Asian Financial Forum 2015, Hong Kong

Interested in expanding your knowledge, understanding and connections in Asia? Looking to raise capital from China for business expansion, migration or other purposes?  Our annual Australasian Mission to the Asian Financial Forum to Hong Kong and China is the perfect start to your New Year. Please download the list of delegates in 2014 and watch the highlights of our mission via Think Global with David Thomas - February 2014.

For more details, please download the expression of interest form hereregister your interest here or via reply via email

Join us in Hong Kong from 18 - 22nd of January 2015 - we have so much to offer Asia in financial services and investment and yet I still feel we're only scratching the surface. To view a list of testimonials received from past delegates, please click here (please scroll to the bottom of this page).

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Tel: +612 9267 1488
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Alliance Partner China HR

Friday
Jul052013

Surfing the BRICS

Everyone knows that the world has significantly changed. Whether the cause of this was 911, the fall of the Berlin Wall, the GFC, or simply the opening up of large, populated countries that have been closed to outsiders or unstable for decades, there can be no arguing that global economic, political and social power is shifting towards the emerging world of the “BRIC”s (Brazil, Russia, India and China) and other big rapidly emerging countries (eg Mexico, Indonesia, South Korea and Turkey) and regions (eg Asia, Continental Africa, Latin America and Eastern Europe).

Everyone is asking the same questions? Can the USA recover? Will the BRICs be able to fill the consumption gap? Is this an opportunity or a threat? Where are the low hanging opportunities? How do you get started?

To answer these questions, bold forward-thinking entrepreneurs and business leaders need to be considering the impact of five irreversible trends which are setting a new direction for business, investment and thought leadership. These are as follows:

1. Urbanisation

The developed world already knows the significant economic benefits that have been derived from the process of urbanisation. In the two centuries following 1800, the world's average per capita income increased over tenfold as a result of the ‘Industrial Revolution’ in Britain.  China and India, which had previously been two of the largest economies in the world due to their large populations and land mass are now catching up and experiencing their own ‘Industrial Revolution’ on steroids! In only 30 years, China is already half way through its own urbanisation process but still has a long way to move another 300 million people or so from rural to urban centres in the next 30 years.  

Urbanisation is 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). Forward thinking business leaders need to consider the potential of the world’s new “mega-cities”: Sao Paulo, Moscow, Mumbai, Shanghai etc.

2. Consumption

With rising incomes, minimal debt and rapidly increasing wealth, the emergence of a new middle class from emerging countries is perhaps the most exciting opportunity of all, and a good reason to be positive about the future.

In Asia alone, the middle class consists of 525 million people, accounting for 28% of the global middle class, and this number will triple to 1.74bn by 2020. Over 70% of the growth in global demand until 2020 will come from Asia, with private consumption reaching $8.6 billion by 2020.  There are already 3.5 billion consumers in developing Asia. By 2030, two-thirds of the world’s middle class will be in Asia and will account for 54% of total consumer spending.

As evidence of the exciting potential, car sales in China will grow at an annual rate of 5.3% and is anticipated to reach 30 million units in 2020.  Healthcare expenditure in Asia is expected to double by 2020. Food consumption of the ASEAN-5 is expected to reach US$180bn by 2020.  Bank lending has been expanding in Vietnam at 33% per year for the past ten years.

We live in the “Asian Century” but the consumption story is equally exciting in Eastern Europe and Latin America. What are you doing to tap into the growth of the emerging consumer?

3. Innovation

Its no longer true to say that, whilst the emerging world is good at copying things and applying cheap labour to create wealth for well known western brands, they will never be able to become true inventors, creators and innovators themselves. In fact, they are already leading the world in many areas of scientific development, including the bio-sciences, IT and in the development of new forms of sustainable energy. Brazil is already well known for its green credentials (45% of Brazil's total energy needs is already drawn from renewable sources) and China is transforming many industries with its massive investment in new renewable energy (hydro, nuclear, solar, wind, biomass and more efficient use of coal and existing energy sources).

“Moving up the value chain” is the mantra that you hear as you travel around the emerging world.  This creates a window of opportunity for innovative western leaders to export their capabilities, experience, know-how and technology to the emerging world and participate in the growth of these new creative industries.

4. Aspiration

Apart from an abundance of land, people and capital, the emerging world benefits from a dynamism and entrepreneurial spirit derived from a combination of ambition, energy and aspiration. In many countries (eg Brazil, India and Continental Africa) this aspiration comes with an exceptionally young demographic profile which will propel their economic growth long beyond the next century.  Don’t forget that only 30 years ago, most emerging countries were suffering from extreme poverty (for a wide range of largely uncorrelated reasons) and since opening up and attracting foreign investment, they have now had a taste of success and wealth which has energised the whole nation.

Don’t take too long to decide whether you believe this or not. By the time you do decide, it may already be too late to jump on board!

5. Globalisation

Despite a great deal of talk, words and catchy titles (eg “the world is flat”) the process of globalisation has only just begun. In fact, some argue that it hasn’t even started yet. The truth is that, despite the well known advances in technology, high speed broadband and inter-connectivity, the opportunity to connect and collaborate with other global business leaders and entrepreneurs in China, Brazil or Russia, or to outsource low level tasks to India, Indonesia or Vietnam, is as opportune now as its always been. The emerging world is literally your oyster if you are brave enough to take the plunge. Don’t mess around on the small waves. Surf where the big waves are!

 

Sunday
Jun232013

China is Modernising not Westernising

I was recently interviewed for a story on ABC TV in Australia discussing the drivers of Chinese investment into Australia. Please click here to view it:

 

Monday
Jun172013

Tianjin – A key destination for  investment

Most Australians haven’t heard of the port city of Tianjin, but tucked away 137km southeast of Beijing is a flourishing metropolis which has been growing at an annual rate of 16.5% since 2007, and is home to over 13million people.  Prior to the founding of the People’s Republic of China, Tianjin (meaning, ‘a port for the emperor’) was the economic and financial centre of Northern China. Currently, Tianjin’s architecture is a culmination of its history as a colonial city mixed with its modern Chinese culture, a plethora of colonial buildings, modern skyscrapers and stylish suspension bridges. Now, an ultra-modern bullet train connects the city to Beijing, a journey taking less than half an hour, and plans for the next Beijing International Airport development show that it will be conveniently located halfway between the two cities.

Tianjin is the sister city of Melbourne and is one of the four municipalities that has “provincial status” level and therefore reports directly to the Central Government in Beijing. It is the sixth largest city in China in terms of urban population and the fifth largest by urban land area. Manufacturing represents approximately 60% of Tianjin’s economy and the Binhai New Area development zone has attracted many global giant to its ports, for example, Airbus and Caterpillar. Tianjin is also an important industrial base in China, with its major industries including petrochemical, metalworking, car manufacturing and textiles. Furthermore, the Chinese government has identified the Binhai New Area in Tianjin as the future hub for ‘vocational training’ in China, which is a fast growing industry in China as companies further understand the value of  vocational training for the long term development of their organisation.

Tianjin is one of the country’s leading destinations for Foreign Direct Investment. In the first quarter of 2013, the city approved 141 FDI programs which attracted USD5.1billion into Tianjin’s economy and was an 18% increase from the previous year. These figures are even more impressive when compared with the whole of China, which attracted USD29.9billion in the first quarter, only a 1.44% increase on that of the previous year.

Tianjin, the fourth largest port in China, has attracted 110 of the world’s top 500 companies. The Tianjin Economic-Technological Development Area (TEDA) which is located within the Binhai New Area, is located 40km from Tianjin’s city centre and is consistently ranked as China’s best performing free trade zone and has become one of the preferred manufacturing bases for foreign multinationals. TEDA focuses on four key industries: (1) electronics and communications; (2) biomedicine and biotechnology; (3) advanced manufacturing; and (4) food processing. In fact, Scandinavian pharmaceutical company, Novo Nordisk, has selected Tianjin to build the largest insulin production plant in the world, with investments totalling USD400million. In addition, Motorola’s Tianjin manufacturing facility is one of the biggest in the world and Samsung’s current Joint Venture with Central Tianjin Electronics Corp has seen the establishment of the biggest mobile manufacturing and R&D base outside of Korea.

Tianjin’s geographic location and economic significance has seen it become a major communications hub for Northern China. With the largest man-made port in the world, the largest air-freight facility in the region and railways linked in all directions (and into Europe), it is no wonder that the significance and importance of the development of Tianjin is reflected in the nation’s five year plan. Often described as living in the shadow of Beijing, Tianjin workers are actually slightly better off than their Beijing counterparts with a minimum wage that is 4% higher than that of Beijing and a lower cost of living.

An approach that was pioneered in the 1980s, saw Chinese authorities choose Tianjin as a “proving ground” for policy experiments including those surrounding financial services. If successful in Tianjin, the policies may be carried out nationwide. As an example, in late 2006, the Chinese government established the country’s first equity fund heavily reliant on bank lending, the Bohai Industrial Investment Fund, with an initial investment of RMB6billion, which was expected to reach RMB20billion within 15 years. As a result of this experiment, the growth of the funds industry has exceeded many expectations and is forecast to become one of the largest in the region.  

With respect to the banking sector, the total credit issued in Tianjin has grown faster since 2009 than anywhere else in China mainly as a result of the post GFC economic stimulus package. In addition, ANZ currently holds a 20% ownership in the Bank of Tianjin and is the second biggest shareholder. The Bank of Tianjin is valued at $2.3billion.

Yujiapu Financial District

The Yujiapu Financial District, which has been described as the “future Manhattan of China” is currently under construction in Tianjin and is set to be the world’s largest financial district (9.5million square metres). The financial district represents a RMB200billion dollar investment by the Tianjin government and will be built in four stages. The city will comprise of 47 skyscrapers that will be constructed on the salt flats in Tianjin. The first dozen buildings constructed in the new financial district will have four times the combined floor space of the Empire State building! The Government has strategically created incentives for businesses to transfer their legal residency and offices to Tianjin. In particular, tax incentives to private equity funds has seen over 50% of the country’s private equity funds relocate their office space to Tianjin. This strategic move has also attracted many of China’s “princelings”, the sons and daughters of current and former senior Chinese officials, who are highly involved in the private equity industry in China.

The Tianjin government provides a great variety of investment incentives to attract companies and their capital to Tianjin. Incentives cover a range of industries including: financial institutions, Agricultural technology companies, Science and Technology R&D and to a variety of incorporation structures including Sino-Foreign Joint Ventures and establishment of Headquarters/Regional Headquarters.

The Tianjin story is a very important one in the past, present and future of China. As a key destination for foreign and domestic investment, as a city with world-class infrastructure that has attracted some of the brightest minds in the country to its opportunities for strong growth and development – it’s time for businesses looked beyond Beijing to the role that Tianjin can play in connecting China with the rest of the world. 

 

Sunday
Jun162013

Interview on Business Events TV

I was pleased to be involved in co-hosting a senior delegation from Yiwu in China with Caroline Hong and the SME Association of Australia and was interviewed on Business Events TV discussing opportunities for Australian SMEs in China

Saturday
May252013

Meetings & Events Industry in the BRICs

I was delighted to appear as a keynote speaker at the recent MEA Conference in Darwin. In my presentation, I provided some insights and observations into the growth of the Meetings, Events and Conference industry in each of the BRIC countries. For a summary, please click here

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