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How to take Chinese business opportunity in Australia

How to take Chinese business opportunity in Australia

It has been long since China became Australia’s biggest trade partner. But as the political tension between the two nations grew up, negative attitudes toward China are hardening, and Australians now view the world’s second-largest economy much less favorably than before, according to a survey published by the Lowy Institute, a Sydney-based think tank.

How would you like to see China in the coming years, especially if Pandemic finishes and we come to a long time of economic recovery?

In my point of view, China and Australia are economically mutually dependent. China needs iron ore and food from Australia and Australia needs China to be its export market and source of funds, simply for another around of business boom or recovery at least.

Australia wishes to become stronger in manufacturing, but it just can not happen because Australia is competitive in energy, food supply, health related businesses, but not in consuming market, cheap but quality manpower, mass and amber funds. So, we can easily see that the two nations need each other really, without any choice.

For a small business in Australia, it is quite difficult to explore the huge Chinese market. You do not know China’s diverse culture, different languages and accents in different provinces. Sometimes it is much easier to understand and approach Chinese Australian businesspeople, simply because these people are speaking English and doing business in Australia. Do not forget there is 1.2 million Chinese background people living in Australia and we can see the increasing trends that more and more Chinese will come to Australia through different visas like student visas, working visas, investor visas only if there is no worse situation happens.

In one word, you can do business with those established by different generations of Chinese migrants, especially the young generation.

KPMG and University of Sydney Business School conducted a research and issued a report in 2020 named “The new Chinese Australian entrepreneurs” to talk about the so-called Chinese-born Australian entrepreneurs. Many of them initially arrived in Australia as students, skilled migrants or high-net-worth investors who then established local businesses. Their business outlook and behaviours differ from previous generations of Chinese migrants. Members of this generation have started and built successful businesses which have created local Australian job opportunities and have played an active role as intermediaries in Australia’s business relationship with China.

Some of entrepreneurs, got Australian tertiary education, have an understanding of the norms of doing business in both countries and can offer a bridge between the two cultures and markets. An Australian degree and previous work experience gave them the confidence to seek new business opportunities in Australia. This experience with the Australian education sector played an important role in preparing them for building a high growth business.

Migrants like them not only offer important economic benefits, but they also bring diversity of thinking, innovation and growth to the Australian business landscape.

Our Chinese Australian entrepreneurs interact with, and use resources from, both Australia and China but are more active in Australia. They consider regular cross-border cooperation with commercial partners and an economic presence in both Australia and China as their competitive advantage. On average, these businesses communicate with their Australian customers and suppliers a few times per month, in comparison to a few times per year with their Chinese customers and suppliers. They are able to clearly identify the needs and wants of their customers, whether in Australia or in China; and develop a business strategy that enables them to effectively address these needs and wants by providing high-quality goods and services at competitive prices.

Does this mean something to you? I think it is a big opportunity for regular small businesses in Australia who do not have funds and capability to do business directly in China. You can just work with these Chinese Australian entrepreneurs or normal businesspeople, through who you can still share your pie.

According to the report, 45 per cent of these Chinese Australian entrepreneurs are in the services industry with businesses in areas such as tourism, property agents, immigration agents and professional services like asset and wealth management, legal, accounting, high tech, healthcare and media. Another big sector is real estate, I think is about development, building and construction, which takes 18%. So you can see the other 37% are distributed across agribusiness, manufacturing, import and export, wholesale retail trade and mining industries. Chinese Australian entrepreneurs utilise their knowledge of both China and Australia to identify market opportunities. This cross border knowledge became a key reason for their success. These entrepreneurs believe they’ve benefited from China’s growing economic strength and spending power, which they coupled with their knowledge about Australia to identify new opportunities in both countries.

But it means their business penetration into Australian main business stream is still in the beginning level. It just mainly because they can provide cheaper funds or cost-effective products and services, because they have successfully identified the market opportunities across the two countries, because they made the best of their knowledge and hard work.

Another interesting point is how they use their Chinese ethnic networks. These businesspeople collaborated with companies with a Chinese background in Australia. They give each other the support from gaining local market access, supply of products and services, and even capital and funding. Not surprisingly they currently also face some challenges including reducing information cost, financing risks and identifying business opportunities, and talent for employment.

Therefore, I must let other small business owners to know that you have plenty of opportunities to work with Chinese Australian business owners and gain your share of profit in the coming years. Simply if you can provide value to these people helping them upgrade their business model, management and operations and even technology sectors. They need to go deeper to local Australian market, diverse their businesses into other industries like agribusiness, manufacturing, wholesale, etc. They have a long way to go, and they need you.

Sinosmart Business Brokering as a local Chinese business broker agency in Sydney, established in 2015, act as the bridge between local small business owners and Chinese business buyers

Reference: KPMG “the new Chinese Australian Entrepreneurs”https://home.kpmg/au/en/home/insights/2020/08/new-chinese-australian-entrepreneur-research-report/common-traits-chinese-australian-entrepreneurs.html

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