What Does China Mean to Us? A Look in 2006 into the Shared Future of China & South Australia

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What Does

China’s Growth

Mean to Us?

15. November 2006



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When We Were Kids�

�China was a sleeping giant



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Very Much Awake In the Meantime



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A Look into the Crystal Ball

China will become wealthier• More money for SA products

• Basic materials - copper, steel, coal

• Vegetables, fruits and nuts

• Wine

• More money for Australian quality of life

• Holidays

• Education

• Retirement in SA?

• More money to invest in Australia

• To qualify for visas and citizenship

• To hedge their bets

China will continue to expand its manufacturing dominance• Automotive, general manufacturing, and low-tech items

made in Australia will be increasingly threatened



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All is not Gold�

Certain problems in China will worsen

• Gap between the “haves” and the “have nots”

• Civil liberties (religious freedom & political plurality)

• Corruption

• Piracy

• Water management

• Environmental impact of China's growth

• China's cost base will change as it matures



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Implications: Manufacturing & Distribution

Changes to Expect

• Chinese manufacturers will work

up the value chain

• Chinese will look to invest in

SA businesses

• Specialised, niche companies in

SA will increase sales to China

Implications

• Non-specialised SA manufacturers will continue to battle to survive

• Local companies with SA expertise will be attractive partners for Chinese

• Proactively seeking trustworthy business partners in China will pay off

• Success will come from focusing on strengths:

• Mass or commodity-type production in China

• R&D, complex or critical manufacturing or services in SA



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Implications: Travel & Leisure

Changes to expect

• More Chinese tourists to SA

• Herd mentality of Chinese tourists will slowly diminish

• Expectations of Chinese tourists will change –

more diversity

• Exclusive tours will be seen as status symbol -

Penfold’s Grange and the lot

Implications

• Adjustment of existing offering to match

Chinese tastes & interests

• Need for direct flights from Adelaide to major PRC cities

• Buying up of our comparatively "cheap" club memberships

• Ability to offer services in Mandarin will be critical

• Discovery of high quality of life in SA will lead to

more long-stay visitors



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Implications: Financial Services

Changes to Expect

• More Chinese investors in SA

• Baby boomer Aussie business owners

selling out to Chinese investors

• Chinese clients splitting time between

China & Australia

Implications

• Need for understanding of the Chinese business approach

• Involvement of family and friends

• Trusted partners expected to supply a wide range of support

• Strategic approach

• Work ethic / tenacity

• Demand for increased flexibility while maintaining professional standards

• Consolidation of global accounts: need to understand offshore systems

• Ability to offer services in Mandarin will become critical



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Implications: Health, Education & Personal Care

Changes to Expect

• More Chinese patients / clients

• More transient population (students,

holidaymakers, seasonal visitors)

• Spiralling overall heath care costs

Implications

• How to bridge Chinese expectations with Australian way of educating

and providing health and aged care?

• Increased demand for Traditional Chinese Medicine (TCM) care –

from Chinese and Australians

• More and more medical supplies coming from China

• Pressure to reduce health care costs – Chinese suppliers, offshoring

• Flexibility in fees and billing to serve non-Medicare patients

• Ability to offer services in Mandarin will become important



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Implications: Media

Changes to Expect

• Growth of specific sectors exporting

to China (mining, livestock, produce)

• Increasing interest of Chinese language

and culture in Australia

Implications

• Need to understand how increased

dependency on China affects local

business and citizens

• The role of media in interpreting

international developments for

the local audience



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Implications: Resources & Environment

Changes to Expect

• Continued strong growth of the mining industry

• Population increase in SA, if only transient

• Increased demand for Australia's unique flora & fauna

• China’s environmental mismanagement will continue

Implications

• Increased pressure to balance tourism revenues with

environmental management

• Role as communicator between factions will become more important

• Will Australia be affected by China's poor environmental management?



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Some Concluding Thoughts

• Remember that every challenge

brings opportunity

• Embrace the change, focus on your

strengths and figure out what China

means for your business, your job,

your family

• Seek more information and

be wary of xenophobia

• Visit China - see it for yourself

• Consider encouraging your children

and grandchildren to learn Chinese

• We certainly have more to gain than to lose as China becomes

more prosperous and a full member of the global economy

What Does China Mean to Us? A Look in 2006 into the Shared Future of China & South Australia

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