Australia-China Chamber of Commerce and Industry of New South Wales



Presentation by Mr Sam Gerovich

Australian Consul-General, Shanghai


Asia 2003: Perspectives from Australia’s Ambassadors

A DFAT Business Breakfast Briefing, Sydney, 19 August 2003


My colleagues before me have given a number of national perspectives of business opportunities in Asia.  I can only speak about a city and its surrounding provinces, but at the end of my remarks I hope you’ll agree Shanghai is a place with unique opportunities for Australian business.

Shanghai has been variously described throughout history as:

“the Paris of the Orient”;

“China’s entrepreneurial and intellectual capital”;

“the home of China’s political radicals”;

“the cradle of communism”;

“the spearhead of China’s reform and opening”; and

“the real Pearl of the Orient” - to distinguish it from that sleepy fishing village to the south, with apologies to those of you who have a soft spot for Hong Kong, particularly my colleague, David O’Leary.

So you can see that Shanghai has always commanded attention - both domestically and internationally.

With good reason. Shanghai is China’s economic powerhouse.  It has China’s biggest urban population - 19 million people; and 300 million when you include the surrounding areas.  It also has China’s highest per capita income. It accounts far 6% of GDP, 10% of exports and 13% of financial revenue.  And all this continues unabated -despite some initial concerns, SARS has turned out to be a mere blimp on the screen, with only a mild slowdown in overall growth expected.

Since the 1842 signing of the Treaty of Nanking, the city has been at the forefront of China’s internationalisation.  The globalisation of Shanghai is today a national priority -- the ambition is to become an international economic, financial, trading and transportation centre.

The city has an enormous international business community -- 300 Fortune-500 companies are based there.  AmCham Shanghai is the fastest growing in Asia, second only in size to Japan. As such, there is an abundance of trained and talented personnel.

Shanghai offers a gateway to the Chinese market. Half of the 40,000 Chinese migrants to Australia over the past decade have been Shanghainese.  Half of Australia-China trade goes through the Shanghai part.  Cumulative Australian investment in the city is valued at over USD670 million.  China is both Australia’s top source and fastest growing education market —with 36,000 studying in Australia and 20,000 onshore.  And the Shanghai region is the second largest source of these students.

In both the past two decades, the Chinese economy has doubled.  The result is tremendous change -- and with it, tremendous opportunity.

There will soon be more middle class consumers in China, with middle class incomes and middle class spending habits, than the entire population of Japan.

The rise of a market economy in China offers great scope for Australian businesses. Currently, over 50% of our trade with China in value terms is based on commodities such as wool, iron ore, wheat, and aluminium.  The Sydney Olympics manifestly demonstrated the world-class technology, logistic skills and environmental expertise we have to offer and it is up to us to capitalise on that success.  Key opportunity sectors are biotechnology, ICT, financial services, food, education, manufactures, construction and building materials.

China’s entry into the WTO in December 2001 presents further opportunities.  It has opened up the market in three key respects.  Firstly, tariff liberalisation.  Secondly, improved transparency -- trade procedures, rates, laws and regulations which used to be state secrets are now publicly available.  And thirdly, economic reform -- China now has a 5-year blueprint for transition to a market economy.

Our consulate recently surveyed Australian businesses in Shanghai regarding China’s WTO accession.  While many reported some continuing challenges in the Chinese market -- such as foreign exchange remission, bureaucratic inefficiency, and dispute resolution difficulties -- all said there had been clear and often sizeable changes in China’s formal trade restrictions.  But they also reported that the local business environment had grown more competitive as a result.

Shanghai has a young, dynamic and responsive leadership, eager to build a trading and investment environment conducive to foreign business.  This was particularly evident during the recent SARS crisis.  From a very early stage, the government organised a series of conferences to both inform and reassure expatriates and locals.  Despite having only 8 cases, it instituted strict measures to contain the disease, resulting in one of the lowest SARS impacts in the whole of China.

Australia moreover enjoys excellent relations with the new Shanghai leadership -- many of whom know our country well.  I welcome you all to take advantage of what is an exciting and growing market.


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