What China’s Rebalancing Means for the future of Australia’s finance sector

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The Australia China Business Council (ACBC) and ShineWing Australia recently released the industry leading 2016 Australia China Trade Report – The Long Boom: What China’s Rebalancing Means for Australia’s Future.

The report, produced in conjunction with Monash Business School and the Australian Centre for Financial Services, serves to highlight some of the opportunities that may flow to Australia as a result of “China’s Rebalancing” from an infrastructure investment-led, to a consumer demand-driven economy.

Australia’s Finance and Insurance sector

China presents an enormous opportunity to expand it’s current output, share of the economy and jobs. As a major employer of Australian workers and the largest single contributor to corporate tax receipts, expanding this sector through greater trade and investment with China will have a major flow-on impact for the wider economy.

Some of the  key messages for the finance sector include:

  • Financial services is Australia’s single largest industry contributing more gross value to the Australian economy than the mining sector
  • China could represent up to 19% of Australia’s financial services export market by 2026
  • China’s share of the financial services export pie is projected to grow from 11% to 16% in 2026, which will result  in the growth of more than 110,000 jobs.

“Like healthcare and education, financial services will be a key driver of Australian economic growth over the next decade”.

Continued Opportunities for Growth

Modelling by the Australian Centre for Financial Studies rebuts the view that China’s softening growth will have a predominantly negative impact on Australian trade. In particular:

  • China’s demand for Australian exports will grow as it modernises its economy and the middle class grows by an estimated 109 million adults
  • China will claim just over 31% of Australia’s exports by 2025, up from 28% at present
  • Close to one million new jobs could be created across the five key industries of financial and insurance services, healthcare and social assistance, education, tourism and construction by 2026.
Conclusion

The future of the Australia-China trade relationship is one of both opportunity and challenge. Key opportunities lie in industries other than mining that align with China’s likely growth profile. The rising Chinese middle class presents an opportunity to broaden and deepen the Australia-China bilateral economic relationship in the generations to come with services already accounting for around 75% of Australia’s economic output and some 85% of employment.

Even with a relatively conservative forecast for Chinese economic growth, China appears set to remain Australia’s dominant trading partner. However, the ability to capitalise on Chinese demand will be contingent on policy decisions, such as visa and investment policy, foreign investment screening thresholds, export finance and insurance.

Tim Hogan-Doran, ShineWing Australia
Tim Hogan-Doran, ShineWing Australia

For more information on the report and it’s implications for Australian businesses, contact community member Tim Hogan-Doran from ShineWing Australia or download the full report here.

INVITATION: learnings and outcomes from ABF mission to CIFIT, Xiamen China – Monday 19th Sept

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The Australian Business Forum (ABF) has been running Aus-China business events for 10 years and recently hosted a fourth overseas mission to the China International Fair for Investment and Trade (CIFIT) expo.

expo-standExpat Advisors Community was an exhibitor within the ABF Australian Pavilion at this years CIFIT looking to assist those planning to move to Australia via our SIV Consulting Service or invest in Australia through a range of strategic business partners.

Community members Dearin & Associates had a number of agricultural and mining projects to promote, Sumo Group showcased their fund management and property investing capabilities and specialist legal advisors Alex Kaufman and Robin Yang discussed  migration and business structuring with those that visited the ABF Australian Pavilion.

LJM Productions showcased their range of cross-cultural films for which they were seeking funding, while other delegates were from a range of industries including health and nutrition, cosmetics and education.

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We also participated in a business matching session with local companies via the Fujian Chamber of Commerce.

At this month’s Expat Advisors Community discussion group, hear from some of the NSW delegates about their experiences from preparing for the mission to participating in a range of business forums and networking events, potential opportunities and how they will use the learnings to position their businesses for Aus-China opportunities.

Event Details

Date:     Monday 19th September, 2016
Time:      5 pm for 5.15 pm start, followed by networking drinks until 7.30 pm
Venue:   SME Village, Level 3, 50 York St, Sydney
Format: Open discussion from a range of delegates and exhibitors from the mission. Please also come prepared to introduce yourself and bring plenty of business cards.

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About Australian Business Forum

Australian Business Forum (ABF) facilitates Australian business looking to engage with China. Initiatives focus on the Small and Medium Enterprise sector and connecting with Chinese business community through a network of partners across business, government, industry and academia.  

 

ABF forum with Fujian Government reported in local Chinese media

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Ray Evans, CEO of Australian Business Form (ABF), at a private forum with the Fujian Chamber of Commerce during the China International Fair for Investment and Trade (CIFIT) held September 8th to 11th expo, highlighted the close working relationship between Australia and China which is a major trading and business partner across many sectors.

Stacey Martin with Cher Jones and Eric Xie from NSW Trade & Investment, Guangzhou and Shenzhen.
Stacey Martin with Cher Jones and Eric Xie from NSW Trade & Investment, Guangzhou and Shenzhen.

Acknowledging the support from the Australian government, also in the attendance were Anna Lin, Austrade Commissioner based in Guangzhou and Eric Xi in Shenzhen, contact for the Fujian province, and Cher Jones, NSW Trade and Investment, also based in Guangzhou.

Australia has over $100B in two-way trade with China, with the Fujian province being the 10th largest trading partner.  According to Ms Lin, Australia has one of the leading services sectors in the world, currently 14% with China and is expected to increase across legal, construction, telecommunications, health and aged care.

Lesley Hammond & Jenny Walsh from LJM Productions with Anna Lim, Austrade Commissioner, Guangzhou
Lesley Hammond & Jenny Walsh from LJM Productions with Anna Lim, Austrade Commissioner, Guangzhou

At last week’s G20 meeting in Hangzhou, Australian Prime Minister Malcolm Turnbull and Austrade signed an agreement with Alibaba’s Jack Ma, will provide the opportunity for even more Australian products to access the T-Mall platform.

The China Free Trade Agreement (ChAFTA) has also enhanced engagement with the Small and Medium Enterprise (SME) sector.

The Australian ABF delegation consists of a range of services, products and projects that are well placed to engage with local businesses and are looking forward to one-on-one conversations during the business matching.

Business Matching conversations between Australian delegates and Chinese businesses
Business Matching conversations between Australian delegates and Chinese businesses

Mr Evans extended an invitation to those business delegations planning to come to Australia to connect with Australian Business Forum. As Ms Chen Hangmen, Deputy Director of Fuzhou Bureau of Commerce said, this is just the start of building long a term co-operation.

 

Xiamen local media showed a brief report on the business matching session between Australian Business Forum and the Fujian Department of Commerce which can be viewed here. 

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How to Maximise Offshore Assignments

cover-how-to-maximise-offshore-assignmentsFinancial Strategies for Australian Expatriates

This white paper has been prepared in conjunction with specialist tax advisers for internationally mobile executives.

The objective is to provide a broad understanding of the impact of different jurisdictions on personal wealth including the family home, investment and retirement funds.

With increased savings ability and smart strategies, expats who have access to the right advice will be able to make the most financially of their offshore assignments.

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Disruption to offshore lending: BasisPoint conference – Thursday 22nd September

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Drying up of bank lending for overseas investors has seen the market respond with the development of innovative financing solutions. 

The BasisPoint inaugural conference on non-bank financing will establish an industry-wide network to discuss the financing problems faced by developers, property marketers and agents in managing settlement pipelines.

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Speakers include a representative from the Foreign Investment Review Board (FIRB), a guest lawyer from Beijing and a range of leading advisors on how investors can enhance their returns from private lending and what developers need to do to best position their projects for this new source of funding.

Deal Matching

In addition to the afternoon conference and networking drinks, the event will also feature a deal matching* process for introducing developers with projects to fund to non-bank groups with money to lend.

If you are interested in participating in the deal matching contact BasisPoint General Manager, CT Johnson on ctjohnson@basispoint.com.au

Event Details
Date:      Thursday 22nd September 2016
Time:      1.50 pm to 7.30 pm
Venue:   Grand Ballroom, Westin Hotel, Sydney

Cost:       $600 plus GST or $450 before 8th September

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About Basis Point

Basispoint-david chinBasis Point, founded by David Chin, provides business intelligence and networking opportunities for participants in the investment & financial markets in Australia & Asia, through a combination of bespoke intelligence reports, directories and targeted networking events

With China’s disruption’ as a major supplier of capital in global markets, and as a major trading partner with Australia, the three areas of focus are:

  • Significant Investor Visa (SIV) investments and China’s HNW private investments in Australia
  • The growing Australia-China property, agri and tourism development opportunities
  • Funds and private capital sources including hedge funds, SMSFs, boutique funds, VC funds, proprietary trading /derivatives and Family Offices, especially with an Australia-China and Australia-Asia connections.

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*Note participation in the matching process is free for qualified lenders, while borrowers will be charged a fee for any monies lent or invested into their projects.