'Invest in Australia' Mission

Hong Kong & China 2015

Our 2015 'Invest in Australia' Mission is designed to source, attract and develop relationships and partnerships with Chinese investors, entrepreneurs and business leaders for investment, trade and/or migration purposes. Join us in Hong Kong and Guangzhou from 18 - 23rd of January 2015.

For more details, please download the information flyer and register your interest here

LIMITED TIME OFFER: Book before 30 September 2014 and receive $500 of the standard registration price (excluding GST)

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Our address:
Suite 33, Level 3,
International House
104 Bathurst Street,
Sydney, NSW 2000

Tel: +612 9267 1488
Fax: +612 9475 4357

Alliance Partner China HR


Alibaba: History in the making

As Jack Ma, the founder of the largest e-commerce company in the world – Alibaba – travels around the US, Europe and Asia on an Investment Roadshow prior to the listing of Alibaba on the New York Stock Exchange, investors all around the world are taking a step back to look at Alibaba’s growth journey. Alibaba is now bigger than Amazon and eBay combined and growth is set to snowball. In fact, the Alibaba ecosystem isn’t just Amazon, under its umbrella sits China’s equivalent of Dropbox, PayPal, Hulu, ING Direct, Uber and much more… Just 15 years ago, when Alibaba was in its infancy, Jack Ma travelled to the Silicon Valley to raise US$2 million from Venture Capitalists, only to walk away empty handed.

Now, Alibaba is pitching to the world’s most savvy investors to raise up to US$21.2 billion dollars, the largest technology or internet related offering in history, which would value the company at over US$160 billion. To give you an indication of size, the largest IPO ever was that of the Agricultural Bank of China which raised US$22.1 billion in July 2010. The price range for Alibaba stock, set by the company, is $60-$66. Analysts have commented that the lack of fluidity in the governance structure (Ma still controls the board) will be priced in as a discount, but nevertheless, the growth opportunity remains enormous in the short term.  Other analysts argue that with Alibaba maintaining control of the board and its appointments will protect the long-term investors from the speculators and short-term investors.

Alibaba holds an 80 per cent market share of China’s e-commerce market and has its eyes set on the global stage. A core part of its business is e-shopping platform, Taobao, which accounts for over 90% of online consumer transactions in China. Some see Alibaba becoming the world’s second Amazon, yet Alibaba distinctly sees itself as a platform for small businesses to do business around the world with China as its primary market. Alibaba’s model is that of a marketplace – connecting buyers and sellers, whereas Amazon’s is a merchant model – owning the stock – the questions arises as to whether as the Chinese market matures, whether the marketplace model will give way to the merchant model which has been so successful in the US.

There is no doubt that the e-commerce and consumer spending story in China will be a fruitful one and Alibaba will provide a well-regulated gateway for foreign investors to tap into the Chinese market. China has over 600 million internet users, over half of which shop online  - as both these numbers grow to equivalent Western ratios – we will see unprecedented growth fuelled by the sheer size of the Chinese market and the rise of the wealth amongst Chinese consumers.

With lots of debate surrounding the IPO, the question still remains – is the Alibaba investment opportunity too good to be true? With its strong track record and ability to innovate on scale at speed, Alibaba will keep sending ripples through the world’s market.


What can PNG learn from the BRIC countries?

This week I enjoyed the opportunity to speak at the PNG Advantage Investment and Infrastructure Summit 2014, a gathering of the local business and international investment community to explore opportunities, challenges and threats for PNG, a country richly endowed with natural resources, including mineral and renewable resources such as forests, marine, food and agriculture.

I was given the honour of speaking straight after the Prime Minister, The Honourable Peter O’Neill (pictured with me above) on the topic of “What can PNG learn from the BRIC countries”, a rare and unique opportunity to influence and/or support the political process, so here follows a quick summary of the five main points I offered the PNG Government:

1. Choose your friends carefully

The BRICS Leadership Group is a great example of five countries, with very little natural geographical, cultural or historical ties, coming together to focus on mutual opportunities and challenges. I was interviewed by the Conference Organisers, Business Advantage PNG, on this topic in the days before the Conference (click here to read the article) and highlighted the remarkable achievement of establishing the BRICS Development Bank as their response to the collective view that the IMF, World Bank and other western influenced institutions are not doing enough to support and invest in developing countries.

PNG is a member of many groups and forums, including APEC, the Pacific Islands Forum and CHOGM, and has strong relationships and historical ties with Australia, New Zealand, Malaysia and the Philippines, amongst many others. My advice to PNG is to think hard about the countries that can and/or will have the most impact on their future direction and progress, and work hard to establish a tight knit group of like-minded leaders who meet regularly to make things happen. This can be achieved (as with the BRICS) without upsetting or excluding other countries who are important from a trade or investment perspective.

2. Attracting Foreign Investment

China is the most significant investor in the region and with a well developed “Going Out” strategy to focus on energy and food security, PNG is very well placed to attract substantial investment from China, particularly in the mining, resources, food and agriculture sectors. Australia has achieved great success in attracting investment from China and appears well placed to attract much more as China looks to invest in the food supply chain.

PNG has a chequered history with Chinese investment, with local stories of cultural misunderstandings, poor execution and even corruption, and is perhaps not focusing as much on China as as it should. I encouraged the Governor of Port Moresby (who was sitting to my right) to work hard on their sister city relationship with Jinan in the province of Shandong (he mentioned that he would be leading a delegation there in October) and the PM to make regular visits to Beijing.

3. Accelerate PNG’s Urbanisation program

I mentioned the importance of Urbanisation as a driving force for economic growth and expansion (urban growth alone produces an increase of 20% GDP per capita). It increases rural productivity, boosts demand for resources, commodities and energy and drives domestic consumption (urban residents spend 3.6 times more than rural dwellers). Just on PNG’s doorstep, Indonesia is the fastest urbanising country in the world and is witnessing growth in the numbers of middle class consumers, and all of the BRICs are benefiting from rapid urbanisation, notably China and India.

By contrast, PNG is a rural and agricultural economy with only around 18% of the population currently living in urban centres. Furthermore, Port Moresby, PNG’s capital, is ranked as the world's third worst city for liveability by The Economist magazine, with 50% of the estimated population of 700,000 living in slum-like conditions. PNG towns and cities are under major stress from unmanaged urbanisation and, unless properly managed, quality of life issues including urban security, customary land development and affordable housing issues will further deteriorate.

In 2010, the Government of PNG adopted the "National Urbanisation Policy 2010-2030" which is intended to guide the urbanisation process in Port Moresby, as a model for the management of urban development in PNG over the next 20 years. My advice was to speed up this process.

4. Stability is the key

I used Brazil as a good example of how political and fiscal stability can lead to substantial economic growth by comparing two periods in Brazil’s recent history:

From 1980 to 1994 (14 years):

• 5 presidents

• 15 finance ministers

• 14 CB presidents

• 6 currencies

• 730% average annual inflation

• Inefficient public sector

• Closed economy

• Balance of payment crisis

• Incipient monetary policy

• Fiscal mess

From 1995 to 2010 (15 years)

• 2 presidents

• 3 finance ministers

• 5 CB presidents

• 1 currency

• 7% average annual inflation

• Privatisation

• A more open economy

• Lower external vulnerability

• Inflation targeting

• Improved fiscal policy

During the latter 15 year period, two popular and reforming Brazilian Presidents, Fernando Henrique Cardoso and Lula Da Silva, created political stability which led to an increase in domestic confidence, an influx of foreign investment and a period of strong economic growth which has propelled Brazil to the top table of economic giants.

My advice to PNG is to become a beacon of political stability amongst the Pacific Islands, and the region as a whole.

5. The Importance of Planning

I cited China as an example of a planned economy which benefits greatly from the existence of a well developed Five Year Plan but, more importantly, a long track record for having met and exceeded almost all of the targets, milestones and objectives outlined in each of the 11 Five Year plans over the past 60 years.

Like many western democracies, PNG has a big vision of what it would like to become and a high level plan of how it will get there. The PNG Government's long term “Vision 2050” and shorter term policy documents and white papers, including the 2014 “Responsible Sustainable Development Strategy”, emphasise the need for a more diverse economy, based upon sustainable industries, improved infrastructure, the development of SMEs and greater collaboration with foreign investors and the private sector. These grand plans are admirable and necessary but my advice was to gain a reputation for not just having a vision, but for execution, implementation and deliverables. I don’t think anyone would disagree with that!

I enjoyed my brief visit to PNG, including a brief but enlightening tour of Port Moresby with the local CEO of the Port Moresby Chamber of Commerce & Industry, David Conn, and I hope to go back again one day to see how much has changed. From talking to the locals, its hard to come away without the impression that PNG is going places, and as hosts of the Pacific Games 2015 and the APEC Summit 2018, it seems we’ll all be going there soon!


Australia in the Asian Century

For the first time in its history, Australia finds itself located in the right place at the right time - in the Asian region in the Asian century. Every Australian entrepreneur, investor, business leader, and organisation has an opportunity to take advantage of the changing dynamics within our region by leveraging the new opportunities created by rapid developments in urbanisation, consumption and innovation. Asia’s emerging middle class of aspirational consumers offers opportunities in many areas where Australia leads the world, particularly in food, agriculture, healthcare, education and tourism, not to mention mining and resources which has already prospered from Asia’s urbanisation program.

However, this is a challenging time for many Australians as we contemplate our colonial past (with the UK and Europe) our special relationship with the USA (which is mainly based on strategic military ties and diplomatic collaboration) and our trading future with Asia (particularly China, Japan, Korea and Indonesia). These are unique challenges for our political and business leaders to grapple with as we re-think the position of “Modern Australia” a bold new multi-cultural society seeking to find its way in the Asian Century.

The future prosperity of Australia must surely depend on our ability to strengthen and deepen our relationship with China, the next global economic super-power and the economic engine of the Asian region. China is “modernising” not “westernising” and is barely recognisable from the country that emerged from communist rule in the late 70s and opened up to the world in the 80s and 90s. Now a world leader in technology, clean energy and high end manufacturing with the ability to innovate at speed on a scale never seen before, China’s processes, regulations and logistical networks are now highly sophisticated and their markets have become more transparent and accessible to foreign companies and businesses.

So far, Australia has been slow to take advantage, and nervous to participate, almost as if we don’t fully trust China’s ability to keep everything going. We saw Japan prosper and then falter in 1991. Now we worry about whether we can deepen our trade relationship with China whilst maintaining our military ties with the US.  What would we do if we had to make a choice?

In my view, we worry too much about these things. Australia is a traditionally conservative society and has never been good at accepting or adapting to change. Political leaders are too scared to make bold long term reforms due to a three year election cycle and, despite many attempts, referendums have never succeeded in passing bold constitutional reforms.

As with our past, our future depends on our ability to welcome immigrants to Australia so as to accelerate our participation in the Asian Century. The Asian-Australian community is already strong and growing, and can play an important role in building bridges between our colonial past and Asian facing future. Success in Asia depends on our ability to master a number of complex and unfamiliar challenges, in particular differences in language and culture, and the need to build trusted relationships, local knowledge and to access new sources of capital. “Old Australia” will never be able to do this without the support and assistance of “New Australians” with Asian backgrounds, experience and connections. It’s time to open our doors to Asian skilled migrants, develop new innovation hubs in regional centres (not in over-crowded cities straining from creaking infrastructure) and bring Asia to Australia. This approach has worked well in the past and can transform our future.

Are we bold enough to give it a try?


Mongolia: a leading frontier market

Overshadowed by China, Mongolia has quietly emerged as the fastest growing economy in the world. Expected to grow at 15.3% in 2014, its economy has many burgeoning industries with rapid growth rates and untapped resources. As a nation powered by its abundance of natural resources (large deposits of copper, coal, molybdenum, tin, tungsten and gold) Mongolia’s government is looking to reduce its reliance on natural resources and develop other sectors to ensure long term sustainability. As a result, sectors such as property development, renewable energy and mining present unique global investment opportunities. Mongolia’s story of rapid growth and urbanisation is a distinct one – that of an emerging frontier and a market for business and investment - it may not only be the world’s fastest growing economy, but also the world’s best kept secret.

Mongolia’s story

Mongolia became a democracy in 1990 after almost 80 years of communist rule since its independence in 1911. Its story and growth has been very low-key compared to the spotlight that has been shone on the rest of the region. With a population of almost 3 million and approximately 30% of its population living nomadic or semi-nomadic lifestyles, Mongolia is still at the early stages of the growth cycle and maturation, a new investment opportunity for those who can take a long term position.

The reason most people haven’t heard about Mongolia’s rapid growth story is that its GDP is only around USD11billion. To put that in perspective, the economy of the City of Newcastle in FY2012-13 was roughly the same, AUD12.4billion and Sydney’s economy alone was AUD319.5billion. Its capital, Ulaanbaatar (UB), is home to 1.1 million people and has seen property prices in the city centre grow on average 30% in 2013. In addition, overseas visitors to Mongolia are expected to grow by 50% to 700,000 by 2024. Currently, over 50 Australian companies have a presence in Mongolia including Rio Tinto, Xanadu Mines, Leighton Holdings, McMahon Holdings, Minter Ellison, Macquarie Bank and WorleyParsons. Many respected commentators have said Mongolia’s fundamentals are strong as ever and numerous fortunes will be made in the next decade in Mongolia just as they were in the last.  Although prone to climatic, political and economic cycles, Mongolia’s overall trend is very positive.

An emerging frontier

Mongolia is one of the world’s last frontiers for investors to benefit from continual and rapid double digit growth. With over USD10billion currently committed to infrastructure and mining projects – the economy shows no signs of slowing down.

Mongolia’s strength is the sheer speed of its growth – the equivalent to Australia’s annual growth rate in one month. Also, what separates Mongolia from other high-growth markets such as those in the Middle East, is that it is both safe and politically stable. Its competitive advantage in the natural resources space is its location, its strategic neighbours China, Russia, Kazakhstan, will see Mongolia be able to competitively ride the highs and lows of the commodities market prices.

Mongolia is currently seeking investors in mining, energy and transport infrastructure to finance the US$50billion of mega projects planned by the government over the next 10 years. Chinese companies are currently negotiating to invest in a US$2billion highway connecting Russia, Mongolia and China. China is currently Mongolia’s biggest foreign investor, accounting for over 30 per cent of its FDI and controlling over 5,000 companies operating in Mongolia, mostly commodity exporters. A key pillar in the future growth of the Mongolian economy is investment. Today, foreign direct investment accounts for over half of the nation’s total GDP and the government is striving to attract more FDI to stabilise and secure their nation’s economy and social development. So, where are the potential opportunities?

1. Property

Mongolia’s property market is more liquid than its equity market and an increasingly popular destination for FDI in Mongolia.  For conservative investors, real estate presents an opportunity in Mongolia, which does not distinguish between foreign or domestic investors in the real estate market, protecting the rights and interests of everyone. In addition, laws that prevent expropriation, eviction or confiscation are strongly enforced and protected by property laws and the constitution of Mongolia. In addition, demand will be stimulated by a recently implemented mortgage policy which reduces interest rates from around 20% to 8% which will see GDP per capita increase to USD$6,000 from USD4,000 and further increase the demand for property.

2. Clean Energy

As part of its move away from a reliance on non-renewable energy, Mongolia’s renewable energy industry is a priority for the government. In fact, Mongolia’s first wind energy system, called Salkhit Wind Farm (31 turbines), located 70km Southeast of the capital, was opened by one of Mongolia’s largest conglomerates, Newcom in partnership with GE, EBRD and the Dutch Development Bank in July 2013. This marks the first major step to a sustainable future, generating approximately 5% of Mongolia’s energy needs, reducing pollution and improving stability in a country heavily dependent on fossil fuels.  The companies involved plan to transform Mongolia into one of Asia’s renewable energy centres. Potential growth in this sector is enormous, with Newcom’s estimating that Mongolia’s southern province alone possesses enough wind energy potential to power the entirety of China, that is, more potential than any other country in the region. More specifically, the Asian Development Bank claims Mongolia holds approximately 1.1 terawatts of potential capacity in this area.  Mongolia’s government has even showed interest in the concept of an “Asian Super Grid” – a massive energy grid that connects the majority of Asian nations who would supply the grid with the energy needed to function properly.

3. Mining

The oldest and largest destination of foreign direct investment in Mongolia, Mongolia’s mining sector presents vast opportunities for investors. In fact, there is estimated to be approximately USD2trillion worth of mining commodities still in the ground and it would be no surprise if Mongolia’s GDP reached USD100billion in the next ten years. With the world’s most rapacious consumer of natural resources on its doorstep and an abundance of natural resources, Mongolia has been described as the “Saudi Arabia of Asia”. In such a position, there is every reason to believe that Mongolia’s growth boom is sustainable. In 2010, FDI inflows to Mongolia were just US$1billion, rapidly reached $4.7billion and $4.4billion in 2011 and 2012, respectively. Most of this investment went into the mining sector.

Mongolia’s story is not all one of high growth numbers and glowing statistics, it also has a number of challenges along its growth trajectory including:

  1. Inflation: Mongolia’s rate of inflation is concerning reaching 13.7% in May 2014. Government spending as a percentage of GDP was 14.1% in 2012, significantly reduced from the years in the early 1990s where levels left investors sceptical as to whether such a stimulus was justifiable or sustainable.
  2. Quality Control: The real estate market has huge growth potential but the average lifespan of a building in Mongolia is about 20 years (at most) as buildings are currently built at low cost and poor quality.
  3. Infrastructure: Mongolia’s infrastructure sector is experiencing  growing pains as the government tries to control development. The City of Ulaanbaatar council will not be giving out new heating permits for non-residential construction until 2016. This may mean a number of some soon-to-be opened apartment complexes will lack heat and power failures may be a regular occurrence.
  4. Equity: The Mongolian Stock Exchange has a capitalisation of approximately $2billion and there are more than 300 companies listed on the exchange. Mongolia’s equity market is in its early stages of development, securities regulation is still extremely new and untested and liquidity in the equity markets is low, with the entire stock market’s trading volume a mere $50,000 to $100,000 per day. However, many investors have avoided the potential risk and exposure by investing in companies on the ASX whom have operations in Mongolia.
  5. Pollution: Mongolia’s capital, Ulaanbaatar, was ranked as the world’s second most polluted city mainly because of the coal fired power stations and coping with extreme winters. During winter pollution levels are six to seven times higher than the WHOs highest acceptable limits.
  6. Agriculture: Under the Soviet Union between 1921 and 1990, Mongolia’s transformed from a nomadic nation to an industrial agricultural exporter. The fall of the Soviet Union resulted in a sudden crash of its food industry which left farmers in a newly privatised market economy. As a result of subsequent overgrazing of land and oversupply of livestock, Mongolia has a 78% desertification rate of the country’s arid lands today. Consequentially, the country is now quite dependent on its import of dietary staples such as wheat, potato and milk.
  7. Government regulation: At the centre of a long term dispute between Rio Tinto and the Mongolian government is a $6.6billion Oyu Tolgoi copper mine. Rio Tinto has been in an extended dispute with the government over the revenue sharing arrangements and restrictions around sending profits overseas. As a result, Mongolia’s government greatly undermined foreign investment and left investors nervous at the restrictive and unpredictable nature of Mongolia’s investment regime, causing foreign investment to plummet.
  8. Foreign Investment Laws: In 2012, the Mongolian government introduced new laws surrounding foreign investment which saw FDI decrease by over 50%. However, recent revisions of the law after much negative backlash stemmed the extent of the damage. A new law implemented in October last year saw an end to different rules for foreign and domestic investors and a simplification in investment approval processes for foreign investors.

So why Mongolia? As the fastest growing democratic and politically stable country in the world, Mongolia presents an opportunity for foreign investors to gain a foothold in one of the world’s last emerging frontier markets.  Although challenges remain, there is no doubt that the Mongolian story will capture the eyes and ears of international investors, business leaders and entrepreneurs from around the world.

        I.            has a capitalisation of approximately $2billion and there are more than 300 companies listed on the exchange. Mongolia’s equity market is in its early stages of development, securities regulation is still extremely new and untested and liquidity in the equity markets is low, with the entire stock market’s trading volume a mere $50,000 to $100,000 per day. However, many investors have avoided the potential risk and exposure by investing in companies on the ASX whom have operations in Mongolia.


China’s Priorities: Education, Healthcare, Tourism

China’s 12th Five Year Plan (2011 – 2015) made some bold statements about the importance of education, healthcare and tourism to transform their services sector and improve the quality of life for the middle and upper classes. Western economies, particularly Australia, are currently benefiting from China’s shortcomings in these three areas as can be found from recent statistics:

  • There are currently 150,000 students from mainland China studying at Australian universities, making up 28.5% of our total international student numbers and only 12% of China’s outbound international students. This number is expected to reach over 220,000 in the next ten years.
  • Australian Tourism reports that there are currently 700,000 tourists from mainland China visiting Australia in 2014 and this will rise to one million by 2020
  • Over 10,000 Asian tourists travel to Australia for medical reasons, requiring treatment, care and/or surgery from Australian hospitals and healthcare facilities, spending over $26 million per annum. A recent Deloitte survey looking at the opportunities in medical tourism, noted that 8% of Chinese tourists travel to other countries for medical care.

As with all things in China, when the Government makes a plan to do something, and takes it seriously enough to state it as a priority in the Five Year Plan, you can be sure that serious and concerted action will follow, and this is exactly what’s happening in each of these three areas:

1. Education

As everyone knows, China’s education system was effectively shut down during the Cultural Revolution (1966 – 1976) and a rising generation of students, academics and teachers were lost forever. Today’s education system was re-born in 1986 when the Chinese Government passed a new education law, making it compulsory for all Chinese children to attend school for at least 9 years. Today, China’s education system is the largest in the world, with 99.7% of the population achieving the nine-year basic education and over 20% of students going on to attend higher education.

Over 9 million students took their National Higher Education Entrance Examination this year and many choose to complete their studies overseas (US universities report that there are 235,600 Chinese students studying in America comprise nearly 29% of all foreigners enrolled in US higher education, a number which has increased by more than 21% over the past 12 months). With over 150,000 students enrolled in Australian universities, education has become Australia’s top services export and fourth largest export overall, behind iron ore, coal and gold but ahead of tourism, natural gas and crude oil.

But China now has plans to fight back, to retain more of its own students and to attract foreign students aswell, transforming itself into an ‘innovative economy and an education hub'. The Ministry of Education has publicly declared its ambition to increase the international student population in China to reach 350,000 students by 2015 (currently 260,000) and 500,000 by 2020.

China’s growing middle class places a high value on study and high quality education and, despite the Government’s commit to invest in the education sector, demand will continue to outstrip supply. Australia’s education sector is uniquely positioned to participate in the development of China’s education system by providing access to world class teachers and educational platforms, plus specialised IT systems for on-line delivery, remote access to learning materials and flexible program delivery modes. With a huge gap between future skill needs and current skill levels in vocational training, China’s vocational industry is growing rapidly and is likely to dominate the world stage in the future, encouraging foreign students to study in China. With China as our largest source of international students, contributing approximately AUD 4 billion to our economy, Australia can’t afford to be complacent.

2. Healthcare

China has become significantly more conscious about the importance of health, food safety and medical services as a result of some of its well publicised challenges:

  • rapid urbanisation
  • an ageing population
  • pollution and environmental degradation, leading to severe concerns about food safety, air quality and water sanitation
  • changing diets and lifestyles, leading to a sharp increase in western style health problems and diseases (for example, the number of diabetics in China has doubled in the last 5 years to over 100m people)

China’s public hospital system, which in many areas is antiquated and under severe pressure, suffers from a lack of funds compared to more developed countries. The Chinese Government allocates only 5% of its total GDP to the provision of healthcare services (hospitals, medication, equipment, drugs etc.) which is less than half of most western countries and one-third of the US, but this is expected to rise to 7%, representing a public healthcare sector of over US$1 trillion by 2020. At the same time, its encouraging the development of new privately owned healthcare players and providers with a plan to double the number of private hospitals and facilities by 2020.

The current five year plan identifies the bio-technology and bio-medical sectors as the key strategic innovative industries of the future. Multi-national companies are identifying significant opportunities to participate in the demand for world class expertise, knowledge, products and services in many areas:

  • Diagnostics and Treatments
  • Pharmaceuticals and Health Supplements
  • Medical equipment and devices
  • Physician and Patient education

Whilst starting from a fairly low base, the growth in demand in these areas is expected to rise by over 20% per annum for the foreseeable future.

With over 300 million people still to be urbanised, and more than 500m people expected to enter middle class income brackets in the next 30 years, China’s healthcare sector represents a major growth opportunity for foreign and local players. Our recent visit to the headquarters of Lancare, one of China’s fastest growing private healthcare players, is a great example of how the landscape is changing. Click here for more details.

3. Tourism

When I first visited Beijing in 1989, I was surprised to find myself virtually alone in the Forbidden City with only a small handful of foreign tourists and virtually no locals. Back then, Chinese people couldn’t afford to travel even within their own country and, in any case, travelling domestically was discouraged and in some cases even prohibited. How much has changed! The local tourism sector in China has increased at a steady rate of 10% per annum since then and now there over 2.5 million local domestic tourists and approx..129 million visiting foreigners.

China’s Tourism sector is already experiencing the benefits to employment, consumption and the economy from a thriving domestic tourist sector but it has to make a dramatic leap to cope with the expected ‘tsunami’ of foreign tourists expected to flood into China in the next few years. According to the World Tourism Organisation, there will be an annual increase of 43 million foreign tourists visiting China over the next 20 years, with a total of 1.8 billion by 2030! These numbers are staggering even by Chinese standards!

In order to rapidly build and develop its local tourism sector to cope with future demand, China will be paying close to attention to the experience of their own people when travelling overseas. According to the Economist “nearly one in ten international tourists worldwide is now Chinese, with 97.3m outward-bound journeys from the country last year, of which around half were for leisure”.  Australia is experiencing a strong increase in the number of Chinese tourists and this is highlighting some of the shortcomings in our own tourist sector which is having to adjust to the cross-cultural challenges of dealing with mainland Chinese tourists.

Australia’s world-class reputation as an iconic tourism destination provides unique opportunities for Australian tourism operators and service providers to export their capabilities, products and services in IT operations, customer service and engagement, logistics, systems and product offerings to China. With over 1300 operating travel agencies in China, there is considerable scope for joint ventures, alliances and partnerships. Since China’s opening up in the 1970s, China’s growth as a tourism market has been phenomenal, now the third most visited country in the world. Australia’s expertise and capabilities can play a dominant role in the successful and sustainable development of China’s tourism industry on a global scale.