By Ray Evans CEO and Founder of Australian Business Forum
As China adjusts to a slowing GDP and economy, outward investment by high and ultra-high net-worth Chinese individuals and corporations is rising to a new benchmark, particularly in Australia.
Over 1 billion Australian dollars will be invested by Significant Investor Visa applicants over the next 12 months as new regulations requiring applicants to invest from a product-based investment scheme to services. As Peter Cai, Editor of the China Spectator explained, “a new wave of Chinese venture capital is expected to pour into Australia as investors look for new growth areas.
The upgrade to the SIV regulations and introduction of the PIV program come at a time of growing demand for Australian residential and commercial property. This demand is flowing into property syndicates and investment funds and has reached heights which were unforeseeable just three years ago. This flow is being felt across Australia. Despite the media focus on ‘hot property tickets’ in Melbourne and Sydney, China Town Developments and the Gold Coast are increasingly attractive to Chinese billionaires. This investment is on a scale not seen since the Japanese property investment boom of the 1980s. The agribusiness sector in Victoria and the Northern Territory is no stranger to recent interest – especially dairy and cattle farms – as China contends with Indonesia as a main market for prime beef.
The New South Wales Government has expertly cultivated their sister state relationship with Guangdong province. Sydney is the gateway city to Australia and New South Wales has drawn the largest share of inbound investment as a result.
Additionally, as the Australian business landscape shifts to support small businesses and the start-up community, so does Chinese investment focus. We are steering away from a product-based investment scheme to services. As Peter Cai, Editor of the China Spectator explained, “a new wave of Chinese venture capital is expected to pour into Australia as investors look for new growth areas outside of China’s frothy start-up sector”. As Australia’s technology and start-up sector becomes more attractive, we can anticipate immediate growth. Cai elaborates, “the flow of Chinese venture capital money into Australia will be aided by Canberra’s new immigration policy which requires investors to allocate at least 20 per cent of the required investment into the start-up sector.”
The Australian Government has woven their awareness of the shifting business landscape into ChAFTA and other state governments including Tasmania, Victoria and New South Wales have also developed proactive and successful China strategies.
The new phase of the change has diversified the profile and size of Chinese inbound business missions. Long gone are the junket missions of the past, now replaced with high-profile business delegations from the four corners of China.
From a personal perspective, I recall when Australian Business Forum (ABF) launched its first Australia China BusinessWeek (ACBW) forum. Over nine years ago in Melbourne we struggled to obtain 50 delegates to attend the first forum. his year ACBW underwent considerable expansion to become the major annual Sino-Australian business forum across China and the Australian eastern seaboard. This year ACBW was host to over 5000 engaged businesses, entrepreneurs and newly arrived Chinese business migrants. The Australia China Business Council, AsiaLink, Confucius Institute and other key Australia-China organisations are experiencing the same ‘China factor’ shift.
ABF was fortunate to host the Fujian Government at the Australia China BusinessWeek 2015 in Melbourne and Hobart in March. From our first hand experience we saw real results achieved for the delegation of twenty five Fujian business leaders. A major success was a contract for salmon supply to Yonghui – a Chinese supermarket chain. ABF also signed an MOU which resulted in seventy five Australian business delegates unite to make the Australian Pavilion at the China International Fair for Investment in Xiamen as part of the ACBW 2015 China Mission.
This November in Melbourne, ABF will welcome an inbound delegation of one hundred and fifty ultra-high net-wealth business leaders from China for the inaugural Fortune Forum 2015 Australian Summit. This is the first time the Fortune Forum will be held outside China and is a unique opportunity to connect with sought-after premium investors.
The noticeable changes in the profile of ABF event attendees and delegates has reflected the advancing and broadening dialogue between Australia and China. Just this year we have witnessed a tangible increase in attendees from Agriculture, Property, SIV, Health and Migration sectors. As the landscape of the Australia- China relationship continues to evolve, industry needs to act and engage China and drive the new era that ChAFTA will bring.
All state premiers and the majority of business in support of ChAFTA and the Turnbull Government are dedicated to bringing the agreement into force by the end of 2015. With this broad support the shift to a service-led economy, rather than a resource-led economy will accelerate over the coming years, as Asia’s middle class trebles in size to 3 billion people.
“China is a sleeping lion, and when she awakes, the world will shake. The lion China has already awakened, but this is a peaceful, pleasant and civilised lion,” quoted by Chinese President Xi Jinping evoking Napoleon during his visit to France to commemorating 50th anniversary of diplomatic relations between China and France.[/wlm_ismember]