Australian Business Forum Digital Magazine

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Digital Version Issue 1 Vol 4 Issue 2

China Lunch Club ACBW 2012 Review

Celebrating 40 years of diplomatic relations between Australia and China

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Australian Business Forum Âť Volume 4 Issue 2

Australian Business Forum Magazine is published by Australian Business Forum Melbourne Postal address: Po Box 568 South Yarra vic 3141 Shanghai Level 23, Citigroup Tower 33 Huayuanshiqiao Road Pudong, Shanghai, China 200120

Contents Foreward.....................................................................................3 Celebration of a long-term relationship between Australia & China.......................4 Doing business in China................................................................... 12 Tapping into China’s ecommerce revolution.............................................. 15 China Lunch Club..........................................................................

17 Engaging with China ...................................................................... 19 Pursuing Intellectual Property rights in China............................................ 21 The gospel according to John Borghetti, Virgin CEO..................................... 23 Australian SMEs see a bright future offshore.............................................. 25 Fishing For China’s New Opportunities................................................... 27 Lenovo SMBs the edge in the global market............................................... 29 Same bed, different dreams................................................................ 30 25 years memorable experience promote China in Australia............................. 34 Food Review: Red Spice Road............................................................. 36 Wine Review............................................................................... 38 Car Review................................................................................. 41

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Contact Details: Tel: +61 (0)3 8689 9898 Email: info@abforum.com.au Twitter: @ausbusforum AustralianBusinessForum.com.au Editor Judith Davenport Art Director/Design Wang Rong Digital Media Ahmed Arayne Contributers David Thomas Lisa Goodhand Ray Tettman Julius Wei Jingning Li Anthony Black Andrew Skinner John Rashleigh Tom Doctoroff Advertising Sales Antoinette Caruana Sonija Chan Jennie Magri Marketing Doris Li China Representative Xu Rui Subscription Services You can also subscribe by mail, telephone or online at the details provided below: Tel: +61 (0)3 8689 9898 info@abforum.com.au AustralianBusinessForum.com.au Australian Business Forum Magazine. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of Australian Business Forum Pty Ltd. Published by quartly by Australian Business Forum.

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Institute of Public Accountants the only professional accounting body to offer a Master of Commerce as its professional program; the IPA Program. publicaccountants.org.au

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Australian Business Forum Âť Volume 4 Issue 2

Foreward John F. Rashleigh, Chairman, Australian Business Forum

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ustralia China Business Week was conducted at the Windsor Hotel in Melbourne during May 2012. All functions were well patronised with the concept of running parallel forums in Chinese and English being particularly successful. We enjoyed in total the support of over 1,000 delegates and visitors across the series of events.

Unquestionably the highlight of the event was the lunch attended by more than 260 delegates. The keynote address was delivered by the Premier of Victoria, The Honourable Ted Baillieu MLA. The Premier spoke openly and candidly about the importance of the Sino-Australian relationship. Particular emphasis in his presentation was directed to dispelling the myth that our trade relationship is totally linked to the resource sector and therefore limited to the states of Queensland and Western Australia. Mr Baillieu provided specific examples of the significant level of trade and in turn the monetary value of trading between China and the State of Victoria. Mr Baillieu was acknowledged and ably supported by Mr Shi Weiqiang, Counsel General of the People’s Republic of China in Melbourne. The Counsel General spoke warmly about the relationship between the two countries and his enthusiasm and commitment in supporting both the trade and cultural elements of the relationship. We take this opportunity to extend our deepest appreciation to the Counsel General for the significant and ongoing support.

It is also appropriate at this time to acknowledge and express our appreciation to The Honourable Ken Smith, Speaker of the Legislative Assembly, for his long term and ongoing support. We are deeply grateful for his involvement.

2012 marks our entry into the Sydney market with our first event being the Inaugural China Lunch Club which was held at Hong Kong House in July. We can unequivocally rate this as a highly successful launch and are indebted to Mr Steve Barclay, Director Hong Kong Economic and Trade Office, Government of the Hong Kong Special Administrative Region, for his hospitality and support.

Our keynote speaker, Mr James Hogan, Head of Commercial Banking HSBC, left a lasting impression on the audience and was certainly well qualified to speak on the emerging presence of the Chinese currency. We thank him sincerely.

As this article and the remainder of the publication goes to the printers we are set to launch the Inaugural Sydney Australia China Business Week. We have been reminded of the challenges which first confronted us when we decided to launch in Melbourne being mirrored by the same sort of demands of launching for the first time in Sydney.

However numbers look promising and the event which is being held at the prestigious Shangri-la Hotel should be memorable. We look forward to reporting in much greater detail in the next edition of this magazine.

Clearly as the global economic difficulties continue to have a detrimental impact on the international economy, it is imperative that we continue to take positive steps to further cement the already strong relationship between China and Australia.

From a personal perspective it is very interesting and encouraging to reflect on where we sit today compared to when Australian Business Forum commenced nearly five years ago. Both nations can be proud of the tangible progress we have made in developing and extending our relationship in all its various aspects. It is critical that we continue to enhance this understanding and further strengthen our respective positions in our Asian world.

We sincerely hope you enjoy this issue of our magazine which celebrates the milestone of our fourth anniversary.

May I also draw your attention to the fact that any readers and / or corporations that have an interest in connecting with China, that our planning for 2013 is already well advanced. We invite you to contact us earlier rather than later in order that we can cater for your needs.

In closing I thank all of our connections for your generous support so far this year.

New challenges will continue to arise however, with your continued involvement I am sure we will also continue to realise our short and long term objectives

www.AustralianBusinessForum.com.au

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Celebration

of a

long-term relationship between Australia

& China

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t is 40 years since Australia and the People’s Republic of China established diplomatic relations in 1972. It is an event that we celebrate because it is a foundation stone in the history of our two countries. Since that day, 21 December 1972, interaction between the people of China and Australia has blossomed in all aspects of human endeavour.

Trade has grown dramatically, and we now see unprecedented numbers of Australians and Chinese visiting each other’s countries for business, to study and for tourism.

Fast Facts: How the Australia-China relationship has grown in 40 years Trade: Two way trade in 1972: less than A$100 million …in 2010: more than A$100 billion Tourism: Chinese short term visitors to Australia in 1972: fewer than 500 …in 2000: 120,000 …in 2011: 542,000 Australian short term visitors to China in 1972: fewer than 500 …in 2000: about 92,000 …in 2010: more than 336,000 Education: Chinese students in Australia in 1972: 0 …in 1998: 9,000 …in 2010: 167,000

Chairman, Mao Zedong, P.R.China

40 Years of Diplomatic Relations; 40 Years of change set new records in mutually beneficial cooperation.

Australia and China have both changed a great deal in the 40 years since diplomatic relations were established in 1972. On first glance, the changes in China, economically , socially, and politically, are more dramatic. But Australia is also a very different place compared to 1972. Both countries’ economies have enjoyd comprehensive reform in the last few decades and have seen real benefits to both countries.

The 40th Anniversary is a chance to reflect on the evolution of the relationship covering the past 40 years. It is also an opportunity to build and strengthen that relationship. The Australian and Chinese Governments both share these objectives.

Australia and China are both looking to the future. It is a future in which economic

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Australian Business Forum » Volume 4 Issue 2

Hon. Gough Whitlam QC, Prime Minister of Australia

challenges abound. Australia needs to plan for a smart economy beyond the resources boom. China is turning from its export and investment led model to an economy driven by domestic demand and a bigger services sector to underpin its continuing development. There is plenty of scope for mutual benefit beyond the resources trade.

By 2020 China’s middle class will number 670 million – a huge group of newly prosperous people keen to travel and study overseas. This is a great opportunity for Australia, but also for the people of both countries, to build closer relationships and a better understanding of each other’s place in the world. Cultural and people-topeople links will continue to be the foundation of the Australia-China relationship.

Australia hopes to build on the achievements of the past four decades to set up a future of even closer co-operation and understanding between itself and the people of China.

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ustralia and China share close, longstanding and friendly ties, as well as a lucrative and mutually beneficial economic and trade relationship.

As we celebrate the 40th anniversary of our close ties, we have a great deal to be proud of. Forty years ago, our annual two-way trade was less than A$100 million. Today, China is Australia’s largest trading partner and Australia is a vital supplier of the resources and energy that are fuelling China’s remarkable economic growth.

The government is committed to creating the environment in which entrepreneurs in both countries can capitalise on the enormous opportunities that exist to bolster our trade and investment engagement, including in education, tourism, services, agribusiness, clean energy – to name just a few sectors in which Australian companies enjoy considerable expertise.

Australian businesses will also The 40th anniversary of our continue to be willing partners as China’s economic dynamism diplomatic ties presents a wonderful extends beyond its traditional opportunity to broaden and deepen centres of commerce and industry our bilateral relationship. in coastal areas to the booming centres of inland China.

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The four BRIC countries present diverse opportunities and challenges for investors, entrepreneurs and business leaders. But how much do you know about the huge potential of Brazil, Russia, India and China?

What are the opportunities and risks?

Why should you be interested in them? How do you get started?

BRIC expert, David Thomas, has unique experience and powerful networks which have accumulated over a 30 year career in London, Hong Kong and Sydney. He managed his own financial services business in Hong Kong for 8 years which provided unique insights and first hand experience of the changing landscape within the Asia Pacific region, particularly the opening up of China.

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e have travelled a momentous course and made historic achievements.

First, both the Chinese and Australian governments place great importance on bilateral relations and have maintained regular exchanges at both the top and other levels.

Second, we have unlocked the great potentials of our economic complementarities and set new records in mutually beneficial cooperation.

we will continue our dialogue with business leaders, governments, universities and the wider community about how we can promote a wide range of Australian interests, and harness the tremendous opportunities that China’s continued growth presents.

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Second, we need to work together to build a peaceful and inclusive security order in the Asia-Pacific, not the opposite.

Third, the rapidly growing people-topeople exchanges have cut short the distance between our peoples and brought our hearts and minds ever closer.

As to how to enhance strategic mutual trust, I would like to make two observations: First, we need to take a rational view of each other’s strategic intention and should not see each other as a threat or a rival.

This year marks the 40th anniversary of China-Australia diplomatic relations.

In the past 40 years, our relationship has withstood the test of time and the ups and downs of the international situation.

David’s experience includes engaging with companies, entrepreneurs and investors in each of these rapidly growing countries. He advises many clients within the Asia Pacific region on the rules for profitable engagement. And he addresses audiences of all sizes on investing and doing business with the BRICs generally, and China in particular.

For more information, and to sign up for David's regular BRIC Insights, go to www.davidthomas.asia

Australia-China Business Week 2012 Review

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ustralia-China Business Week (ACBW), in its fifth year, has consolidated its place as a major Sino-Australian business event.

This year, following the annual Melbourne event with an attendance over 600, ACBW was launched in Sydney for the very first time which turned out to be a huge success attracting more than 500 delegates and visitors. ACBW 2012, as an official partner of DFAT’s “40th Anniversary of Diplomatic Relations between Australia & China”, proved itself an effective business platform for businesses, academia and government.

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ACBW 2012 focused on three questions that concern many corporations who want to do business with China: “How to manage your brand”, “How to manage your people” and “How to manage your money” in China? Speakers from financial service providers, accounting associations, law firms and media presented at ACBW 2012 forums, offering market insights to those who are eager to engage in business with China.

Meanwhile, ACBW 2012 China Day Forum, as one of the first local business forums

Australian Business Forum » Volume 4 Issue 2

presented in Mandarin, was set to provide Chinese companies and entrepreneurs a better understanding of the local business environment as well as regulations for investment and migration into Australia.

ACBW 2012 received very positive feedback from both delegates and speakers.

“This year’s event marks a new benchmark with the number of delegates and insight into the China market and undertaking successful business in China”, said David Thomas, CEO of Think Global Consulting and Chair of ACBW 2012 Forum.

ACBW 2012 Melbourne Premier of Victoria Ted Baillieu presented the keynote address at ACBW 2012 Melbourne Luncheon and announced that “Victoria is moving to a new level of engagement with China. The Victorian Government will spend an extra $A50m over four years on trade missions, more than doubling its existing funding”.

Ted Baillieu launched Victoria’s China Tourism Strategy at the Australia-China BusinessWeek 2012 Melbourne Luncheon, “The strategy aims to boost the growth of the Chinese tourism market in Victoria from seven per cent to more than 11 per cent each year. It will also create 42,000 extra jobs in Victoria and deliver up to $2.3 billion in annual visitor spending. It will also boost gross state product over a decade by $18.2m.”

The Premier also provided an excellent insight to Victoria’s long standing connection with China dating back to the gold rush of the eighteen hundreds and the appointment of the first Victorian Commissioner to Shanghai in 1904. In fact Victoria’s association with China precedes the Commonwealth.

The Consul General of the People’s Republic of China in Melbourne also presented a keynote address outlining the cooperation Australia and China has enjoyed over the past forty years. “Looking back at the past years and looking forward to the future”

Consul General Mr Shi Weiqiang, talked about the expanding and key relationship with Australia.

ACBW 2012 Sydney Duan Jielong who spoke at the ACBW 2012 luncheon and provided a focus on the Sino-Australian relationship “ China has become the largest trading partner, export market and import orgin of Australia for many consecutive years. Last year, our bilateral trade in goods was registered over $110 billion US dollars, which grew 1000 times compared with that when we started our diplomatic relations.”

Mr Duan also responded to Australia media’s attention currently to the “slowdown” of China’s economy. “The most important reason for the current economic slowdown of China is the voluntary macro-control by the Chinese government, whose purpose is to fostering the

transition and upgrading of the economic growth pattern.” said Mr Duan, “In our twelfth five year plan, the Chinese government voluntarily tuned down the GDP growth expectation, so that the Government has greater policy room to speed up the economic transition and restructuring, and shift the focus from the speed to the quality of growth. By doing so, we try to direct China’s economic development toward a more environmental friendly and resource and energy efficient one.” He believes that positive factors are still accumulating in China’s economy, and China’s economic growth has great structural potential.

James Hogan, Head of Commercial Banking HSBC, shared a similar view at his speech during the luncheon highlighting the steady growth and win-win trade relations between the two

nations. Virginia Greville, the newlyappointed Director of the NSW State Office of DFAT, made a toast to the 40-year relationship between Australia and China.

The Hon Andrew Stonier MP, Deputy Premier of NSW and Minister for Trade and Investment, launched ACBW 2012 Sydney event and delivered a keynote address at the breakfast. He said, “China has become the largest trading partner, export market and import origin of Australia for many consecutive years. Last year, our bilateral trade in goods was registered over $110 billion US dollars, which grew 1000 times compared with that when we started our diplomatic relations.”

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Over 1000 delegates attended ACBW 2012.

澳大利亚-中国商务周 墨尔本 悉尼 上海 MELBOURNE - SYDNEY - SHANGHAI 2013

20 March

Melbourne

10-11 April

Shanghai

19 June

Melbourne

29 August

Sydney

Melbourne

Sydney

May, Jul, Oct, Dec

Apr, Jun, Sep, Nov

Magazine Issues Vol. 5 - Issue I Vol. 5 - Issue 2 Vol. 5 - Issue 3 Vol. 5 - Issue 4

( Mar, Apr, May ) ( Jun, Jul, Aug ) ( Sep, Oct, Nov ) ( Dec, Jan, Feb )

Contact Tel: +61 3 8689 9899

Email: info@abforum.com.au

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Australian Business Forum » Volume 4 Issue 2

Australia-China Business Week 2013 Shanghai Date: 10-11 April Venue: The Westin Bund Center, Shanghai

Since its launch in 2008, Australia-China Business Week (ACBW) has grown to become the premier annual event serving to strengthen Sino-Australian business links across all industry sectors through fostering B2B connections.

Building on the success of ACBW in Melbourne and Sydney during 2012 with over 1000 delegates and visitors attending, AC BW 2013 is expanding even further with the upcoming launch in China’s commercial capital Shanghai with a presentation of Australia China BusinessWeek - Shanghai.

Entering its sixth year, ACBW 2013, continues to create a unique platform for Australian businesses especially SMEs who are seeking a path to success in China, as well as Chinese entrepreneurs wishing to engage directly with their counterparts in Australia.

ACBW 2013 Shanghai helps companies to define effective entry and expansion strategies in China through a solid knowledge on government policies, business landscape and the latest economic outlook.

More importantly, it connects businesses with potential distributors, partners and investors through a succession of welldesigned events: ACBW Breakfast, Forum, China Day Forum, Luncheon, Showcase, Mix at Six Networking Function and Business Matching.

Build your Guanxi network in China through ACBW Shanghai 2013 Business Matching !

About Shanghai

When dealing with business relationships in China, you must have heard the word “Guanxi”, which literarily means “Relationship”. To transact in China, certainly the product needs to be right and the price needs to be competitive, but it is the right “Guanxi” that makes all the difference in ensuring your business to be successful.

Supported by Austrade, ACBW 2013 Shanghai groups high-profile business leaders from various industries.

ACBW Shanghai 2013 Business Matching, as a highlight of the event, provides you an excellent connection with right contacts who have the influencing and decision making power. The section is finely designed for result-oriented executives to expand business networks and find the strategic “perfect match”. It takes you further beyond your Linkedin and Facebook pages and put you in front of potential distributors, partners and investors in China to start your “Guanxi building”.

As the largest city in China and an economic, commercial and financial center, Shanghai is vital to China’s future.

No other city in China is more vibrant and fascinating or has such a unique colonial past. Shanghai’s rapid development over the last decade has secured its place on the global stage, exerting influence over commerce, finance, media, fashion, technology and culture. Today Shanghai is one of the most prosperous cities in the world, ranking fifth in the 2011 edition of the Global Financial Centers Index published by the City of London.

Its cosmopolitan character, sophisticated affluent consumers and skilled labour force make it a highly attractive destination to overseas investors.

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Australia in the Asia Centry Asia Pacific Business Outlook 2013 20 March 2013, Melbourne APBO 2013 brings together Asia’s top executives, financial market experts, economists and academics, giving delegates valuable insight into emerging trends identified by the region’s most influential thought-leaders.

APBO 2013 will look ahead to consider “Australia in the Asian Century”. Consisting of breakfast, forum, luncheon and Mix at Six networking function, the event offers delegates the chance to review the current economic trends and identify potential opportunities of trade and investment in the Asia-Pacific region.

Join Australia’s and Asia’s renowned economists, specialists, entrepreneurs, industry experts and key government leaders, at this major business forum •

APBO 2013 Breakfast

•

APBO 2013 Luncheon

•

APBO 2013 Forum

•

APBO 2013 Mix at Six Networking Function

Asia Pacific Business Outlook 2013 20 March 2013, Melbourne

By Doris Li

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he rapid and sustained development in Asia and the Pacific has created vast trade and investment opportunities, especially for the economies of its individual nations. Asia and Pacific region is the largest region in the world with a vast geographic area of land and water, some 60 per cent of the world’s population and includes 55 countries as defined by the United Nations.

One of the most significant developments in Asia and the Pacific economy has been the rapid growth of regional cooperation.

Within a few years, a number of regional initiatives have been endorsed and various forms of cooperative ventures have been established.

Now in the third year, Asia Pacific Business Outlook (APBO) is regarded as one of the most influential business events focusing on the future of the Asia-Pacific region.

The event serves as a unique platform for the Australian business sector to engage in constructive dialogue with the business leaders from Australia and key trade partners in the region, including China, Indonesia, Japan, South Korea, India, Vietnam and the United States.

APBO 2013 brings together Asia’s top executives, financial market experts, economists and academics, giving delegates valuable insight into emerging trends identified by the region’s most influential thought-leaders.

APBO 2013 will look ahead to consider “Australia in the Asian Century”. Consisting of breakfast, forum, luncheon and Mix at Six networking function, the event offers delegates the chance to review the current economic trends and identify potential opportunities of trade and investment in the Asia-Pacific region.

APBO 2013 Breakfast A panel of economists from major financial service providers will present at APBO 2013 Breakfast, offering an analysis on the current economic conditions as well as a market forecast of the region. It is a great opportunity for delegates to network with fellow professionals from Asia Pacific while keeping themselves staying in the know during the changing economic climate.

APBO 2013 Luncheon APBO 2013 Luncheon offers a chance to meet Government Ministers and industry leaders from Australia and its key trade partners in the region - China, Indonesia, Japan, South Korea, India, Vietnam and the United States. Learn the latest market regulations over the luncheon, look into challenges and potential opportunities, and stay relevant in the game!

APBO 2013 Forum The scale and pace of Asia’s transformation is unprecedented and the implications for Australia are profound. APBO

2013 Forum will feature the White Paper developed by the Australian Government Australia in the Asian Century to considering the likely economic and strategic changes in the region and what more can be done to position Australia for the Asian Century. It will also take a close look at five countries in focus: Indonesia, Vietnam, Japan, India and South Korea. Consul Generals, industry leaders and specialists from these five countries will present at the forum, talking about the growth of each country and their impacts on Australia across all business sectors.

APBO 2013 Mix at Six Networking Function Finish the day by coming to the 6pm networking to meet potential partners, investors and distributors in the region. As a well-established business event, APBO 2013 Mix at Six Networking Function attracts a group of high-profile executives and business figures. What could be a better way to boost your reputation and generate new leads than talking to people who are also eager to dig opportunities in the region?

We’re living through an extraordinary period in economic and social history. Never before have such rapid economic transformations taken place on such a large scale. Asia’s rise is, of course, changing the world.

Dr. Ken Henry AC

Former Secretary of the Treasury and Special Advisor to the Primer Minister

www.AustralianBusinessForum.com.au

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Doing

Business in China

By David Thomas, Think Global Consulting

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ver the last 10 years, I have led numerous delegations, study tours and client visit programs to China (and Hong Kong) and observed at first hand some of the mistakes that are often made when attempting to engage with the Chinese for business purposes. Here are my top 6 tips for foreigners looking to succeed in China:

In western countries, we do have a tendency to talk talk less! too much! We’re passionate about what we do, we want to get results and, knowing that we don’t have much time to make an impression, we often start pitching our capabilities or products before we’ve spent enough time exploring the needs, desires and aspirations of the people we’re talking to.

In China this can come across as arrogant, discourteous and even rude and, whilst it may not be apparent at the time, its likely to cut things off before they’ve even got started! It takes longer but you’ll get better results if you take the time to ask open questions, listen carefully to the answers, and tailor your products or capabilities to their needs rather than yours!

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Australian Business Forum » Volume 4 Issue 2

Listen more,

2. Prepare your pitch properly

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potential business partners, talk about their country, teach them about your culture, extend the hand of friendship and tell them about your interests, hobbies and passions. When you’ve exhausted every possible topic of conversation, and when the timing feels right, offer to start talking business! You’ll get a better result this way.

t’s absurd to think that you can treat 4. hina is not one the Greater China market hen visiting a company or region as Government department in one single China it is very common to be given a market. The have beautifully presented bilingual differences, heard document, with details of the company, idiosyncrasies many city or industry you are visiting, which and complexities of 6. end your best stories and includes colours, photos and images in dealing with companies based in Shangpeople witnessed an expensively produced brochure. In hai, Hong Kong and Taiwan (which myself comparison, our own documentation is could be considered as quite mature examples often shabby and, worst of all, in English markets) compared with those in the of foreign only, with no Chinese translation. If you ‘second tier’ cities of Chengdu, Chongqing companies want some clues as to how to present your and Xian are so diverse that you could who have failed in capabilities to a Chinese entrepreneur or spend a lifetime trying to understand China due to sending in ‘the B team” business, take great notice into how they them all. They even eat different foods, (ie their lower rated people) instead of present their credentials to you! speak different dialects and compete with the A team (ie their very best people). each other to be the best city in China!

The theory goes that the most valuable ranslating profesTo be successful in China you need to do executives are too important to release sional docuyour research properly, settle on one (or from their home market operations. This ments into maybe two) markets, seek a deep niche is an obvious but common mistake. There Chinese (or vice with many potential customers or is a common saying that “the opportunity versa) is not business partners in it, and then in China is complex but the prize is great” as simple as work from there, For example, start and that success in Asia will dwarf your 3. se a professional asking a bilinin Hong Kong and work towards current operations. If you’re serious about gual member Taiwan and then Shanghai. Or translator success in China, and you want to give of staff or build a strategy to target China’s yourself the best chance, send your brightfriend to do emerging 2nd tier cities. It’s no est and best people to do the job! it for you. different to how you would approach This is a very an entry strategy for Europe.

BRIC Expert, Speaker, Entrepreneur common mistake. and Thought Leader, David It may get the job Thomas is well known in the done quickly, painlessly and here’s a saying Asia Pacific region for his at no cost, but how would you like your in China that experience, credibility and business described in Chinese as striving to you don’t passion for identifying, “succeed when the horse arrives”(马到成 talk business building and facilitating 功). The process of translating a document “until the third business and investment from English to Chinese is an art as well as cup of tea!” In 5. ocus on building relation- relationships between a science. Professional translators spend other words, you ships, not contracts developed and emerging years perfecting their craft, a process of build the relationcountries. study, practice and observation. Not only ship first and For more information: do they need to be highly proficient in both only then should www.davidthomas.asia languages, but they also need to learn the you focus on the method of capturing the meaning, flavour business deal. This and expression in the language, which is can appear tiresome, so much more than a simple translation of long-winded and unnecesthe actual words. sary, but it’s the way business is

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done in China and you ignore this at your peril. Make the time to get to know your

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Tapping

into China’s ecommerce

revolution

By Lisa Goodhand, China Blueprint Consultants

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uccessful e-commerce website owners should be looking to expand their reach beyond our Australian borders. In China, there is an unexplored and thriving online e-commerce market and contrary to popular belief, it is not as inaccessible as one might think, so long as the challenges of payment & logistics can be overcome and a positive customer experience created for Chinese online shoppers, Australian ecommerce sites could experience massive growth by marketing to China.

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ompared to the Australian online retail industry, which was valued at AU $11.5 billion in 2011, China’s ecommerce industry has grown in leaps and bounds. In 2011 it was valued at US $121 billion (AU $114.2 billion), comprising 14% of total retail sales… and there is even more good news! According to a recent Credit Suisse report (2012), ‘Chinese consumers are optimistic about spending and as their incomes improve, they are spending more on international brands’. With online shopping growth and consumer confidence in international brands, China is not a market to be overlooked.

How did it grow so quickly? The nature of a fast developing economy like China has meant that over the past 10 years, the Chinese online population has increased from 20 million to 538 million - roughly 22 times the population of Australia! This massive growth is forecast to continue, with estimates that by 2012 it should reach the 700+ million mark. It hard to imagine what dollar value this represents for ecommerce in China’s future.

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China’s ecommerce growth can lend credit in part to www.taobao.com, its biggest and most popular C2C ecommerce site. In 2003, when Taobao first entered the market, the largest Chinese e-commerce website was EachNet, with over 3.5 million registered individuals. It was later acquired by EBay. Just two years later Taobao, owned by the Alibaba Group, managed to capture 59% of the market share, and sent EBay packing.

Taobao’s success was largely due to their ability to see the existing problems within the local market, and respond to them.

The Alibaba Group acknowledged that in the early 2000s, online payment systems were still underdeveloped, a significant obstacle in encouraging online sales. As a result, they launched their own online payment system, Alipay (China’s Paypal), to facilitate online sales. They also developed an online instant message service to capture the Chinese people’s enthusiasm for negotiations and networking. Clearly these changes were embraced and in 2010, Taobao accounted for 79% of total online sales.

Australian Business Forum » Volume 4 Issue 2

Australians on the other hand have been slow to embrace the ecommerce revolution. Many SMEs lacked the technical expertise to engage in online sales, whilst others took a long time to overcome their concerns about security and logistics. With the advent of ecommerce ‘internationalisation’ we are seeing this trend re-emerge once again. Let’s hope that Australian ecommerce site owners are quick to overcome these obstacles, as it’s predicted that every year for the next 10 years, another 30 million Chinese each year will go online to shop for the first time (Boston Consulting Group, 2012).

With its solid infrastructure, it is likely that ecommerce in China will continue to thrive. The Chinese are commerce-centric and responsive to the needs of its people, and enjoy online shopping. Where the opportunities in Australia are still limited, they are plentiful in China, and with an additional 30 million online shoppers each year, it’s a market worth investigating.

Forum Business Matching Luncheon

CBW Shanghai 2013

Australia-China Business Week (ACBW) 2013 - Shanghai Date: 10-11 April Venue: The Westin Bund Center, Shanghai Entering its sixth year, ACBW 2013 Shanghai, continues to create a unique platform for Australian businesses especially SMEs who are seeking a path to success in China, as well as Chinese entrepreneurs wishing to engage directly with their counterparts in Australia.

ACBW 2013 Shanghai helps companies to define effective entry and expansion strategies in China through a solid knowledge on government policies, business landscape and the latest economic outlook.

ACBW Shanghai Program

10th April 2013

11th April 2013

8:00am - 9:30am

Breakfast

9:00am - 12:00pm

Forum

10:00am - 1:00pm

Forum

12:00pm - 2:15pm

Luncheon

1:30pm - 3:00pm

Media Briefing

2:30pm - 5:30pm

Business Matching

3:30pm - 5:30pm

Business Matching

6:00pm - 8:00pm

Mix at Six

Register Now OPEN ! www. AustralianBusinessForum.com.au

T: +61 3 8689 9898 W: www.AustralianBusinessForum.com.au E: info@australianbusinessforum.com.au

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Australian Business Forum Âť Volume 4 Issue 2

China Lunch Club Sydney

Keynot Speaker: James Hogan, HSBC

The inaugural Sydney China Lunch was presented at the classic Victorian landmark building-Hong Kong House.

Keynote speaker James Hogan Head Commercial Banking HSBC provided the fifty guests with an overview of critical Keynote & Speaker: across Australia Asia.

James Hogan, HSBC

Melbourne Sydney Shanghai

Melbourne June Keynote speaker John Lord AM Chairman Huawei Australia delivered an in depth understanding of one of China’s major and successful corporations.

Keynot Speaker: John Lord AM, Huawei

Melbourne August

Keynot Speaker: Louis Chiam, King Wood Mallison Contact : Membership @ChinaLunchClub.com.au

Keynote speaker Louis Chiam Partner King Wood Mallison outlined the journey that Mallisons undertook to become a major force in the as KGM and a major law firm on the world stage and in particular Australia, China and Asia. www.ChinaLunchClub.com.au www.AustralianBusinessForum.com.au

17

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18

Australian Business Forum » Volume 4 Issue 2

Engaging with China: Business Practice & Cultural Intelligence

T

he importance of China to Australian business is unprecedented. However, the opportunities offered by the ‘Asian Century’ will not materialise themselves. Australia’s interest in, and preparedness for, engaging with China requires the development of a ‘China business-ready workforce’.

The course introduces Chinese business practice and how to engage in Chinese business negotiations. It also covers aspects of Chinese social and business etiquette, the important concepts of ‘guanxi’ and ‘face’, effective marketing to a Chinese audience, and some key Chinese business words and phrases.

Engaging with China is a new six-week online course designed to increase your understanding of Chinese business practice. Developed by the Confucius Institute at the University of Newcastle, the course has emerged from extensive consultation with Australian business leaders to address the need to increase the capacity of Australian business to effectively engage with China.

Designed for busy professionals, the course consists of six weekly interactive online sessions delivered 12.30-2.00pm on Wednesdays. Using real world case studies and active online discussion, the weekly sessions are accessed directly from a PC. If, because of work commitments, students are unable to ‘attend’ any week, all the sessions are recorded, ready for review at any time.

So whether you are currently doing business with China, thinking about it, or would just like to add China capabilities to your professional expertise – Engaging with China will ensure you and your company are ‘China business-ready’.

The next course starts on Wednesday 17 October 2012. A 10% discount is available for My Business readers. So to secure your place, or a place for a representative of your company, in this exciting new online course visit: gs.edu.au/china For group bookings please contact the Confucius Institute at the University of Newcastle on (02) 4985 4360 or confuciusinstitute@newcastle.edu.au

Engaging with

China

Engaging with China is a new six-week online course designed to increase your understanding of Chinese business practices.

So whether you are currently doing business with China, thinking about it, or would just like to add China capabilities to your professional expertise – Engaging with China will ensure you and your company are ‘China business-ready’.

EW N COURSE CoursE ovErviEw Course Duration 6 x Wed, 12.30pm – 2pm Next Intake 17 Oct – 21 Nov Price $880 (inc. GST) – Enrol now to receive a 10% discount Course Mode Live interactive online sessions

UoN 2012/7389B I CRICOS Provider 00109J

To secure your place, or a place for a representative of your company, in this exciting new online course please visit: gs.edu.au/ewc For group bookings please contact the Confucius Institute at the University of Newcastle on (02) 4985 4360 or confucius-institute@newcastle.edu.au

Convenor Sara Cheng, Manager Greater China, Australian Business Solutions

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Australian Business Forum » Volume 4 Issue 2

Win more business using Bartercard.

With over 20,000 members in Australia, it’s a great way to get the competitive edge.

Pursuing

Intellectual Property rights

By Ray Tettman, Watermark Intellectual Asset Management

A

ustralian companies, particularly those which have products manufactured in China, often ask the question:

Is there really any point in trying to protect our IP in China when our product is likely to be copied anyway?

This question is often posed because China has been accused of being one of the biggest counterfeit and piracy markets in the world, and that enforcement of IP rights in China is difficult and expensive.

Delegations from Chinese government authorities have been reassuring the Australian legal profession for many years that their IP system is improving. But is it really?

In 2010 the Chinese government launched an antipiracy campaign – a nationwide crackdown on fake goods and copyright piracy. It was initially set to last for six months but was extended. Chinese law firms observed that it did actually make a difference. So it seems the Authorities are indeed more determined than in the past to achieve results.

Promoting innovation by Chinese companies is also one of the government’s main policy goals. The government recognises that being the world’s low cost workshop for manufacturing high-tech products designed elsewhere has its limits.

The policies also encourage ‘indigenous innovation’ by providing incentives for Chinese companies to file patent applications.

The National Patent Development Strategy (2011-2020) was published in November 2010 and outlines specific targets for 2015 and 2020. For example, by 2020, the number of patents for inventions, and the number of patent applications in foreign countries will quadruple, and core patents will be acquired. The government clearly regards patents as a vital business asset which will play a key role in the country’s development.

in

China

The policies seem to be working. China is now the world’s top ranking patent country – in 2011 there were more inventions patent applications filed in China than in Japan or the US. According to the State Intellectual Property Office of China (SIPO) there were 526,000 invention patent applications filed in China, up 34.5% from 2010. The US was second with 504,000 applications filed for their fiscal year to Sept 2011.

And most of the applications filed in China were by Chinese entities. Indeed, applications by Chinese applicants have been growing much faster than those by foreign applicants, and have outnumbered foreign applicants since 2003.

Chinese applicants are also filing patents overseas. Statistics from the World Intellectual Property Organisation (WIPO) show that China was the fourth highest country of origin for international patent applications in 2011 (behind only the US, Japan and Germany) having grown 33% that year.

Chinese telecommunications companies now occupy the first and third applicant positions (ZTE Corporation and Huawei Technologies, respectively).

The 12th Five Year Plan (2011-2015), approved in March 2011, also emphasises innovation. Indeed, the word appears in the document 39 times. The Plan promotes indigenous research and innovation in science and technology to support the transformation of China into an innovation country.

The Chinese government’s policies to encourage innovation and the filing of patent applications are working, both domestically and internationally. This means that the enforcement of IP rights within China will be increasingly important to Chinese companies and the local economy. Willing or not, the legal system is being forced to catch up and change. And that is good for all IP rights owners in China, whether Chinese or foreign, including Australian.

So, what’s the answer to the question?

For Australian based companies that do business in China, the answer is ‘Yes’. There is a point in registering your IP in China. IP is a priority for the Chinese government, and enforcement of IP rights is improving, both for locals and for foreigners.

www.AustralianBusinessForum.com.au

21

Cheviot Bridge is a proud partner of the Australian Business Forum and is delighted to support the China Lunch Club and Australia China Business Week 2012.

We hope you enjoy our wines.

To discover more about our wines please contact our International Business Manager Jenny Lai on +61 (8) 8342 3500 or email jenny.lai@cheviotbridge.com.au www.cheviotbridge.com.au 22

Australian Business Forum Âť Volume 4 Issue 2

A chief executive’s real job is to provide vision, inspire and create hope for company employees.

My job is to provide the tools our staff need to deliver on that vision.

An important element is face-to-face communication. I’m on a plane at least once a day. You have to talk to people – they know more about things than you do.

The gospel according to

John Borghetti CEO

By Anthony Black,Private Media

That’s the view of Virgin Australia chief executive John Borghetti, who likes to think of himself as a “people man”. He works in a people industry, a focal point, he says, that’s too often lost on other airline chief executives around the globe.

“Aviation can be complicated, but fundamentally it’s pretty basic …What separates airlines are the people they employ.”

After becoming chief executive in May 2010, Borghetti’s strategy included repositioning an airline that had lost its way.

The turnaround He says before joining the airline – Virgin Blue, as it was known then – it had deviated from its initial model as a low-cost carrier to a mid-tier one by introducing loyalty schemes, a limited range of lounges and premium economy. This led to higher costs, and competitors took advantage by offering cheaper fares.

Also, Virgin Blue was almost totally dependent on the leisure market, exposing the company to big losses from natural disasters. Borghetti says Virgin lost more than $100 million in six months due to the Christchurch earthquakes, Queensland floods and volcanic ash clouds.

“We had to diversify our revenue base from our dominant leisure market,” Borghetti says.

His “game change” strategy included competing against Qantas in the more lucrative business segment.

To entice business travellers, Virgin started a price war, undercutting Qantas business fares by 27%, which Borghetti says is sustainable over the longer term.

“We’re gaining on Qantas,” he says. “We now have about 30% of capacity in the market while Qantas has about 65%. Take out Jetstar, and Qantas has about 45%. I don’t call it a price war – I call it competition.”

A new vision Borghetti, a former Qantas senior executive and employee for more than 35 years, had a vision for Virgin just before he was appointed. He told the board: “If I’m going to take this role, here’s the strategy, so if you buy the strategy, then I’ll take the job.”

He says the company had too many brands – Virgin Blue, Pacific Blue, Polynesian Blue – and their different offerings confused customers. So he changed the company name to Virgin Australia last year to provide a new identity and a single customer proposition.

Aircraft interiors were modified for business class, new lounges were built, existing lounges were renovated and terminals upgraded. “On the service side, we had to create a network that gave us global coverage,” he says.

Why it works “To make a strategy work, it’s all about communication,” he says. “You have to be able to convince the staff that what you’re doing is the right way forward and is going to benefit the business. It’s easier to convince people if you believe in it.”

By all accounts, Borghetti’s strategy appears to be working. Investors will find out when he delivers the company’s full-year results in late August.

This story has been edited, for the full story at www.bit.ly/LC_VirginAustralia .

Join us at LeadingCompany.com.au, and learn how top leaders are changing the game. www.AustralianBusinessForum.com.au

23

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Australian Business Forum » Volume 4 Issue 2

Australian

future SMEs bright offshore see a

By Andrew Skinner, Head of Global Trade and Receivables Finance for HSBC Bank Australia

H

SBC research has found that more Australian SMEs will be eying off international trade opportunities in the next 12 months as they begin to discover that the benefits of expanding overseas now outweigh any previously perceived barriers to entry.

While more than a third of local SMEs currently import or export offshore, a recent HSBC research report points to an additional 21% planning to trade overseas in the next year. Of those with offshore aspirations, 85% will do it to expand their business, 35% are seeking to improve their margins and 14% intend to enter markets with lower competition.

It is clear from the research that Australian SMEs are feeling the effects of our two-speed economy with more respondents nominating the Australian economy as their main source of concern followed by the global economy, a reversal of similar HSBC research from last year.

When delving deeper into SMEs’ concerns about the domestic economy and their motivation for an offshore push, the appreciation of the Australian dollar over the past 18 months is a significant factor.

For exchange rate-sensitive SMEs, particularly in the retail and education space, the structurally high dollar has eaten up to 10% of their margins. There is a growing realisation that this new paradigm in Australia’s economy will require SMEs to look for alternate ways to grow their business, and for many this means extending offshore.

The research also shows that most SMEs intending to trade internationally in the next 12 months are casting their attention to China, the US and UK – all of which are already within Australia’s top five countries for two-way trade.

With China making up 25% of Australia’s trade flows, its proximity to us and the continued liberalising of its economy, it is a magnet for Australian SMEs. China is also shifting the focus of its economic growth from exports to more domestically driven consumer growth to cater for the urbanisation of its growing middle class.

This is creating a race amongst businesses to climb up the value chain to cater for the increasing sophistication of its consumers.

And as the Chinese economy becomes increasingly open to external operators, Australian SMEs are finding they have significant business advantages over less experienced in-country competitors in areas like construction, agriculture and business services.

Despite the US and UK economies recently experiencing subdued economic growth, both continue to be countries of choice for SME business expansion and trade. Moving overseas is a big decision for SMEs and the research suggests many feel more comfortable making their first step into offshore jurisdictions that have the same language, business and regulatory practices to Australia Whether considering the move offshore or bolstering trade ties, it is evident there are significant opportunities internationally for Australian SMEs, especially given Australian businesses are leaders in many industries including agriculture, mining and business services.

Whilst there are clear opportunities offshore, it is still important that SMEs do their homework to understand the legal, cultural and commercial dynamics within the markets they are looking to enter. To help bridge the knowledge gap, businesses should also consider working with a local trusted partner initially who knows the market and has established networks and contacts.

www.AustralianBusinessForum.com.au

25

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Fishing

For

China’s

New Opportunities

T

he nature of business opportunity in China is changing as the country’s economy undergoes a massive restructure. Yet although its nature is changing, opportunity in China remains as ubiquitous as ever, even amidst adverse influences that characterize the nation’s present business climate.

The adverse influences we refer to have been widely discussed in international media. They include rising costs of labour, materials and land; slumping export markets; high interest rates; and lack of access to affordable credit. These conditions are squeezing small and mid-sized firms throughout China, forcing many of the less competitive ones into bankruptcy.

In Wenzhou, for example, several midsized firms shut down last summer after their owners, unable to repay loans, fled town. The owners had been so desperate for credit that they were borrowing on the black market at rates as high as 300%. The closures left thousands of people without jobs, creating something of a crisis on the local level. Similar scenes have played out in other towns, on a smaller scale for the most part.

China’s millionaires aren’t the only ones in the country whose rising wealth is creating opportunities. As noted, wages are rising, and while that does represent higher costs for business, it also means that people have more cash to buy products and services.

We’ll leave it to professional economists to determine the extent to which wage hikes and inflation offset each other in the aggregate. What we can say with certainty is that millions of Chinese are enjoying higher standards of living every year.

Servcorp, Shanghai

Beijing’s plan to bring inland the development and prosperity that now characterizes much of the nation’s east coast -- one of government’s overarching objectives -- has been progressing apace. The plan requires large investments in infrastructure, which means big opportunities for many large multinational corporations.

Another good example of government policy driving business opportunity is the plan to make Shanghai the world’s top international financial centre. The Lujiazui Financial District, a rather bleak place just ten years ago, is now packed with office buildings where international and domestic banks, insurance companies and stockbrokers have taken up residence.

Alongside them is a growing number of consulting firms and various small businesses and entrepreneurs who service these financial conglomerates with needed products, services and innovations.

Changing preferences, values and habits of China’s consumers also represent opportunity. Young people with lifestyle habits that differ greatly from older generations are entering the workforce, creating opportunities for companies to create products that meet their unique needs.

Since opening our first China location in Shanghai in 1999, we at Servcorp have watched hundreds of entrepreneurs and SME owners flourish and grow as they used our business centres and services to launch ventures and expand their operations in the country.

High demand for our serviced and virtual offices in China isn’t surprising when you think about it. In a period of high costs and dynamically changing markets, a new business venture becomes more risky.

And a serviced or virtual office is a far less risky way to launch a business. In addition to providing speed to market and quick expansion Serviced and Virtual Office services obviate the cost of leasing and furnishing a traditional workspace, fitting it out with telecom and IT infrastructure, and hiring administrative staff. And if the venture fails, exiting is far, far easier.

So if you are thinking of opening or expanding a business in China, we’re here to increase the chances of your success.

www.AustralianBusinessForum.com.au

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Lenovo

SMBs

the Edge in the Global Market Lenovo

I

t’s the super-fast, ultra-wired digital age, and now, more than ever, Small and Medium Businesses’ (SMBs) face the challenge of competing in an increasingly global market with only the modest resources they have at hand. In the past, SMBs thrived in local markets where they could compete with businesses of similar calibre.

These businesses traditionally did not require, nor did they possess, the resources to manage a complex IT environment. Technological capability is fast becoming the critical success factor not only for large enterprise, but for SMBs too.

Now is also a good time for SMBs to evaluate how technology can help them better manage costs, grow their businesses, respond to changing consumer patterns, and increase their revenue.

Lenovo recently conducted research into SMBs’ IT utilisation patterns and this month issued a new line of ThinkPad solutions tailored to suit a range of professionals including government, education, and especially, SMBs.

frequently. With the new line of ThinkPads, ThinkCentre AIOs, Tiny and Edge series, Lenovo intends to help SMBs to improve their technology in the short term and also educate them on the importance of updating their IT more frequently so they can be fierce competitors in the global market.

The four most important factors influencing SMBs’ purchasing decisions of IT products were pricing, features, product quality, and longevity. The newly released line of ThinkCentre AIO computers including the new ThinkCentre M and Edge series not only meet these specific needs but also provide the ultimate in mobility, security and performance. The ThinkCentre Edge M72 is aimed at the small businesses that need an affordable AIO computer; the machine comes with productivity tools preloaded and supports two independent screens with VGA and DVI outputs.

Another suitable option for SMBs is Lenovo’s new Tiny series. Boasting measurements the width of a golf ball (34.5 mm), the ThinkCentre’s tiny form

factor provides uncompromised computing power in a small package. The M92p is the first desktop of its size to employ Intel vPro technology, featuring 3rd Generation Intel® Core™ i5 Processor with vPro Technology. The ‘Tiny’ provides a significant power reduction over a traditional desktop, making it the optimal choice for energy efficiency.

SMBs play a key role in the Australian economy, 42% of all employed people in Australia are in the SMB sector. In 2006, SMBs contributed to 46% of Australia’s GDP1 , yet in 2009, this number dropped to 35%2 . When 93% of online Australians access the internet daily and 71% use their smartphones to access the web3 , SMBs are missing out on potential opportunities if they don’t keep up with consumers’ preferred method of engagement. Lenovo’s offer for SMBs to give their IT systems an overhaul is the first step to enabling them to regain their huge impact on Australia’s economy.

Lenovo surveyed a range of Australian SMBs on their IT purchasing preferences with results indicating that the majority of SMBs update their IT equipment only when it fails or becomes obsolete. Although most SMBs understand the importance of technological innovation, few seem to have the drive to update their IT systems

www.AustralianBusinessForum.com.au

29

Same bed

different dreams

Chinese consumers have developed a liking for starbucks, pizza and event Santa, but it’s not about being western.

By Tom Doctoroff

A

pple has taken China by storm.

Starbucks can be found on practically every major street corner in coastal cities. From Nike to Buick to Siemens, Chinese consumers actively prefer Western brands to the domestic competitors. The rise of microbloggers and rock groups with names such as Hutong Fist and Catcher in the Rye and even the newfound popularity of Christmas all seem to point towards a growing Westernisation.

30

But don’t be deceived. Consumers in China may be increasingly modern and international, but they remain distinctly Chinese. If I have learnt anything from 20 years working as an advertising executive in China, it is that successful Western brands craft their message here to be “global”, not “foreign” — so that they can become vessels of Chinese culture.

China’s is a good for

Australian Business Forum » Volume 4 Issue 2

consumer culture starting point understand-

ing the nation itself, as it races towards superpower status. Though the country’s economy and society are evolving rapidly, the underlying cultural blueprint has remained more or less constant for thousands of years. China is a Confucian society, a quixotic combination of top-down patriarchy and bottom-up social mobility.

Its citizens face an ever- present conflict between standing out and fitting in, ambition and regimentation. They have no identity apart from their obligations to, and acknowledgment

Luxury items are desired more as status investments than for their inherent beauty or craftsmanship. The Chinese are now the world’s most avid luxury shoppers.

According to Global Refund, a company specialising in tax-free shopping for tourists, the Chinese account for 15 per cent of all luxury items purchased in France, hut less than 2 per cent of its visitors.

by others. The clan and nation are the eternal pillars of identity. Western individualism — defining oneself independent of society — doesn’t exist.

Various youth sub-tribes intermittently bubble to the surface — see the recent rise of “vegetable males” (Chinese metrosexuals) and the “Taobao maniacs” (aficionados of the auction website Taobao).

But self- expression is generally frowned upon, and societal acknowledgment is still tantamount to success. Arts students are considered to be inferior to engineering or accounting graduates. Few dare see a psychologist for fear of losing “face” or being branded sick. Failure to have a child is a grave disappointment.

Chinese at all socioeconomic levels try to climb the ladder of success while working within the system, not against it.

In Chinese consumer culture, there is a constant tension between self-protection and the display of status. This struggle explains the existence of two seemingly conflicting lines of development. On the one hand, we see stratospheric savings rates, extreme price sensitivity and aversion to credit-card interest payments. On the other, there is the Chinese fixation with luxury goods and a willingness to pay as much as 120 per cent of one’s yearly income for a car.

The speed with which the citizens of China have embraced all things digital is one sign that things are in motion in the country. But e-commerce, which has changed the balance of power between retailers and consumers, didn’t take off until the Chinese need for reassurance was satisfied. Even when transactions are arranged online, roost purchases are still completed in person, with shoppers examining the product and handing over their cash offline.

Every day, the Chinese confront shredded social safety nets, a lack of institutions to protect individual wealth, contaminated food products and myriad other risks to home and health. The instinct of consumers to project status through material display is counter¬balanced by conservative buying behaviour. Protective benefits are the primary consideration for consumers. Even high-end paints must establish a lack of toxicity before touting the virtues of colourful self-expression.

Even digital self-expression needs to be cloaked in anonymity Social networking sites such as Sina Weibo (a Chinese version of Twitter), Renren and Kaixing Wang (Chinese versions of Facebook) have thrived. But users hide behind avatars and pseudonyms.

To win Chinese buyers, brands have to follow three key rules. First and most important, products that are consumed in public, directly or indirectly, command huge price premiums relative to goods used in private. The leading mobile phone brands are international. The leading household appliance brands, by contrast, are cheaply priced domestic ones.

The second rule is that a product’s benefits should be external, rather than internal. Even for luxury goods, celebrating individualism — with Western notions such as “what I want” and “how I feel” — just doesn’t work in China. Automobiles must make a statement about a man on his way up. Spas and resorts are better off when they promise not only relaxation, but also recharged batteries. Infant formulas must promote intelligence, not happiness. Kids are not taken to Pizza Hut so that they can enjoy pizza; they are rewarded with academic “triumph feasts”.

Beauty products must help a woman “move forward”.

The last rule for positioning a brand in China is that products must address the need to navigate the cross currents of ambition and regimentation, of standing out while fitting in. Men want to succeed without violating the rules of the game.

Luxury buyers want to show mastery of the system yet remain understated. Young consumers want stylishness and acceptance, so they opt for more conventionally hip fashion brands.

Even China’s love affair with Christmas advances a very Chinese agenda. Santa symbolises progress; he represents China’s growing comfort with a new global order, one into which it is determined to assimilate, without sacrificing the national interest. The American dream — of wealth that culminates in freedom — is an intoxicating one. However, whereas Americans dream of “independence”, the Chinese crave “control” of their destiny and command over the vagaries of daily life.

www.AustralianBusinessForum.com.au

31

32

Australian Business Forum Âť Volume 4 Issue 2

Shangri-La Hotel, Guangzhou Where Business and Pleasure Blend Seamlessly

S

trategically located in the city’s new business and commercial district, Shangri-La Hotel, Guangzhou is adjacent to the Guangzhou International Convention and Exhibition Centre and is within easy access of a host of major attractions and nearby transportation. Nestled amidst 5,800 square metres of tranquil gardens overlooking the Pearl River, the hotel offers exceptionally spacious and luxurious accommodation in 704 guestrooms and 26 serviced apartments. With a minimum size of 42 square metres and up to 305 square metres of space for suites, all guestrooms feature complimentary Wi-Fi and broadband Internet access, flat screen televisions and panoramic windows from which to enjoy splendid views of the Pearl River or the vibrant city of Guangzhou.

Additionally, the Horizon Club offers a range of exclusive privileges that include private check-in and check-out at the Horizon Club Lounge on Level 34, use of private meeting room for up to two hours per day, daily buffet breakfast, soft drinks, evening cocktails and more.

From Cantonese favourites to the best of Italian cuisine, eight award-winning restaurants and bars offer an international range of culinary choices. WOK TOO Café features a food theatre-style concept and international delicacies. Summer Palace serves regional Chinese cuisine in stylish surroundings. The chefs team at coolThai is delighted to introduce signature Thai dishes prepared with specially imported Thai herbs and spices. Enjoy a slice of Italy at il Forno with a rich choice of authentic Italian cuisine prepared by our resident Italian chef. Nadaman offers a worldrenowned Japanese fine dining experience with a touch of sophistication. With traditional Asian décor as a backdrop, the Lobby Lounge serves gourmet coffees, afternoon teas and evening cocktails.

Relax over a freshly mixed cocktail prepared by the highly trained bartenders at Lift Bar while enjoying the panoramic views of the Pearl River. The Poolside Bar and Grill offers refreshing tropical drinks as well as tempting salads, burgers and other casual fare.

An ideal event destination in South China, the hotel has 6,000 square metres of meeting and banqueting space that offers abundant choices and fantastic adaptability.

The expansive hotel grounds include a 2,000-square-metre lawn for open-air events and functions. The 2,240-squaremetre pillar-free Pearl River Grand Ballroom with an 11-metre-high ceiling can accommodate up to 1,280 guests for banquets or 3,000 participants for meetings. The elegantly appointed Guangzhou Ballroom offers spectacular views across the Pearl River, while the back-of-house elevator allows for easy transportation of heavy equipment. Eight smaller function rooms are available for banquets or receptions that are more intimate. The 100-seat auditorium with a raised stage is a preferred venue for press launches, lectures or presentations.

For those wishing to energise before a meeting or unwind after a long day, the hotel offers the very best in fitness and wellness facilities.

The Health Club is a fully serviced club with world-class workout facilities, including 18 pieces of equipment by Life Fitness®, two outdoor tennis courts, a 15-metre x 30-metre heated indoor swimming pool, a 1,500-square-metre picturesque outdoor pool, a 2,000-square-metre backyard putting green and more. Private personal training can be easily arranged. In addition, the signature CHI, The Spa at Shangri-La blends traditional Asian healing philosophies with modern-day luxury to create an experience of pure indulgence and spiritual revitalisation.

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25 Years

memorable experience promote China in Australia

ABF Exclusive Interview with Telstra sponsored Businesswoman Helen Wong

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t is 40 years since the Commonwealth of Australia and the People’s Republic of China established diplomatic relations in 1972. ABF has an exclusive interview with Telstra sponsored businesswoman Helen Wong who has 37 memorable years tailoring and organizing tours to China for Australians since 1975.

You were the first to introduce Australian groups to what was a mysterious China. When was the first group you brought to China under the umbrella of Helen Wong’s Tours? What were the most challenges you faced at that time? Could you give us a story as an example?

Helen: I wasn’t the first to introduce Australian groups to China, although I did pioneer group travel to a number of regions beyond the major cities of Guangzhou, Shanghai and Beijing. The year for Helen Wong’s Tours was 1987 and some of my groups of travellers were on international study programs, including one led by former Prime Minister Gough Whitlam and his late wife Margaret (1993). The challenges were many, from the slowness of getting through Customs and Immigration to ensuring the hotels were up to standard for Westerners. In many ways I needed to educate the Chinese staff as to what was required to meet acceptable standards – simple things such as cleaning bathrooms to which side the knife and fork should be presented at the dinner table. The local staff was always curious to learn, although it would take time. Domestic airline cancellations often created problems and the need to counter them by making adjustments to the itineraries.

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Helen Wong’s Tours’ release of its exciting 2012-2013 China program.

Could you tell us more about this program?

Helen: As it is a special time for us, to celebrate the 25th anniversary of Helen Wong’s Tours, we decided to make some dramatic changes to the look of our China and Vietnam brochures and add a few new guided tours without detracting from our popular itineraries. New to the China program is an exciting 15-day Cruise and Rail Journey linking a Yangtze cruise from Chongqing to Shanghai with a high-speed train experience from Shanghai to Beijing. There’s also a new 14-day Family Affair itinerary suitable for parents with young children. It links Beijing and Shanghai with Hong Kong (and the magic of Disneyland) and Macau, home of the House of Dancing Water spectacular. As many as nine new itineraries have been added to our Vietnam program, including the return of Myanmar. Cambodia and Laos are also featured in the expanded program.

Australian Business Forum » Volume 4 Issue 2

What has been your most memorable travel experience to date?

Helen: As you can understand there have been countless memorable travel moments. But one which stands out was the day we drove from Shanghai to uncover fascinating Zhouzhuang, an ancient little known town and now a popular spot in our program. It was thrill to find such a treasure with its traditional tiled roofed houses and stone arched bridges.

Could you describe China’s change over the past 30 years in your experience?

Helen: From a basic destination where the major form of transport was a pushbike and shopping mainly centred on Friendship Stores to a country brimming with European cars and Designer Label shopping centres, change has been swift, especially in the major cities like Beijing and Shanghai. Reliable air travel is now matched by a growing network of high-speed rail services – a far cry of what it was like to travel around China 30 years ago. Hotel accommodation has also greatly improved with a vast array of five-star establishments sprinkled around the country, not just in the major cities. Modern technology is very much imbedded in China.

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DE OF I T E H T RIDINEGSE TOURISM TION CHIN A C U D E ONAL I T A N R E INT INA: RE? A F S T H N C IN DO STUDE HOW uncil, ness Co ina Busi stralia Ch Au e th pport n. sociatio oud to su ns is pr umni As nnectio China Al China Co the Australia lia ra st d Au a an am Chin AustCh

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FOOD & WINE: RED SPICE ROAD

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ed Spice Road is contrastingly big and bold, and rather beautiful in a red way. There’s nothing lowkey about it. The space is cleverly designed, with a long bar and a number of areas that can be used for dining, or for sitting around over a drink and a chat.

Mostly the tables are large and communal, although there are a couple of smaller ones for a more intimate gathering. There are two nice surprises – a real courtyard, open to the sky and with living plants in it, and a fabulous large room dominated by an immense red lantern over a ring table. Two crescents form the ring, which can seat dozens side by side.

On the style front, polished floorboards are complemented by purple upholstered walls, cheerful oriental couches, ottomans and lampshades that can only be inadequately described as spider-web spheres.

Giant red lanterns and glass-panelled ceilings are set above communal tables, whose shoulder-to-shoulder intimacy really sets the tone of the space.

The food is Thai, with some enterprising modern influences. The menu is designed around dishes to share although,

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at a pinch, you could order on your own.

There are also really good tasting menus (minimum of two to share) for lunch and for dinner. If not the tasting menu, consider scallops with smoked trout, coriander and kaffir lime to start, and a salad with shredded chicken, mint, bean noodles, lemongrass and coconut to follow. The choices are many and the flavours are zingy, each dish having lots of lovely flavour bursts, though most are not too chilli-fierce. The drinks list includes lots of cocktails, a good range of beers, and a smallish wine list well-chosen to match the food.

Melbourne’s hardly hurting for another Asian themed restaurant, but when one pops up that looks as fabulous as Red Spice Road, qualms are set aside, drinks are poured and you just get on with the task of finding out if this latest addition to the city tastes as good as it looks. John McLeay, formerly of Livebait fame, has managed with aplomb to turn his focus to South-East Asian cuisine and offers a brief but sensational menu, which reassures diners that Red Spice Road can definitely back up its style with more than a little substance.

Ideal for dinner for two or a one

Australian Business Forum » Volume 4 Issue 2

hundred corporate clients.

Since opening in 2007, Red Spice Road has risen through the ranks to become one of Melbourne’s best restaurants.

Critics hail chef John McLeay’s modern interpretation of pan-Asian cuisine and reinforce his long held reputation as one of our city’s culinary stalwarts.

Situated in the heart of the city, a stone’s throw from the Bourke Street Mall and boasting Australia’s largest red lantern above a unique circular 60-seat communal table. Red Spice Road also has three unique Asian themed portraits specially commissioned by renowned Australian artist David Bromley.

The menu and wine list are long and varied and the price won’t break your budget. The restaurant has several distinct areas including two private rooms, seating 22 and 30 respectively, a courtyard under the stars and skyscrapers, and a buzzing bar with an Asian themed cocktail list.

There are bar specials every weeknight, as well as early bird dinner and lunch banquets for only $25 per person.

FOOD & WINE: RED SPICE ROAD

Red Spice Road QV , Opening hours: Lunch and dinner, 7 days a week.

31 – 37 Artemis Lane (Enter off Russell St), Melbourne Tel: +61 3 8660 6300 info@redspiceroad.com www.redspiceroad.com

Opening hours: Lunch and dinner, 6 days a week.

27 McKillop Street, Melbourne Tel: +61 3 9603 1601 info@redspiceroad.com www.redspiceroad.com

RED SPICE ROAD 27 McKillop Street Melbourne Tel: +61 3 9603 1601 Email: info@redspiceroad.com Web: www.redspiceroad.com

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under the stars and skyscrapers, and a buzzing Since opening in 2007, Red Spice Road has bar with an Asian-themed cocktail list. risen through the ranks to become one of There are bar specials every weeknight, as Melbourne’s best restaurants. well as earlybird dinner and lunch banquets for Critics hail chef John McLeay’s modern China Club willand bereinforce held in Melbourne, Sydney only $20 per person. and Shanghai quarterly. interpretation of Lunch pan-Asian cuisine It provides a vibrant and for C-level executives to share their China his long held reputation as one of ourenvironment city’s and experiences. China Lunch Club Membership now available.

Opening hours: culinary knowledge stalwarts. all enquiries or info@abforum.com. au Lunch 9898 and dinner, 7 days a week.

Situated in For the heart of the city, contact: a stone’s +61 3 8689 throw from the Bourke Street Mall and boasting Australia’s largest red lantern above a unique circular 60-seat communal table. Red Spice Road also has three unique Asian-themed

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The bouquet is vibrant and fresh, but the palate takes it on to another level, with almost piercing fruit, the portion taken through mlf largely unseen. This is a wine for cellaring at the right price.

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Australian Business Forum » Volume 4 Issue 2

Destinations 2008 C A B E R N E T S A U V I G NO N The wine is vibrant ruby red with purple hues and a bouquet of lifted cassis, spice, minty fruit and some dark chocolate with toasty oak.

Rich and full bodied,this wine has crisp acidity, bucket loads of elegant blackcurranty cabernet fruit,firm tannins and integrated oak. Enjoy now or cellar with care for 5-10 years.

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AUTO REVIEW

Audi A6 L e-tron concept: luxury plug-in revealed

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he Audi A6 L e-tron concept has been unveiled at the Beijing motor show combing Audi China’s best selling model with the company’s plug-in hybrid electric vehicle (PHEV) technology.

The Audi A6 L e-tron is an engineering study in the luxury class with Audi aiming to show what a Chineseproduced ‘New Energy Vehicle’ could look like.

The A6 L e-tron sees a 155kW 2.0-litre TFSI petrol engine join forces with a 70kW electric motor. The e-tron technology allows for three power options: internal combustion power only, electric power only, or a combined hybrid mode.

The Audi’s electric-only mode will see travel of up to 80km possible at a constant speed of 60km/h. As well as boosting power output to provide strong acceleration, the system also recovers energy during braking.

Other features include an operating state indicator, lithium-ion battery charge indicator and an energy flow indicator. A large MMI monitor also displays a bar diagram of average fuel economy and indicates the amount of recovered energy over five-minute intervals.

The hard drive for the navigation system on the Chinese concept has also been reconfigured to recognise 29,000 Chinese characters.

A production version of the Audi A6 L e-tron would follow on from Audi’s previously launched electricassisted models: the Q5 Hybrid Quattro, A6 Hybrid and A8 Hybrid.

The exterior styling of the Audi A6 L e-tron fits with previous e-tron concept designs – e-tron, e-tron Spyder, R8 e-tron, and more recent A1 and A3 e-trons – and is highlighted by a single-frame grille with thin cross-bars, rear bumper garnish and silver 21-inch multi-spoke wheels.

Inside remains mostly unchanged from the production A6 except for the standard tachometer being replaced by a ‘powermeter’ that indicates total drive-system power on a scale of zero to 100 per cent.

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ADDRESS Suite 3, 15-29 Bank Street, South Melbourne VIC 3205

Australian Business Forum » Volume 4 Issue 2 TEL 03 9608 8288

FAX 03 9608 8200

EMAIL newspaper1341@foxmail.com

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