The emerging areas that provide opportunities for Australia to benefit from China’s rise

THERE’S been a massive boom in Chinese tourists travelling to Australia, it’s just one of the ways we are benefiting from China’s rise.

The beautiful clear waters around the Phi Phi islands in Phuket are full of Chinese tourists. Photos: Alex Tilbury

THE next time you see a Chinese tourist, give them a smile.

That’s the advice from New South Wales Premier Mike Baird, one of the speakers at the Sydney China Business Forum on Monday, who highlighted how good Chinese tourists were for the Australian economy.

“The Chinese ... are the perfect business because they like to stay for a long time, they also like to spend a lot of money,” Mr Baird said of the tourists.

“So every time you see a Chinese visitor just smile and ... say ‘just keep coming and tell your friends because we love having you here’”.

About 1.1 million visitors came to Australia from China this year, which was up 23 per cent from the year before, Qantas International and Freight chief executive officer Gareth Evans said.

“In 10 years time, the forecast is going to be well over three million visitors, which is going to be about a quarter or a third of all visitors to Australia,” he told the forum.

“It could be more. Australia only takes one per cent of total Chinese visitors ... if you double that to two per cent, you’re talking about six million Chinese visitors.”

The potential was underlined even further when Precision Group board director Dr Danhan Huang quoted a study that suggested only five per cent of the Chinese population even had a passport.

“So it means 95 per cent they hasn’t start yet for tourism. So there is potential ... can’t say how big,” she said.

Other countries like Canada were already recognising this, Dr Huang said, and the country had recently dropped its national park entry fees for overseas tourists.

Tourism is one of the areas the NSW Government has recognised as a potential growth area because of the emerging middle class in China. This has given them increased spending power.

“Chinese companies are already identifying it, (they are) investing into hotels, into golf courses (in NSW),” Mr Baird said of the increased tourism spending.

Other growth areas are wealth management and education.

Mr Baird said NSW needed to be strategic and continue to work on these areas.

“We’ve got the third largest international (uni) enrolments in the world,” he said. “It’s worth about $7 billion in export revenue.”

Sydney University will be opening a centre in China later this year and Mr Baird said he hoped institutions would continue to create links.

There was also another emerging trend for healthcare services and Mr Baird said the ageing population in China also played a part in this growth.

“In the previous 12 months about 13 per cent of Chinese investment in NSW was actually in healthcare,” Mr Baird said.

The value of pharmaceutical exports was also 17 times bigger than it was in 2010.

MEDTECH, EDTECH AND FINTECH

Throw innovation into the mix, and Mr Baird said he thought there were three areas that could provide opportunities for Australian businesses: medtech, edtech and fintech.

Medtech was about finding ways to deliver accessible, affordable health care to an ageing population, he said.

“The expectation over the next five years, is demand for health services in China will increase from about 200 million to about 300 million in 2025,” Mr Baird said.

Tapping into this demand could involve building on the competitive advantage Australia already has because of companies such as hearing implant company Cochlear and Sonic, which operates Australia’s largest network of primary care medical centres.

In the education sector it could involve helping children in Australia and China prepare for the future shift in the world’s economy from west to east.

“By 2020 almost 30 per cent of the world economy will be in China predominantly,” he said.

“How are we preparing the next generations for that global competition.”

He said this could involve helping students to learn languages and connecting Chinese teachers with Australian schools.

When it comes to financial technology, or fintech, Mr Baird said Australia was already ahead in this sector but needed to stay on top of opportunities to attract start-ups.

“Sixteen per cent of the NSW economy is financial services so fintech is both an opportunity but it’s also a protection in some respects of the competitive advantage that we have,” he said.

When it comes to the new economy, Mr Baird said medtech, edtech and fintech were clearly part of the future.

“When you’ve got the digital economy growing at seven times the traditional economy over the next 10 years, it’s clear that innovation has got to be the centre of ... strategic thought,” he said.

He said they could form the next stage of building Australia’s relationship with China, which is the country’s most significant trade link.

“You don’t want to be too complicated in the approach, you want to stick to where there is mutual benefit.”

Originally published as The emerging areas that provide opportunities for Australia to benefit from China’s rise