New figures released by China’s Bureau of Statistics are suggesting the world’s second-largest economy is continuing to weaken. But Australians on the ground in the country say things are nowhere near as bad as we’re being led to believe.
AUTHOR: Alyshia Gates for SBS
Shanghai is China’s biggest city. With a population of 14.35 million, that’s four times Sydney. It’s fast paced, change happens quickly. And the global financial hub is volatile.
But Shanghai AustCham Chairman Peter Arkell says that doesn’t mean the economy is suffering.
“What’s happening is volatility of course but it doesn’t necessarily translate into flow on impacts into the broader economy,” Mr Arkell says.
“It comes down to China trying to change from a command-driven economy across into a consumption-driven economy”
From his base in Shanghai, Z-Ben Advisors associate Nicholas Britz provides advice to Australians keen to invest in China.
“We are seeing a slowing of China’s economy, however it’s also largely a transition, so it comes down to China trying to change from a command-driven economy across into a consumption-driven economy,” Mr Britz says.
While there’s no denying that the Chinese economy is weakening, it has been growing so rapidly for so long that a downturn really had to happen.
Mr Arkell says foreigners need to better interpret the markets, and not read the situation through western text books.
“We need to be careful not to interpret too much of the way the Chinese stock market and the Shanghai stock market in particular is reacting or behaving and say ‘well, if this happened in Australia, this is what would flow on with the economy. It’s quite a different beast, this market,” he said.
Australian Agribusiness company Elders has found just that, and China is now dominating its radar screen.
Meat exports are worth $100 million a year – they’re growing at a rate of 25 per cent.
Elders supplies 350-top end restaurants and hotels throughout the country. China General Manager Craig Aldous says growth opportunity is everywhere.
“If it’s growing at seven per cent rather than 10 per cent, we really don’t pay too much attention to it. It’s growing, it’s growing strong”
“I’ve never heard the words doom and gloom used in China, you know. If it’s growing at seven per cent rather than 10 per cent, we really don’t pay too much attention to it. It’s growing, it’s growing strong. And we see that directly reflected in our business. There is growth opportunity everywhere,” he says.
David Kier has lived in China for 22 years, and has worked for AustCham and brought Subway and Dominos into the country with great success.
He says he hasn’t seen a consumer slowdown in his front-end businesses, and is in the process of establishing a start-up called Freedom Road Travel.
“We think this will grow to be an Australian-owned, China-based travel business that has offices ultimately in the US and other countries very much run at an international standard,” he says.
AustCham’s Peter Arkell and Craig Aldous from Elders say Australia needs to look at China to expand.
“I think we need to keep our feet on the ground, keep our wits about us and in doing business here it’s a very competitive market, it’s a very active market but it’s an exciting market as well – it’s full of potential. I’d love to see many many more Australian businesses here,” Mr Arkell said.
“You’re going to see a lot more integration of supply chains over the next 10 years between Australian producers and Chinese companies, so that’s one reason why Australians need to get more involved and understand it,” Mr Aldous said.