestrooms and lounge, a haven where today’s traveller can experience an even higher standard of accommodation and personalised service complemented with a host of exclusive privileges and amenities.

For meetings, incentives, conventions and exhibitions, the 1,800-squaremetre Grand Ballroom, the largest ballroom in Guilin, is the perfect venue for hosting high-profile events of up to 2,000 people. The Junior Ballroom at 540 square metres offers natural daylight with a view of the picturesque Li River. With seven additional private function rooms and two dedicated VIP rooms, Shangri-La Hotel, Guilin is able to cater to a diverse range of event needs, from small private gatherings to conferences or large social events. In addition, Guilin’s first and only wedding pagoda makes the hotel a much sought after location for weddings. Shangri-La Hotel, Guilin also features a comprehensive range of recreational facilities including indoor and outdoor pools in addition to tennis courts and a health club. The hotel’s dining includes Shang Palace Chinese restaurant, which offers Cantonese, Hunan and Huaiyang cuisines as well as local Guilin specialities against a backdrop of the Li River. Li Café features live food action stations showcasing both Western and Asian cuisine, and U Bar offers an assortment of grills and beers. For business or pleasure, the Lobby Lounge is a location that offers desserts and

pastries, a Chinese influenced snack menu and high tea sets from afternoon to evening. Surrounded by lush gardens, the Pool Bar serves fresh and simple snacks and meals as well as a diverse range of cocktails and juices. For reservations and enquiries, please contact Shangri-La Hotel, Guilin on (86 773) 269 8888, e-mail reservations. slgl@shangri-la.com or visit www.shangri la.com.

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FOOD & WINE: RED SPICE ROAD

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ed Spice Road is contrastingly big and bold, and rather beautiful in a red way. There’s nothing low-key about it. The space is cleverly designed, with a long bar and a number of areas that can be used for dining, or for sitting around over a drink and a chat. Mostly the tables are large and communal, although there are a couple of smaller ones for a more intimate gathering. There are two nice surprises – a real courtyard, open to the sky and with living plants in it, and a fabulous large room dominated by an immense red lantern over a ring table. Two crescents form the ring, which can seat dozens side by side. On the style front, polished floorboards are complemented by purple upholstered walls, cheerful oriental couches, ottomans and lampshades that can only be inadequately described as spider-web spheres. Giant red lanterns and glass-panelled ceilings are set above communal tables, whose shoulder-to-shoulder intimacy really sets the tone of the space. The food is Thai, with some enterprising modern influences. The menu is designed around dishes to share although, at a pinch, you could

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order on your own. There are also really good tasting menus (minimum of two to share) for lunch and for dinner. If not the tasting menu, consider scallops with smoked trout, coriander and kaffir lime to start, and a salad with shredded chicken, mint, bean noodles, lemongrass and coconut to follow. The choices are many and the flavours are zingy, each dish having lots of lovely flavour bursts, though most are not too chilli-fierce. The drinks list includes lots of cocktails, a good range of beers, and a smallish wine list well-chosen to match the food. Melbourne’s hardly hurting for another Asian themed restaurant, but when one pops up that looks as fabulous as Red Spice Road, qualms are set aside, drinks are poured and you just get on with the task of finding out if this latest addition to the city tastes as good as it looks. John McLeay, formerly of Livebait fame, has managed with aplomb to turn his focus to South-East Asian cuisine and offers a brief but sensational menu, which reassures diners that Red Spice Road can definitely back up its style with more than a little substance. Ideal for dinner for two or a one hundred corporate clients.

Since opening in 2007, Red Spice Road has risen through the ranks to become one of Melbourne’s best restaurants. Critics hail chef John McLeay’s modern interpretation of pan-Asian cuisine and reinforce his long held reputation as one of our city’s culinary stalwarts. Situated in the heart of the city, a stone’s throw from the Bourke Street Mall and boasting Australia’s largest red lantern above a unique circular 60-seat communal table. Red Spice Road also has three unique Asian themed portraits specially commissioned by renowned Australian artist David Bromley. The menu and wine list are long and varied and the price won’t break your budget. The restaurant has several distinct areas including two private rooms, seating 22 and 30 respectively, a courtyard under the stars and skyscrapers, and a buzzing bar with an Asian themed cocktail list. There are bar specials every weeknight, as well as early bird dinner and lunch banquets for only $25 per person.


FOOD & WINE: RED SPICE ROAD

Red Spice Road QV , Opening hours: Lunch and dinner, 7 days a week. 31 – 37 Artemis Lane (Enter off Russell St), Melbourne Tel: +61 3 8660 6300 info@redspiceroad.com www.redspiceroad.com

Opening hours: Lunch and dinner, 6 days a week. 27 McKillop Street, Melbourne Tel: +61 3 9603 1601 info@redspiceroad.com www.redspiceroad.com

RED SPICE ROAD 27 McKillop Street Melbourne Tel: +61 3 9603 1601 Email: info@redspiceroad.com Web: www.redspiceroad.com

Exclusive Business Networking

under the stars and skyscrapers, and a buzzing Since opening in 2007, Red Spice Road has bar with an Asian-themed cocktail list. risen through the ranks to become one of There are bar specials every weeknight, as Melbourne’s best restaurants. well as earlybird dinner and lunch banquets for Critics hail chef John McLeay’s modern only $20 perand person. interpretation of pan-Asian cuisine and reinforce China Lunch Club will be held in Melbourne, Sydney Shanghai quarterly. It his long held reputation as one of our city’s provides a vibrant and environment for C-level executives to share their China hours: culinary knowledge stalwarts. and experiences. China LunchOpening Club Membership now available. Lunch and dinner, 7 days a week. Situated in the heart of the city, a stone’s For all enquiries contact: +61 3 8689 9898 or info@abforum.com. au throw from the Bourke Street Mall and boasting Australia’s largest red lantern above a unique circular 60-seat communal table. Red Spice

China Lunch Club


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Flight: China Southern Airline

Canton Route to China and the world

China Southern Airlines is undergoing rapid global expansion and Australia is leading the way by developing and initiating product enhancements during a time of exciting change for one of the world’s largest airlines.

A

lthough we are the largest airline in China it’s only in the past three years that we have really expanded our international route network and developed our global presence.

opened new Australian ports including Perth and Cairns and, as we aim for 55 weekly flights by 2015, we continue to consider additional Australian destinations.

A380 superjumbo and during the year we look forward to taking delivery of the first of 10 Boeing 787 Dreamliners we’re planning to operate on key routes. But It’s our comfortable

The success of our Canton Route from Australia and New Zealand to London and Europe has been so overwhelming that we extended the concept to all flights that operate via our southern Chinese hub of Guangzhou, formerly known as Canton.

A330-200s with flatbed comfort in business class and personal screens throughout, that we most look forward to bringing onto our Australian routes from next month.

In coming months we will offer our first direct flights from Guangzhou to Moscow and increase Delhi services to double daily as we continue to bolster our Canton Route to the World. Our ever-expanding fleet has grown again with the delivery of our fifth

Although China Southern Airlines has been flying “down under” since the start of the new millennium, it’s only these past few years that the airline’s Kapok flower tail-fin has really begun making its mark on the Australian landscape - and we look forward to welcoming more Australians onboard to sample our true Cantonese hospitality on their next overseas journey.

Australasia has been one of our key targets and we’re thrilled with the swift growth that has seen scheduled services rise from just seven in 2009 to 45 return flights per week during the summer peak of 2013. To meet the increasing demands of business and leisure travel between Australia and China, we have recently

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ABF Magazine May Issue  

This month’s issue offers China insights achieved from the recent Australia-China Business Week Shanghai, which hosted 60 Australian delegat...

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