Business needs to lift game to do business in China

KEVIN Rudd has delivered a broadside at the business community.

Kevin Rudd at the Australian embassy in Beijing yesterday, where he urged Australian business to harness China's growing economy. Picture: Sabrie Gilles

KEVIN Rudd has delivered a broadside at the business community.

The Foreign Minister says business needs to lift its game by a "quantum" to tap into opportunities emerging from the restructuring of the Chinese economy.

Mr Rudd is determined to push the China story in Australia's boardrooms and smaller businesses.

Mr Rudd described recent moves by Chinese leaders to drive phenomenal growth in the country's services sector as "profound", and its implications "fundamental" to the Australian economy.

Mr Rudd's comments come amid a flurry of re-engagement by Australian cabinet ministers with senior Chinese leaders, including Wayne Swan's meeting yesterday with senior Vice-Premier Li Keqiang who is widely expected to succeed Premier Wen Jiabao in 2013.

Mr Swan and Trade Minister Craig Emerson also separately met Zhan Ping, the head of China's most important economic ministry, the National Development and Reform Commission.

Mr Rudd also met the People's Liberation Army General Chief of Staff Chen Bingde yesterday. Mr Rudd said he believed "the full dimensions of what is occurring in China have not fully punched through in Australia".

China is changing from the export-based growth model, which it has used since 1978, to a new growth model based on domestic consumption and domestic investment instead of the demands of Western consumers.

"That growth model reaches its limits when you start to experience radical and profound labour shortages, and that is what is beginning to emerge," Mr Rudd said.

"How do you make domestic investment and consumption improve? You have to make fundamental reform of health and pensions.The consequences for Australia are pretty fundamental (with) . . . access to this market in key areas: health services, education services and broader financial service.

"In financial services, all four of our banks here have good reputations because their global size and standing have emerged (unshaken from) the GFC. There is still huge potential growth in the education services industry, and you will see interesting new areas.

"I sense the wider opportunities in the health industry given what is about to happen in China in the provision of health services. The ageing population will need a whole range of things that are embedded in our system for decades."