Sustained economic growth, coupled with a rapid market transformation and a series of government reforms, mean China – the world’s second-largest economy – is no longer just a country for low-cost manufacturing. It is also an increasingly attractive destination to do business for Australia’s service providers.

 

According to statistics from the World Bank, for almost every major developed country in the world, the proportion of value-added services in GDP and the percentage of service-related employees in the total employment are both beyond 70 percent; however, for China, these two indices both average at 43 percent.

 

In other words, there is immense potential to develop the services economy in China. The Chinese government recognises this and has set out to increase the contribution of the services sector to 47 percent by 2015.

 

The vast majority of AustCham members are in the services sector. The challenge for the many small-to-medium sized firms is to build a reputation, and a sustainable competitive advantage, in a highly contested market.

 

Work done by Austrade in several industries has demonstrated that combining forces in a sector (clustering) can be a powerful way for firms to compete successfully in these markets.

 

Benefits include the opportunity to share ideas for innovative new products or services, build networks, enjoy stronger bargaining power, and join together to provide complementary services when bidding for major projects.

 

The benefits to Chinese clients and customers around having access to integrated solutions can be an important competitive advantage for these firms.

 

Much is said about the advantages of collaborating or forming partnerships with Chinese counterparties, but collaboration between Australian services providers can also play an important role in improving Australia’s business engagement in China.

 

To find out more about services opportunities and strategies, stay tuned for the China (Beijing) International Fair for Trade in Services at the end of May. Australia’s Trade Minister, Hon Craig Emerson, will be a key speaker and many Australian services providers are expected to attend.

 

Chamber activity

 

The first half of the year has been an action-packed one with a number of new programs and initiatives to meet the diverse and growing needs of our members.

 

The launch of the Government’s White Paper on Australia in the Asian Century brought together a strong representation of members in Beijing and Shanghai to discuss and debate issues around Australia’s role in the region in the decades ahead. The joint submission is a considered one and I commend it to you. A copy can be found at www.austcham.org.

 

Other important initiatives that are underway include the second annual Financial Services Issues Paper and a Business Roundtable with the Minister for Climate Change and Energy Efficiency, Hon Greg Combet in April. In May, we will hold an important presentation and panel discussion with Chinese officials on policy issues affecting Australian business in China.

 

On the social front, our new monthly Kooka networking event has been a huge success with over 150 people turning up for our first events. The major event was our annual Australia Ball in March. With an attendance of 630, fantastic music and great entertainment, the Ball surely retained its crown as the premier event in Beijing’s social calendar.

 

As always, we look forward to supporting our members and welcoming new members. Through the Greater China platform and our own Chamber, we aim to provide government advocacy, information, networking and business support services to Australian companies in China, helping them to succeed.

 

David Olsson

Chairman, China-Australia Chamber of Commerce, Beijing ■