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4 July 2007

Entrepreneurs advised to 'be prepared' for China

Never make assumptions and be prepared to adapt are the golden rules for expanding into the Chinese market, according to a seminar attended by some of Sydney's top entrepreneurs and hosted by Austrade, Ernst & Young and Westpac.

The Sydney 'Grow by Going Global in China' seminar, the first of four events to be held across Australia in July, recommended entrepreneurs keep a close eye on education, design, food, wine, fashion and film as upcoming niche export opportunities. Major events like the 2008 Beijing Olympics are also set to offer our entrepreneurs business prospects.

According to Ian Blair, Westpac's General Manager Commercial Banking, the seminars are providing Australia's entrepreneurs with the latest economic and business insights to help them decide whether exporting to China should be their next major move.

"For many of Australia's entrepreneurs, there is no greater potential for growth than that offered by a move into China," Mr Blair said.

"China is Australia's second-largest trading partner with little sign of a slowdown in demand or future opportunities for Australian exporters. Westpac's recently approved new Shanghai branch, which should be operational by the end of the year, will put even more Westpac resources on the ground in China's financial heartland," he said.

According to Christopher Wright, Austrade's Senior Trade Commissioner for Shanghai who spoke at the seminar, China has a market for just about any Australian product or service but to succeed businesses need to do their homework.

"If it seems too good to be true, it almost certainly is," Mr Wright said.

"We know that business in China relies heavily on relationships, so Australian companies need to spend time in the market to understand who they are dealing with. But it also needs good old fashioned common sense and sound commercial practice.

"With 15 offices in China alone, Austrade can help open doors and introduce companies to potential buyers, business partners and other advisers like the banks and accounting firms.

"China is growing at over 10 percent annually. This is a market no company can afford to ignore. Companies are growing their top line through access to China's market. Investors are reaping improved return on investment on the back of that driving growth," Mr Wright said.

Entrepreneur Philip Rossi, Managing Director of Tapex, considers himself lucky as China came tapping on his door in the late 1990s looking for a reputable company that could resurface school playgrounds across China.

After a downturn in business as copycat companies moved into the Chinese market, the past three years have seen Tapex make in-roads back into the market through high quality products and a strong reputation.

Speaking at the seminar, Mr Rossi stressed the importance of understanding what differentiates your product from your competitors and understanding your market in China.

"Be persistent. You need to understand who you are selling to and why," he said.

Colin Jones, a tax partner at Ernst & Young, said that as China continued to lead growth in the region, Australian companies need to be across all the regulatory and cultural challenges involved in taking advantage of that market.

"Expanding into China, for most Australian SME's, will be one of the largest opportunities they have in significantly growing their business. They need to be adequately prepared in the key areas of tax, foreign ownership laws and cultural barriers to entry," Mr Jones said.

The 'Grow by Going Global in China' seminars are being held as Westpac and Austrade gear up for another year as major sponsors of the Entrepreneur Of The Year awards, founded and produced by Ernst & Young, and look for new ways to contribute to developing a more entrepreneurial Australian business community.