Queensland Open for Business - China Market Brief

Queensland Open for Business – China Market Brief8 October 2015

ZIJIAN ZHANGTrade & Investment Commissioner for China

Contents

• China Market Spotlight

• Trends and Opportunities

• TIQ China Strategic Plan 2015-16

China Market Spotlight

• New Normal Model: Transition from investment driven to consumption driven;

• Devaluation of Chinese currency and turbulence of Chinese stock market;

• Serious challenges by growth slowing, environmental pollution, food safety, ongoing anti corruption and its chain reaction.

Trends & Opportunities

Trade:

- Agribusiness and food supply: strong demanding;

- Ecommerce: fast growing marekt and direct purchasing from overseas

Agribusiness and Food

• China has been the world’s biggest food retail market since 2012

• China is Australia’s largest agriculture and fisheries market, worth close to $10 billion in 2014.

• Import growing fast for grain, beef, pork and fruits from Qld since 2010

Catching up with Food opportunities

ChAFTATariffs on most of the agriculatural products exporting from Australia to China will be eliminated, which will give Australia a significant advantage over larger players in the Chinese agriculture market – the US, EU and Canada.

Product A$ million

Beef 722

Sheepmeat 385

Dairy 351

Horticulture 83

Seafood 38

Live animal 142

Wine 217

Australian Export to China 2013 TARIFF

EXPORT

Catching up with Food opportunities

7.5-30%4-7 Years

12-25%9 Years

12-23%8 Years

15%9 Years

10-30%8 Years

10-25%4 Years

14-20%4 Years

14%4 Years

10%4 Years

Top 10 imported foods@Tmallby country of origins

16%

12.40%8.90%

7.10%

6.50%

5.50%4.50%

4.30% 4.10% 3.40%

Country of Origins

Republic of Korea

Hong Kong&Macau

Vietnam

Malaysia

Italy

Germany

Thailand

France

Indonesia

New Zealand

Orders of imported foods@Tmail by cities

19%

24%

12% 23%

8%

8%

6%

1st Tier Cities

New 1st Tier Cities

2nd Tier Cities

3rd Tier Cities

4th Tier Cities

5th Tier Cities

Others

Trends & Opportunities

Investment:

- One Belt and One Road Initiative;

- Ongoing overseas investment focusing on agri and property development

China’s Outbound Direct Investment

China’s Outbound Direct Investment

One Belt One Road

Rise of Privately Owned Enterprised – China’s New ForceWith the growing strength of Chinese POEs and the government’s support for “going out”, a smaller proportion of China’s increasing outward FDI is coming from SOEs. By the end of 2013, China’s outward FDI of non-SOEs accounted for 44.8% of China’s total accumulated outward FDI value, and their outflow comprised 56.1% of the total outflow of 2013.

M&A Rush in Real Estate and Construction

M&A Rush in Agribusiness and Food

M&A Rush in Energy and Mining

Main Risks Faced by the Chinese Companies

• Political Risk in host countries;• Intitutional Risk such as legal and taxation;• Lack of strategic planning;• Weak of local cultural understanding and

integration;• Lack of international professionals

TIQ China Strategic Plan 2015 -16

• Qld Premier’s visit to China in Sept, 2015

• Chinese buyers mission to Qld in Sept, 2015

• Qld food mission to FHC, Shanghai , Nov 2015

• Initiating investment missions to Qld focusing on agribusiness and tourism facilities development in 2015 /16

• Queensland Government ministerial missions to China 2015/16

• Chinese business migration / investment mission to Queensland, in 2015 /16

• Regular investment / business migration promotion workshops in various cities 2015-16

TIQ China Office look forward to working with you

Q&A section