Vol6 issue1 digital version by Australian Business Forum

VOL 6 ISSUE 1 - DIGITAL

AUSTRALIAN

BUSINESS FORUM Record Delegates attend Australia China BusinessWeek 2014 Melbourne Is your franchise ready for Chinese Investors? Insights into how to do business with China Chinaâ&#x20AC;&#x2122;s Digital Evolution Why it is so important to Australian Businesses

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Australian Business Forum Magazine is published by Australian Business Forum Melbourne Postal address: Po Box 568 South Yarra vic 3141 Contact Details: Tel: +61 (0)3 8689 9898 Email: info@abforum.com.au Twitter: @ausbusforum ABForum.com.au

CONTENTS

Editor Judith Davenport Marketing & Communications Elizabeth Harding Art Director/Design Rochelle Wang Digital Media Ahmed Arayne Marketing Assistant Jonathan Zhang Contributers Caroline Hong David Thomas Janey Lee Mark Tanner William Chen Advertising Media/Sales Simon.You@abforum.com.au Noahm@abforum.com.au Chris.hunter@abforum.com.au

Record Delegates attend Australia China BusinessWeek 2014 Melbourne

Chinaâ&#x20AC;&#x2122;s Digital Evolution Why it is so important to Australian Businesses

Finding the right interpreter

Is your franchise ready for Chinese Investors? Insights into how to do business with China

investment opportunities wine industry in South Australia

Support for overseas R&D

20 Australia & China Small and Medium Enterprise- key to economic progress

29 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.

Franchising in Australia

33 Unlocking the Chinese Market in Australia

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Record Delegates attend Australia China BusinessWeek 2014 Melbourne

Iâ&#x20AC;&#x2122;m pleased to support the launch of the Australia-China BusinessWeek. Australiaâ&#x20AC;&#x2122;s relationship with China is going from strength to strength and at the heart of that relationship is trade. China is Australiaâ&#x20AC;&#x2122;s largest trading partner, not just in resources, but also in services and agriculture. Trade means more jobs and a stronger economy. I congratulate the Australian business forum for your foresight in promoting this event. Video welcome and greeting from Prime Minister The Hon. Tony Abbott MP provided a great opening message and start to ACBW 2014 Melbourne Luncheon.

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Record attendance for the tenth forum fo AustraliaChina businessWeek Series, with over 1,000 delegates and visitors attended ACBW 2014 Melbourne held on 27th March at Crown, Melbourne. Presented by NAB The whole day ACBW 2014 Melbourne event included seven high profile events Breakfast, Luncheon, Forum, Chinese Forum and Mix at Six networking function.

ACBW 2014 Melbourne Forum consisted of two sessions where delegates heard from a range of Australia-China business leaders and panellists on the following topics: • • • • • • •

China Economic Outlook 2014 and beyond Case Study by Robert Gratton, CFO, Jurlique: Organic & Biodynamic Skincare; How Jurlique opened the door into China Chinese Investment in Australia China Online – Your Digital Strategy The Next Big Wave - Chinese Investment into Australia’s Agriculture and Food Sector How Economic Reform and the New Shanghai Free Trade Zone Will Impact Australian Business China’s New “Premium” Consumer and What This Means For Australia

ACBW 2014 Melbourne Breakfast featured keynote speech by respected financial journalist Alan Kohler and providing an in-depth review of China’s current economy, as well as a forecast of the coming months with a focus on trends, challenges and opportunities for the SMEs. ACBW 2014 Melbourne Luncheon hosted senior Chinese and Australian Government representatives, leaders from the Chinese business community together with top executives and industry leaders. ACBW 2014 Chinese Forum, presented in Mandarin targeted local and overseas Chinese investors and entrepreneurs looking for business opportunities in Australia. It featured educational presentations on the Australian business and investment landscape, as well as latest trends and policies in key industries agriculture, property and tourism.

The Hon. John Brumby, independent director of Huawei Technologies and former Premier of Victoria delivered the Australia-China BusinessWeek 2014 Luncheon Keynote Address Other Keynote speakers at the Luncheon included: • Huang Guobin, Acting Consul-General of PRC in Melbourne • David Olsson, Board Member of AustraliaChina Council, Chairman of the ChinaAustralia Chamber of Commerce in Beijing

ACBW 2014 Investment Showcase sessions offered Australian businesses a unique opportunity to showcase their projects to potential Chinese partners and investors. Two projects were presented – winery and property. ACBW 2014 Melbourne Mix at Six is a highlyestablished business networking function providing exclusive opportunities to forge strong personal relationships with senior business people, government decision-makers and senior practitioners across many different fields in both Australia and China.

Presents

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Presents

NOW IS TIME TO BOOK YOUR PLACE IN AUSTRALIA’S MAJOR BUSINESS MISSION TO CHINA SME’s - Mid Size Enterprises

Australia-China BusinessWeek 2014 China 26-30 May, Guangzhou & Shanghai

ACBW 2014 Guangzhou-Shanghai, presented by National Australian Bank, supported by NSW government, Austrade, The Department of Foreign Affairs & Trade and the China National Committee for Pacific Economic Cooperation, CCPIT Guangdong and SME Association Guangdong.

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your business with an effective China Strategy

Discover how to effectively engage with Chinese investors Build your business & brand with China digital strategy & E-commerce How to manage growing pains and crossborder supply chains We will show you where the opportunities are for your company to build its maximum value in China

Delegates attend key ACBW functions: Breakfast, Luncheon, Forums and networking event Mix At Six, plus the Guangzhou Investment Showcase, Shanghai Free Trade Zone Visit and AustChamâ&#x20AC;&#x2122;s ACBA dinner.

SHOWCASE

your brand at the ACBW 2014 Guangzhou Investment Showcase

Pitch products & services to potential Chinese buyers at our trade show Create a bilingual profile in official ABF Delegate Booklet which will be distributed widely in China. This is your brand identity, expertly translated into Mandarin and ready for the China market Network with Chinese delegates to review Australian products, services, investments & opportunities products , services, investments & Opportunities

PARTNER

with motivated Chinese investors & potential partners

B2B business matching opportunities with qualified high-net-worth Chinese investors Engage with a potential Chinese investor from within our network. This B2B business matching service may be the opportunity you need to take you directly into the China market

Book Now Limited Spaces left W: www.abforum.com.au | E: info@abforum.com.au | T: 03 8689 9899 |

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IS YOUR FRANCHISE READY FOR CHINESE INVESTORS? Insights into how to do business with China

A By David Thomas, ACBW Forum Chair

fter leading many Australian delegations to China, I have observed some key things that businesses must do to be ready for and engage successfully with the Chinese market opportunity. An unprepared and misinformed expansion into a market such as China, with a complex regulatory system and unique market niches has the potential to threaten your business viability and operations in Australia. Having a Chinese partner can dramatically assist with the intricacies of the market, however partnerships must only be entered after careful due diligence. One thing you will always need to remember: in the Chinese market, you have to show up to win – you must be able and willing to invest the necessary face-time to be successful in China. Unfortunately, there is no shortcut – you must be physically present, there is no “autopilot” for deals or growth in the Chinese Market. When pitching your franchise and business proposition to Chinese investors, the following five points are crucial as a start.

1. FACE TO FACE TIME In a culture where emails are the dominant form of communication, it is often hard to understand why someone in China will not respond to your

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email communication. Chinese culture values face to face time, it values calls over emails and the best way to develop successful business relationships is to spend time meeting with your counterparts and sharing food and drinks. The best way to embark on your China strategy is to be on the ground in China. Cold calling or pure business relationships don’t work in China, cracks will start appearing once the dust has settled from the initial excitement.

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2. MAKE FRIENDS FIRST, DO DEALS SECOND There’s a saying in China that you don’t talk business “until the third cup of tea!” In other words, you build the relationship first and only then should you focus on the business deal. This can appear tiresome, long-winded and unnecessary, but it’s the way business is done in China and you ignore this at your peril. Make the time to get to know your potential business partners, extend the hand of friendship and tell them about your country, culture and interests. When you’ve exhausted every possible topic of conversation, and when the timing feels right, offer to start talking business!

3. USE A PROFESSIONAL TRANSLATOR When pitching to a Chinese partner, you will need your documents in Chinese. Translating professional documents is not as simple as asking a bilingual member of staff or friend to do it for you. This is a very common mistake. It may get the job done quickly, painlessly and at no cost, but how would you like your business described in Chinese as striving to “succeed when the horse arrives” or your business operations and goals to be misconstrued?

4. TAKE YOUR OWN INTERPRETER, BE PART OF A DELEGATION The process of facilitating and interpreting in a business meeting in a cross cultural environment with language barriers is an art as well as a science. Professional interpreters spend years perfecting their craft, a process of study, practice and observation. Not only do they need to be highly proficient in both languages, but they also need to learn the method of capturing the meaning, flavour and expression in the language, which is so much more than a simple translation of the actual words. Having your own interpreter who understands your business and objectives in depth will prevent any misunderstandings or cultural insensitivities. For those testing the waters, it is highly recommended to join a delegation on your initial visits to China as this provides a platform and mutual meeting ground for genuine and motivated businesspeople. You will have access to an established and valuable program, assistance in identifying suitable business contacts, allows you to meet, network and communicate with a mixture of experienced and new-to-China Australian delegates also involved in the Chinese market. Australia-China Business Week (ACBW) is among the well-established delegations that delivers a lot of value in the complex China market. ACBW 2014 will take a group of delegates to China’s two key economic hubs, Guangzhou and Shanghai, with a combined population in excess of thirty-five million people.

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www.AustralianBusinessForum.com.au 5. FOLLOW UP When following up with key contacts and new relationships from a meeting or conference, it is important to send your follow up email in Chinese and follow up with a phone call (preferably by a Chinese person). You will need to work hard to develop a strong line of communication with them from a distance (which is why you need to plan to be on the ground in China regularly!). It is important you plan your next visit – face time is crucial after the first meeting and is vital for long term success. These are just five basic rules to consider when starting your engagement with Chinese investors, entrepreneurs, business leaders and Government officials. These small investments will make a world of difference to your reputation as a company.

If you’re looking at going into China market but still don’t know where to start. Here’s an opportunity for you to visit China this May with our ACBW 2014 Guangzhou & Shanghai delegation. Presented by NAB and supported by NSW government, Austrade, The Department of Foreign Trade and Economic Cooperation of Guangdong Province, CCPIT Guangdong and SME Association Guangdong and AustCham Shanghai, ACBW China event includes an excellent week of VIP functions, networking, business matching sessions and business showcase. Go with a group of your peers to meet high-net-wealth Chinese delegates and learn from the Australian businesses who have already established their China presence. For more info regarding ACBW Guangzhou and Shanghai, please check abforum.com.au/events/ acbw2014china or call +61386899899.

INVESTMENT OPPORTUNITIES wine industry in South Australia

ocated south of Adelaide close to the famous McLaren Vale wine region, both properties have been consistently producing high quality grapes and wine for many years. Both properties have been managed by managers with over 15 years experience. The same team are willing to continue managing the properties for the new owners. 1ST OPPORTUNITY - WINERY AND VINEYARD Land Size: 7.5 hectares land in the Adelaide Hills Wine storage: 4.6million litres stainless steel storage capacity Warehouse: 8,000 barrels of wine storage capacity and temperature controlled Vineyard: Award-winning A grade Shiraz and Cabernet Sauvignon. 2010-2013 vintages stored on site.

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2ND OPPORTUNITY - VINEYARD Land Size: 304 hectares situated 20 minutes from McLaren Vale Grapes: High quality A grade to C grade wine Other inclusions: Underground water access entitlements and shares in nearby water pipeline

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By Pursuit Business Migration For more information, please contact Jasmine Lim at +614 02428094 or jasmine@ pursuitbusinessmigration.com

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CONFERENCE

Travel The Digital Silk Road Develop your China Online Strategy Brisbane: 20 OCT 2014 Melbourne: 22 OCT 2014 Sydney: 24 OCT 2014

SOCIAL MEDIA

ECOMMERCE

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SEO

MOBILE MARKETING

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OVERVIEW

OPPORTUNITIES

How does an Australian company learn about the new platforms and media emerging in China? What is the nature of China’s current digital marketing landscape? How can brands use channels such as Weibo and other online marketing tools to engage with Chinese consumers?

With no shopfront costs and over 500 million potential online shoppers, China’s e-commerce industry is ripe with opportunity for Australian businesses.

These primary questions are the ones that will be addressed in The Australian Business Forum ‘s upcoming China Online 2013 Seminar Series. It is well known that China has the world’s most active environment for social media, making it a must for Australian companies to incorporate digital marketing into their strategic planning when entering or expanding their business operations in China. Chinese microblogging network Sina Weibo continues to grow rapidly and reached 503 million registered accounts by the end of 2012.

Consultancy firm A.T. Kearney estimates that the Chinese e-commerce market has grown 78 per cent annually since 2006, and many experts believe there is much more scope for growth. This Seminar Series is thus an ideal opportunity for your organisation to get one step ahead of your competition and enhance your industry knowledge & exposure. Hosted by The Australian Business Forum, the Seminars provide you with the perfect opportunity to gain new knowledge and reinforce your brand to industry decisionmakers & Social Media specialists, amongst other attendees.

BUILD YOU BRAND Participation at the Seminar’s also offers you exclusive opportunities to forge strong personal relationships with senior business people & decision-makers across many different industries.

China’s e-tail market (consumer-facing e-commerce) is the world’s second largest (after the US), with an estimated $US210 billion in revenue last year. Since 2003, the market has posted a compound annual growth rate of more than 110 per cent. By 2020, China’s e-tail market could be as large as today’s markets in the US, Japan, Britain, Germany, and France combined. To take advantage of the trends, the Seminars are designed to help you to strategically build your brand online both in Australia and in China: News from Beijing is that an entire ecosystem of home grown companies has flourished and are seeking alliances: For example, Tencent Holdings’WeChat app has amassed more than 300 million users in under 3 years. They now have global ambitions. For Australian businesses looking to secure a foothold China’s booming e-commerce market, it is now not only a matter of navigating the cultural divide, but also the digital one.

CONFERENCE CONTENT • • • • •

Hear from the experts on how to Optimise your Online presence, inc. Mobile Ecommerce tactics for the Chinese market How Social Media works differently in China Online marketing trends in China over the next 12 months The alignment between Chinese online consumers and their GovtSponsor

We look f www.AustralianBusinessForum.com.au

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“Accessing R&D Tax assistance has been invaluable in the growth and expansion of the company. ” Managing Director, Mal Watkinson, Specialised Vehicle Solutions

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“R&D Tax assistance gives us the boost we need to innovate on the farm every day.” Owner, Peter Bender, Huon Aquaculture

“The R&D Tax Incentive provides a source of capital which is crucial for our success.” Managing Director, Dr Michael Ottaviano, Carnegie Wave Energy

“The R&D Tax Incentive helps us achieve our best, it supports the R&D that ensures we are offering the best product on the market.” General Manager, Marshall Vann, PWR Performance

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CHINA’S DIGITAL EVOLUTION Why it is so important to Australian Businesses

By Mark Tanner, China Skinny

here’s no shortage of clichés describing China’s evolution. In a little over a generation, bicycles and beige suits have given way to Bentleys and Burberry. Crumbling shacks have been replaced by shiny skyscrapers encircled by superhighways. Yet, behind the bright lights, shrinking family sizes and urban migration, one of the most influential and rapid changes taking place in China is the rise and influence of the Internet. Smart- phones costing less than $80 have made the Internet accessible to the masses and has driven up the rate of connectivity across China. Of the 618 million online Chinese at the end of 2013, over 500 million of them accessed the Internet from their mobile. Those online are the demographic with the means and inclination to purchase premium Australian products and services. Chinese consumers are heavily influenced by what they read on social media and the web, and with good reason. Less than ten years ago, the main source of news and information for Chinese was through the little-trusted state-run television, radio and newspaper networks. With the rise of the web and social media, Chinese consumers discovered another channel to find and share information - and they took advantage of it - nine out of ten online Chinese used social media in the past six months, the highest portion globally. The transparent nature of social media allows anyone to comment, positively or negatively,

which is why more consumers are trusting of brands they’ve seen on social media. 95% trust a brand more if they’ve seen it social media. 55% claim to have contributed to a discussion about a western brand on social media. A 2013 Accentuate survey found the Internet is the channel most consumers turn to when looking for information about a brand or business. 38% regularly increase their brand awareness and 48% increase their purchase intent through a company website; less than 32% do the same through advertisements in state-run television, print and radio. Add the explosive growth of online shopping into the mix, and the 90% of Chinese who have an app installed on their smart-phone, and it becomes clear that Internet provides the most targeted, scalable and cost effective way to reach and influence consumers for any Australian business selling in the fiercely competitive Chinese market. www.AustralianBusinessForum.com.au

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Helping to grow your business in China. Nihao Global

Your Personal Assistant in China NIHAO GLOBAL is a professional services organisation which provides tailored solutions for companies across the globe entering the Chinese market. Expanding or starting a business in China can be a daunting affair. Our business is designed to help you overcome some of the more common obstacles associated with doing business in China and be instrumental in assisting you to achieve your goals. We have an extensive network of language experts across dozens of fields located in 19 of China’s major cities. Our Services include: • Interpretation • Translation • Market Research For further information: www.nihaoglobal.com E-mail: services@nihaoglobal.com

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FINDING THE RIGHT INTERPRETER

think one of the oddest international incidents that happened last year was the fake sign language interpreter provided for Barack Obama during Nelson Mandela’s memorial in South Africa. Putting aside the security issues, how did this fake interpreter come to be selected for such a crucial role based on his sign language skills? This reminds me of the English-Chinese interpretation industry I have been a part of for years.

a series of particular tests and ranked accordingly regardless of their certifications and examination results. This will ensure that a sign language interpreter with no qualifications or ability is not up onstage with the world’s leaders, offending deaf people everywhere.

Firstly, I’d say it is a good idea for companies or any organisation not well versed in language provision to outsource their language related jobs to a specialised service company, particularly for those important events and deals. The reasons being not only because it releases staff from certain jobs they are not familiar with but more importantly getting the experts to organise and coordinate the job leads to a much higher possibility of success.

Last but not least, Barack Obama was lucky that there was no threat to his safety. From a business perspective, we can consider this as the behavior and attitude of the servicing interpreter. Suppose the interpreter’s ability was not in doubt, however a bad attitude and poor manners can also cause problems during diplomatic occasions or business negotiations. So personality and work ethic must also be a consideration when hiring an interpreter.

Secondly, a good language service organisation should conform to a specific set of guidelines and processes that ensure the quality of the end product for the client. Every interpreter before being appointed to any job should be put through

So in summary, when hiring an interpreter whether through a services company or not, check their qualifications, their previous experience and attitude to their work the same as you would for any future employee.

By Janey Lee, Nihao Global

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www.infobytes.com.au

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SUPPORT FOR OVERSEAS R&D

ustralian companies looking to expand into China need to focus on innovation, much of which is underpinned by investment in research and development (R&D). Australian Bureau of Statistics data shows that businesses that innovate are three times more likely to export and 18 times more likely to increase the number of export markets targeted. They’re also more than twice as likely to increase employment and over 40 per cent more likely to report increased profitability. The R&D Tax Incentive is the Australian Government’s principal measure to encourage industry innovation through investment in R&D. The Incentive provides a 45 per cent refundable tax offset for entities with a turnover of less than $20 million per annum and a 40 per cent offset to other eligible entities. In certain circumstances, R&D activities conducted overseas may qualify for support. Businesses from across Australia are using the Incentive to drive their international work. For example, Curvessence, a leading Australian intimate apparel label, was able to access assistance from the R&D Tax Incentive to undertake their first R&D project overseas, utilising expertise in China.

As strong as metal with a promise of more support, Curvessence technology could soon be replacing the underwire, a long time staple of lingerie, to the daily comfort of women around the world. Head of Curvessence Marketing, Ben Cohen explained “The majority of bra-cup R&D is undertaken in China. Identifying that our new product would need a new type of bra-cup to match, undertaking this work overseas with access to the best in the business made great sense.”

By AusIndustry

Mr Cohen expressed that Curvessence would not be at the stage they are today without support from the R&D Tax Incentive. “R&D tax assistance has helped our business grow and reinvest,” he said. One smart yet simple idea is taking this Australian company global. Mr Cohen stated “Companies will only remain competitive through innovation; this program has been instrumental in ensuring the success of our project. The R&D tax offset ensures that innovative Australian businesses remain relevant and competitive.” The R&D Tax Incentive helps over 10,000 companies each and every year invest in R&D supporting innovation and growing business. www.AustralianBusinessForum.com.au

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Australia & China Small and Medium Enterprise-

KEY TO ECONOMIC PROGRESS “Smart governments and societies invest in the SME sector, because they recognize SMEs are the key to economic progress, and the cradle to prosperity”

sense a new wave is here in Australia and emerging. The new sexy is in the Small and Medium Enterprise (SMEs) businesses!

By Dr Caroline Hong

Collaboration between government and the business sector has always been viewed as a positive step for economic success. However, collaboration with the SME sector is the smart key to ensure a sustainable vibrant and competitive economy. In Australia, small and medium enterprise businesses make up 99.7% of total business. More importantly, they are the biggest employer, contributing to 70% of employment in Australia. In China, the figures are similar. SMES make up more than 99% of total business and contribute to more than 60% of total employment. Our Australian Prime Minister Hon Tony Abbott MHR, has often said ‘It’s the business sector that creates jobs. It’s not government that creates jobs’ Mr Abbott then goes on to reassure Australians that

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red tape will be reduced and Australia is open for business. NSW Deputy Premier and Minister for Trade and Investment, Hon Andrew Stoner MP of the premier state in Australia, has the biggest numbers of SMEs ( more than 650,000), says that NSW business sector spends A$6.3 billion in Research & Development and it takes only 2 days to register a business. NSW like the rest of Australia is definitely open for business. SMEs definitely are the fastest growing sector of economies worldwide. SMEs are the hotbeds for entrepreneurs, innovation, passion and jobs creation In Australia the SMEs also plays a significant role. The mid-market is estimated to contribute more than $425 billion in value to the Australian economy. The mid- markets sector has created more than 3.2 million jobs, equivalent to 35% of all industry value added. As we see a rapidly growing middle class in China, many arising

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from small businesses that progressed quickly from their success, SMEs are changing the business landscape nationally and globally. In China, there appears to be an increasing recognitions of the need for major state owned enterprise reform. Profits of many SOEs have declined whilst profits for privately owned enterprises have increased. In fact a lot of China’s urbanization goals were achieved by POEs which contribute to 80% of the China’s new employment. Reform to support SMEs in China will remove the perception that of a disconnect between the SOE’s favoritism and the POE productivity. Many SMEs in the Asia, China and Australia know there are enormous opportunities in the region and globally. However many are unaware of the potential opportunities of Free Trade Zones, Free Trade Agreements and much more. For example, the China Shanghai Free Trade Zone, Qianhai Economic zone and many others in China already are golden opportunities not only reserved for big corporations.

The China Asean Free Trade Area (CAFTA) which came into effect 4 years ago, in January 2010 is another example. CAFTA is the world’s largest free trade area with 1.9 billion people, a GDP of more than $9 trillion. After the European Union and the North American Free Trade Area, CAFTA is the third largest in trade volume. So, SMEs in Australia, right in the heart of Asia, can benefit from an open, cooperative and collaborative economic and cultural relationship with China. SMEs certainly want policy makers and governments of both countries to reduce bureaucratic burden, minimize business regulation, and help them access global markets and funds. There is every reason for government to support SMEs, invest in SMEs, make it easier for SMEs to reach out globally to international markets. It makes smart sense to look after the SMEs. Do that well, and they will drive the economic success and prosperity for the people in respective countries, with entrepreneurism, innovation, new jobs and economic success.

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10th April, Melbourne

Keynote Speaker: Dr Heling Shi, President, AusChina Investment, Management Group

Exclusive Business Networking

China Lunch Club China Lunch Club will be held in Melbourne, Sydney and Shanghai quarterly. It provides a vibrant and environment for C-level executives to share their China knowledge and experiences. China Lunch Club Membership now available. Contact: +61 3 8689 9898 or info@abforum.com.au

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31ST YEAR of PUBLICATIoN

30th anniversary issue

IN THIS ISSUE ®

The Third Dimension Five Game Changers 3D – First Impressions The Diaper Index Too Many Hot Spots Zero-Sum Games

October 2013

October 1983

Asia in Tomorrow’s World

The robots are here

– their children are coming asiatodayinternational.com

Annual subscription including password access to ASIA TODAY ONLINE, Australia AUD250 (plus GST), Asia/Europe/USA/Canada USD250. Print Post Approved PP240725/00001

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Welcoming our 30th year . . . OVER 30 years, Asia Today International magazine has established itself firmly as Australia’s most authoritative business journal reporting on Asia – a first reference source for both international corporations and SMEs trading, investing and providing services to business in Australia and Asia. We have earned our special credibility, which brings with it access to the people who matter in business and government – and the critical business information that business leaders need. We look forward, assessing issues with potential to impact on existing and future business, drawing input from business and government leaders in Asia and across the world. We identify social and political change likely to impact on existing business – or to create new business opportunities. We remain committed to excellence in reporting the business that matters in Asia.

To join our subscriber lists, visit www.asiatodayinternational.com Your subscription will cover ATI Magazine, password access to daily online updates, our subscriber e-brief alert, and a free online listing in our Asia Directory of the products and services you offer.

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INTERNATIONAL

10/10/13 5:11 PM

投资澳洲

Think Global Consulting facilitates business and investment between Asia and Australia. We work with individuals, entrepreneurs, companies and institutions to build viable, sustainable and powerful connections by leveraging our networks and relationships in both developed and emerging markets.

思环顾问公司致力于促进澳大利亚与亚洲各国之间的商业投资往来。凭借我们在发达国家和新兴国家市场的人际网络，我们与各界精英人士、企业家、公司及机构紧密合作，并建立了长久、可行、高效的联系。实施证明，我们能为客户提供独特的渠道，帮助他们同亚太地区的政府及产业决策人直接进行洽谈。

We advise our clients on market entry and business development, and manage investments sources from China and the Asia Pacific region into a range of attractive sectors, including Agriculture, Resources, Education, Renewable Energy, Technology, Property Development and Financial Services.

我们不仅为客户提供关于市场准入及业务拓展方面的战略性建议，并且协助亚洲各国的投资者投资在极具吸引力的产业中，包括农业、资源、教育、可再生能源、技术、房地产开发及金融服务产业。

We work with a number of leading Australian institutions to meet the objectives of our clients and to maximise all opportunities. Our approach is open, collaborative and focused on delivering results.

我们的委托人与多家澳大利亚龙头企业共事，以确保达到客户预期的目标并充分开发各类商机。方式既开放、协作，同时又注重结果的成功。

投资澳洲

To express interest in investing or doing business in Australia, please contact Think Global Consulting on +61 2 9267 1488 or email us at support@thinkglobal.com.au

如果您有意在澳大利亚进行投资或开展业务，请通过电话 +61 2 9267 1488 或电子邮件 support@thinkglobal.com.au方式联系思环顾问公司。

Investors Direct Financial Group (IDFG) was founded in 2001. Since its inception providing mortgage finance to property investors and developers, IDFG has now become a one-stop-shop property investment group with offices in Melbourne, Sydney, Brisbane and China.

IDFG has 7 business units: Investor Education Property Advisory Financial Planning Mortgage Solutions Property Management Property Development and Funds Management.

Contact

Gloria Lin on 1300 663 836 Gloria.lin@investorsdirect.com. au www.investorsdirect.com.au

IDFG has served over 14,000 English speaking clients in Australia as a full service property solution provider. It has advised on the financial planning and implementation of hundreds of millions of dollars in property investment and development for its clients and strategic partners. IDFG had recently expanded into the Chinese market mainly by forming strategic partnerships with other experienced Chinese business operators. Our products for the Chinese market are: 1) Australian investment properties consistent with FIRBâ&#x20AC;&#x2122;s approval policy 2) SIV compliant Australian property funds IDFGâ&#x20AC;&#x2122;s business model relies heavily on our ability to produce significant financial benefits to our strategic partners while strengthening their client relationships, and we have good track record working with businesses from small one man operations to large public companies. We are currently looking for more strategic alliances with Chinese operators such as immigration agents, property marketers, accountants, mortgage brokers, media companies, travel agents or business brokers for client referrals or product distribution.

Vol 6 Issue 1

“ Join Now and save $1000 on Australia-China BusinessWeek-China registration plus over $3000 in ABF event tickets P.A.” “ ABF Corporate Club Membership provides VIP access to ABF Events, invitations for China Lunch Club Luncheons, attractive partner discounts and a host of other benefits. ”

ABF Corporate Club is part of the Australian Business Forum Group Membership provides access to the ABF Events, Media and business matching platform.

ABF Corporate Club provides a premium corporate membership for organisations seeking to grow and enhance their business interests in Australia and China. It is exclusive, informative and represents excellent value.

Membership Enquires info@abforum.com.au 03 8689 9899

www.AustralianBusinessForum.com.au

ShineWing Hall Chadwick Corporate Advisors & Certified Practising Accountants

Contact information 联络方式 For more information please contact: 如需更多信息，请联系： David Chu 朱国正 International Business Partner 国际商务合伙人 david.chu@shinewing.com.au Phone（电话）: +61 3 8613 0003

Talk to us about business with China The Melbourne Office is the first office of Shine Wing outside of the Asian region. Being at the forefront of inbound and outbound transactions, we are Corporate Advisors to Chinese businesses and high net worth individuals based in Australia and China. We assist with Business Services, helping organisations and high net wealth individuals manage their international and local Taxation compliance and corporate affairs. ShineWing also provides seamless Audit Services to Australian companies with business activities in China to enter China through our Extensive Chinese Network.

ShineWing CPA China Celebrates 30 Years

SHINEWING CPA has become the largest domestic CPA firm in Beijing. The significance of the firm’s position is not only measured in size, but also anchored by its vision and to build a Chinese CPA firm of international quality and standards.

Matt Schofield 史高菲 Audit Partner 审计合伙人 matt.schofield@shinewing.com.au Phone（电话）: +61 3 8613 0016 Michael Smith 史密夫 Corporate Advisory and Forensic Partner 企业顾问及法务合伙人 michael.smith@shinewing.com.au Phone（电话）: +61 3 8613 0018

Melbourne Office 墨尔本所 Phone（电话）: +61 3 8613 0000 Level 1, CITIC House 99 King Street Melbourne VIC 3000 www.shinewing.com.au

Congratulations to our Chairman, Mr Zhang Ke winning the 2013 “Global Accountancy Power 50 Annual Award” organised by the international authoritative accounting body IAB. The award has been held for three consecutive years. This is Mr Zhang’s first participation.

ShineWing International Offices 信永中和分所 Beijing 北京 Shenzhen 深圳 Chengdu 成都 Shanghai 上海 Xi’an 西安 Qingdao 青岛 Tianjin 天津 Changsha 长沙 Changchun 长春 Yinchuan 银川 Ji’nan 济南 Dalian 大连 Kunming 昆明 Guangzhou 广州 Fuzhou 福州 Nanjing 南京 Urumuqi 乌鲁木齐 Hong Kong 香港 Singapore 新加坡 Japan 日本 Australia 澳大利亚

Vol 6 Issue 1

FRANCHISING IN AUSTRALIA

he franchise sector is a major contributor to the Australian economy contributing more than $131 Billion in revenue. A federally regulated business sector, Australian franchising can boast world’s best practice and a remarkable success rate. Franchising has been remarkably successful in Australia, with Australia/NZ having the world’s highest per capita penetration of franchised systems in the world. What is franchising? Franchising is a business method where the franchisor and franchisee work collaboratively to meet the needs of customers. Typically the franchisor will provide intellectual property and a business system, which the franchisee will implement in a region or area or with its customers. Franchising enables small business to compete effectively against major chains and corporations by harnessing the energy of motivated owner operators under a common brand and system, accessing economies of scale and group marketing not otherwise available to small businesses. Many successful small businesses in Australia operate under the franchise model. Franchising operates across Australia making an important contribution not just in capital cities but in regional centres and rural Australia. Strong systems, compliance and substantial charitable and community involvement make the franchise sector an excellent corporate citizen at Federal, State and local community level.

What role does the Franchise Council of Australia play in Australian franchising? The FCA is a not-for-profit organisation of more than 600 members including franchisors, franchisees and advisers/suppliers. The primary role of the FCA as the peak industry body for the Australian franchise sector is to ensure a fair and balanced regulatory framework that allows the sector to continue to prosper. The FCA provides a range of formal and informal educational programs and networking activities for its members. The FCA’s calendar features over 150 events across Australia each year. The FCA also aims to improve the quality of Australian franchising through franchisee pre-entry education programs, monitoring of behavior through the FCA’s Member Standards, new member assessment and ongoing educational workshops and forums. The FCA also produces a range of educational booklets, texts and publications.

By Franchise Council of Australia

More information can be found at www.franchise.org.au +61 3 9508 0888 info@franchise.org.au

The National Franchise Convention Convened by the Franchise Council of Australia, the National Franchise Convention is the pre eminent franchising event in Australia. Attended by hundreds of Australian and international franchisors, the event showcases keynote speakers, franchising experts, panel case studies from some of Australia’s best known brands and a bustling trade exhibition. This is the best possible event to attend for those looking to gain a better understanding of Australian franchising and valuable contacts within the sector. www.AustralianBusinessForum.com.au

The Institute of Public Accountants www.AustralianBusinessForum.com.au

Established in 1923, The Institute of Public Accountants (IPA) is an innovative and flexible professional membership body for accountants with a proud heritage of representing the interests of members and the accounting profession. With more than 24,000 members and students globally, we are fast becoming the membership body of choice for professional accountants worldwide, and are Australia’s most innovative accounting organisation according to the 2012 BRW Most Innovative Companies list. One of three professional accounting bodies in Australia, we represent the interests of members across 51 countries and are recognised for our quality and professionalism as an active Full Member of the International Federation of Accountants (IFAC). In conjunction with the University of New England, we offer members an educational pathway that will lead you to a globally recognised, Australian University designed and delivered Master of Commerce (Professional Accounting). IPA members are known for their empowerment via formal legislative recognition. IPA membership demonstrates superior levels of education and workplace experience, adherence to a strict code of ethics, current knowledge of legislative and technical information and a strong commitment to continuing professional development – evidencing to your clients that you’re professionally qualified and committed to your profession. To find out more about the many benefits you’ll have access to as an IPA member, visit us at

publicaccountants.org.au/become-a-member

Vol 5 Issue 4

Vol 6 Issue 1

CHINA SOUTHERN MORE FLIGHTS MORE OFTEN

so overwhelming that we extended the concept to all flights that operate via our southern Chinese hub of Guangzhou, formerly known as Canton.

Although we are the largest airline in China it’s only in the past four years that we have really expanded our international route network and developed our global presence.

In coming months we will offer our first direct flights from Guangzhou to Frankfurt, New York, Sarajevo, Mumbai and Sao Paulo (double check BB), further enhancing visa-free stopover options for passengers flying our Canton Route to overseas destinations via our exciting Guangzhou hub.

hina Southern Airlines is undergoing rapid global expansion and Australia is leading the way by developing and initiating product enhancements during a time of exciting change for one of the world’s largest airlines.

By China Southern

Our ever-expanding fleet has been bolstered with China’s first B787 Dreamliners and we will soon be flying new B777-300ER aircraft to supplement our fleet of Airbus A380 and A330s on key Australasian routes. All our Australasian routes are now serviced by the latest Airbus aircraft offering flatbed comfort in business class and personal screens in all cabins.

Australasia has been one of our key targets and we’re thrilled with the swift growth that has seen scheduled services rise from just seven in 2009 to 48 return flights per week during the summer peak of 2013.

Although China Southern has been flying “down under” since the start of the new millennium, it’s only these past few years that the airline’s Kapok flower tail-fin has really begun making its mark on the Australian landscape - and we look forward to welcoming more Australians on board to sample our true Cantonese hospitality on their next overseas journey.

To meet the increasing demands of business and leisure travel between Australia and China we are aiming to increase our Australasian services to 55 weekly flights by 2015 as we continue to consider additional destinations. The success of our Canton Route from Australia and New Zealand to London and Europe has been

www.AustralianBusinessForum.com.au

Vol 5 Issue 4

Vol 6 Issue 1

UNLOCKING THE CHINESE MARKET IN AUSTRALIA

t doesnâ&#x20AC;&#x2122;t matter what the industry, China presents such an exciting opportunity for all Australian businesses. But the most important thing is getting started, and what better way to get your Chinese marketing started than right here in Australia? There are 700,00 Chinese living in Australia, 170,000 Chinese International Students enrolled and 750,000 Chinese tourists visiting every year, spending twice as much and staying twice as long as British tourists. But not only is Australia a great starting point, it also presents an easy and affordable opportunity to test the market. Even

though what the Chinese like in Australia might not translate 100% into what the Chinese like back in China, in most cases it will give you a pretty good indication of how the Chinese in general respond to your brand. Then there is Chinese Social Media. With one of the highest Social Media penetration rates in the world (90% of Chinese internet users are on Social Media), Chinese Social Media (Weibo, WeChat etc) is one of the easiest and most

cost effective ways of reaching a large Chinese audience in Australia. A recent study found that 40% of Chinese shoppers say they use Social Media to make purchasing decisions. However, that figure could be even higher for the Chinese in Australia. Being in a foreign country, surrounded by unfamiliar brands, Social Media becomes their go to source to find out what is good and what is bad. Finally, Chinese Social Media users in Australia could potentially become your brand ambassadors to China. They often rely on Social Media as a way to keep in contact with all their families and friends back in China. So as they post positive experiences with your company to their feed, not only will it be shared with other Chinese Social Media users in Australia, it will be seen by all their

By William Chen, ChinaKey

family and friends back home, planting the seeds for when you eventually open up in China.

www.AustralianBusinessForum.com.au

The Thepremier premiermagazine magazine devoted devotedexclusively exclusivelytoto Australia AustraliaChina Chinatrade tradeissues. issues. www.AustralianBusinessForum.com.au

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Contact Contact CarlCarl Jetter: Jetter: +613 +613 9650 9650 1598 1598 carlj@chinaconnections.com.au carlj@chinaconnections.com.au or Jamie or Jamie Mi: Mi: jie.mi@chinaconnections.com.au jie.mi@chinaconnections.com.au www.chinaconnections.com.au www.chinaconnections.com.au

Vol 5 Issue 4

Vol 6 Issue 1

DUE DILIGENCE = RISK MITIGATION

ue diligence generally involves consideration of the legal, financial and commercial aspects of a business or corporate entity.

commit, the costs of not having appropriate advice may mean you overpay, or the long process of renegotiation. You may also lose the window for efficient upfront tax planning.

A due diligence review will empower a business with the knowledge to assess and mitigate the risks of acquiring a target business. It is an insurance policy against future problems, or paying too much for an asset. After all, it is not in the vendor’s interests to reveal all…

2. BE CLEAR ON DEAL FRAMEWORK

The due diligence process should identify risks for the target to assist in determining how best to mitigate these risks. Risks identified will vary and can include poor quality of accounting and accuracy of financial information, allowance for working capital demands and fluctuations, management capabilities and incentives post acquisition, and retention of knowledge. Key reliance on one-off factors, such as large customers, critical suppliers, single product focus or reliance on few key employees will all increase the risks to a new acquirer. Three Key Lessons

Be clear on the framework of the deal, ie what is the price negotiated specifically based on, including: • • •

We have seen many transactions where an inadequate pricing framework has already been agreed with the vendor. Seek advice before you

Historical and/or forecast profitability Reference balance sheet Level of normal working capital

The framework will assist in identifying areas of focus during the due diligence investigations.

3. ACQUIRING THE BUSINESS VS THE ENTITY If you buy the shares in a company, you take on all the historic financial, legal and taxation issues which increase the transaction risks significantly. Traps include: •

1. INVOLVE YOUR FINANCIAL, TAXATION AND LEGAL ADVISORS AT THE TRANSACTION PLANNING STAGE

By Shinewing Hall Chadwick

•

Taxation liabilities – are the taxes up to date? GST? FBT? If there is a tax audit, you will be responsible for non-compliance in the past. Outstanding legal matters, product warranties, and contract issues are all assumed by the acquirer.

In dealings between China and Australia, we have observed many cultural and conceptual differences between the parties. It is important to bridge the gap in understanding and expectations to ensure a smooth transaction – you can never pay too much for good advice! www.AustralianBusinessForum.com.au

www.AustralianBusinessForum.com.au

ly k e e W Q B l ta n Orie M ag az in e in A us tr al ia Th e Le ad in g C hi ne se

WeChat Wechat ID：OBQweekly Weibo

Website ww w.bqweekly.com.au

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京青年周 Weibo ID：OBQ东方北

E-newsletter 1629@qq.com please email to newspaper sion ver ine onl to apply for a free

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weekly.c q .b w w w n o s Visit u ABOUT OBQ

Oriental BQ Weekly (OBQ Weekly) is the Australian version of BQ Weekly magazine. It is jointly invested and published in Australia by Ostar International Media Group (OIMG) and Beijing Youth Daily Group. OBQ is a comprehensive weekly magazine that covers politics,finance, culture and consumption issues and is distributed throughout Australia. Printed with A3 gloss papers in full color, OBQ is contributed with exclusive reports and interviews from renowned journalists in Melbourne, Sydney, Perth, Adelaide, Canberra and Beijing. OBQ is the onboard Chinese magazine on China Southern Airlines. It is also distributed in major star hotels, luxury shops, restaurants, offices, convenient stores, and weekend Chinese schools. OBQ is posted weekly and delivered directly to the hands of our upper class customers all over Australia. The OBQ website and newsletter covers over 30,000 internet users.

Vol 5 Issue 4

Melbourne Head Office Suite 3, 15-29 Bank Street, South Melbourne VIC 3205 Phone: (03) 9608 8288 / 9608 8232

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Vol 6 Issue 1

EXPORT MARKET DEVELOPMENT GRANTS: Helping Australian SMEs grow

he government-sponsored Export Market Development Grant (EMDG) scheme seeks to assist small and medium (SME) enterprises to compete in international markets by reimbursing up to $150K of eligible expenditure associated with developing export markets.

AM I ELIGIBLE?

WHAT IS THE EMDG?

•

The EMDG scheme is administered by Austrade and can reimburse 50% of eligible export activity expenses, up to a limit of $150K, to entitled Australian businesses. These expenses can include: • • • • • • • • •

Overseas representation costs such as salaries, travel, rent and relocation costs; Engagement costs for marketing consultants; Costs of marketing visits such as travel, accommodation and meal expenses; Communication costs such as ISD/IDD calls; Costs associated with providing free samples to potential buyers; Participating in overseas trade fairs, seminars and in-store promotions; Promotional literature and advertising costs such as domain registration, website development and printing costs; Costs associated with bringing potential buyers to Australia and IP registration, renewal and insurance costs.

To be eligible, you need to: •

•

Be an Australian entity (individual, partnership, company association, trust, or statutory cooperation); Have an annual income of no more than $50M for the financial year preceding the grant year and; Be the principal owner of the Australian goods or services and an Australian citizen at the time of incurring the expense.

By Watermark Advisory Services

IP EXPENSES & THE EMDG The EMDG scheme provides a cost category to cover up to $50K of costs associated with granting, registering or renewing IP rights under a foreign law. These expenses can be incurred in Australia, so long as it is for securing rights overseas. If a business chooses to obtain IP insurance, the premium costs for worldwide protection may also be claimable under the EMDG. These costs are eligible only if they are done for promotional purposes, i.e. there is documented intent that the IP or ‘know-how’ will be used overseas to develop an export market for the good/service.

www.AustralianBusinessForum.com.au

Vol 6 Issue 1

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