Melbourne (Inquisitr Wire): Internationally renowned China economics commentator Arthur Kroeber and Austrade’s Regional Director for North East Asia Laurie Smith have outlined how a post-GFC China will offer a wide range of new opportunities for Australian trade and investment.
Despite the impact of the global financial crisis, Chinese growth is predicted to remain bullish at 8.5% in 2009, with Australia’s merchandise exports jumping in lockstep by 45% to reach over A$39 billion in 2008-09.
Chinese foreign direct investment in 2008 was A$12.5 billion, with the Foreign Investment Review Board approving an additional A$38 billion worth of investment from China since November 2007.
Head of the Beijing-based economic consultancy GaveKal Dragonomics, Mr Kroeber said that China’s strength in the face of the GFC was as much a story of intensifying diversification as it was resilient growth.
“The Global Financial Crisis has accelerated the impetus for change, with different regions within China responding in different ways, Mr Kroeber said.
“Sustained recovery now depends on the strength of property and infrastructure investment in the hinterland, and on the government’s ability to increase the efficiency of the financial system and break down local protectionism that impedes domestic trade.
“Rebalancing within China also means government policy is now aimed at strengthening the role of consumer spending, increasing energy efficiency and reducing pollution.
“Rapid economic growth has also increased the capacity for outward investment by Chinese firms, especially the 150 large state enterprises controlling the ‘commanding heights’ of the Chinese economy.
“China’s outward direct investments tripled to US$55 billion in 2008 and are expected to rise further in coming years with Chinese outward investment set to play a constructive ongoing role in fostering global economic growth,” he said.
Austrade’s Regional Director for North East Asia Laurie Smith said: “A recent Goldman Sachs report predicts that 70 per cent of China will be middle class by 2020. This fact, and widespread development throughout the Chinese economy means Australian businesses will be presented with a diverse range of new opportunities.”
“Staying informed of rapid change and taking advantage of shifts in the business environment will be the key to profiting from China’s growth,” Mr Smith said.
“Austrade is continually refining our services to help Australian companies capture trade and investment opportunities within a rapidly changing economic landscape.
“We have sharpened our focus on areas such as energy and minerals, green building and clean energy, agribusiness, niche technologies, financial services, logistics, business and professional services.
“For example, Austrade recently signed a Memorandum of Understanding with Changsha City to encourage Australian capability in the city’s redevelopment, with opportunities in green building and major infrastructure projects connecting provincial capitals to the coast
“The Changsha government will invest billions in the redevelopment, a pilot project under the Chinese Government’s strategy to build further sustainable cities across the country.
“It’s just one example of change already underway that savvy Australian companies can benefit from,” Mr Smith said.