BEIJING lost its Olympic Games 2000 bid to Sydney by two votes. That probably did China a favour.
BEIJING lost its Olympic Games 2000 bid to Sydney by two votes. That probably did China a favour. It would have been a big stretch to bring pollution, transportation and a host of other problems under control in time to step into the global spotlight.
Now they have another seven years to get it right. About $US20 billion will be spent on Olympic facilities in Beijing. This is a drop in the ocean. Something much bigger is just around the corner. Talks in Geneva this week will ring the bell for the last lap in China’s 15-year marathon effort to become a member of the World Trade Organisation. Negotiators believe the few remaining issues will be resolved in time for China’s formal entry at a November conference in Qatar.
That will eventually mean easier access and lower entry costs to the Chinese markets for up to 1,500 categories of Australian goods. Import tariffs on agricultural products are slated to fall an average of 17 per cent. The tariff on beef should drop from 45 per cent to 12 per cent. That should be music to the ears of Peter Holmes a Court and the long-term plans of his about-to-be-floated Australian Agriculture Company.
The incoming director-general of the WTO, former prime minister of Thailand, Supachai, compares the expanded market to a “big pie” that all can share. No doubt implacable opponents of the Middle Kingdom would like to throw a pie in its face, but few can fault its record on the economic and trade front.
China is virtually the last man standing this year. Asia has been dragged down by anaemic growth in the US and Europe. Singapore is in recession, and Hong Kong exporters are reporting the highest rate of payment defaults by customers for 10 years.
China is not immune from weaker overseas demand. Its exports in the first half of this year rose 8.8 per cent to $US124 billion, down from a blistering 27.8 per cent last year. Economists believe the slow down will only shave around 0.5 per cent from growth, because exports account for less than 20 per cent of the economy.
On the domestic front, the Chinese Government has finally achieved what Japan has failed to do. It has lured consumers out of their swollen savings accounts and into the shops. Retail sales jumped 10.3 per cent in the first five months this year to 1.5 trillion renminbi ($181 billion), helped by a wealth effect from a sharply higher stock market. Foreign firms are pouring money into the country at the rate of $US1 billion a week in anticipation of WTO entry.
China’s already trillion-dollar GDP is still growing at 7.5 per cent. It has expanded five-fold in the past 20 years. Make your own projections for the next 20.
Clearly, Western Australia cannot afford be left out of that opportunity. Nor should it be. Miners, engineers, construction firms, farmers, winegrowers, lobster fishermen, computer software designers, smart card technology, education and business services are among the potential beneficiaries of tumbling tariffs and quotas. WA is represented in most of these areas.
It is true that we lack a solid manufacturing base, but it is not that puny. New figures from the Department of Industry and Technology show that 72,700 manufacturing workers produce $5.7 billion, or around 9 per cent, of State income.
Futuris, through its Air International subsidiary, has built a significant beachhead in China. Fallen stock market star Orbital licenses technology to scooter makers on Hainan Island, while ERG should have prospects, having already landed big contracts for its ticketing technology in Hong Kong.
Size need not matter. Small to medium-sized companies do well in the Chinese market. Do not underestimate the benefits of geographical proximity to China, or of being on the same time zone, particularly when marketing services.
One good way to learn more about these opportunities is to call in at the Hay Street offices of the Western Australian Chinese Chamber of Commerce. The WACCC is one of the most active of its kind and has more than 500 members offering first class business networking. You have got to be in it to win it.
