The impact of China's opening-up to Australia

By Philip Beck

Though one can draw from numerous stats which highlight the power of China's economy, one in particular stands out as far as the Southern Hemisphere is concerned.

The incremental growth of China's economy this past year was greater than the entire growth of the whole of the Australian economy. 

That growth will continue to increase as China's middle class expands, from 150 million in 2015 (the year when CHAFTA came into effect) to 450 million by 2020. 

Photo taken on May 27, 2016 shows the Sydney Opera House with light patterns during the Vivid Sydney light show in Sydney, Australia.[Photo: Xinhua]

As China transforms its economy from the "factory of the world" to one based around goods and services, it's on-track to build an economy that will be larger than America & Europe combined by 2049, the same year the country will celebrate the 100th anniversary of the founding of the People's Republic of China.

For Australia, that means we are indeed a "Lucky Country," provided we choose to take hold of this massive opportunity that's sitting on our door-step. We should not continue to lose market share by steadfastly focusing our attention on nations where our value of trade is either declining, or at best, growing at 1-2%.

Like any business, Australia needs to consider where we can get the most value for our stakeholders. That focus should be China. It has the potential to double our total trading volume.

China's demand for added-value food products, education, health services and elderly-care (where Australia has a tremendous reputation) is set to more than triple in the next 7 years. Take agriculture as an example:

- Australia has 4.1 million square kilometers of arable land to feed a population of 24 million;

- China only has 5.1 million square kilometers of arable land (1.25 times more than Australia) to feed a population that's 58 times greater than Australia; 

- Consequently, I would argue that technology is the key to balancing the food equation. China is spending billions on water systems, seeds, robots and data science to develop sustainable, high-yield farms. Small nations like Israel and New Zealand have been quick to help China with both training and innovation.Australia has been slow to react. 

It's only been 40 years since the 'reform and opening up' process began in China in December, 1978. It's a pace that many in Australia don't fully understand. There is an underlying sense of pragmatism in China to get things done, which translates into a somewhat rapid pace of doing business in the country. 

It's estimated the cumulative number of business decisions the average Chinese CEO/government leader has to make in the space of 1 year is equal to the number of decisions a CEO in Australia would take 7 years to achieve. 

Competition is intense, customer service must be immediate. Likewise any mistakes must be resolved quickly. If not, your competitor will eat you for breakfast. The Chinese are masters at being lean, reacting quickly, driving up value and finding ways to help evolve existing business models.　Some solutions may not be perfect.However, they do tend to work for the vast majority, which allows things to get things done.

We in Australia are just too slow. Our laid-back attitude and bureaucracy tend to frustrate the Chinese, particularly as we're considered an advanced economy. Unfortunately, Australia is rapidly falling behind, encumbered by legacy systems, endless feasibility studies and no real plan for the country that can outlive the tenure of any given government.Like the Chinese "we should do more and engage less in empty talk."In February 2016, Australia's CSIRO (the most respected scientific organization in Australia), declared that 40% of Australian jobs would be lost to technology by 2025.　Yet Australian lawmakers have "kicked the can down the road" in addressing this major issue.This is in stark contrast to the Chinese Central Government, which has wholeheartedly encouraged the people to embrace the challenge of accelerating the adoption of technology in all areas, ranging from education, to government, private enterprise and beyond.

Yes, China has its problems. But so does Australia. But what concerns me most as an Australian that's been living and working in China for more than 15 years is the portrayal of so many misconceptions about China that are so far from the reality on the ground.When most Australians visit China for the first time, their immediate reaction is: "What we've been led to believe back home is so wrong, this is nothing like what I expected."　They most often walk away with a new-found respect for what China has achieved, as well as recognize that while it's a "work-in-progress."　Living here, you come to understand there are very clear and demonstrable signs of action being taken to build a stable and sustainable economy for a population of 1.4 billion people.

If Australia can take the time to sincerely understand China's plan, and the initiatives being undertaken for its people, the opportunities for Australia are enormous.　

(Philip Beck is Chairman of Dubeta Pty Ltd)