Don't underestimate China

Australia has benefited from an extraordinary period of prosperity, driven by Chinese demand for resources and more recently by huge growth in Chinese students, tourists and investors.

The big lesson for Australia today is that while the resources boom may be over, the Asian century is not.

China's growing economy, large middle class and aging population provides enormous opportunities for Australia across a diverse range of sectors including agriculture, health, aged care, education, tourism and financial services.

In these areas, Australian companies have a meaningful role in assisting China in its economic transition.

The participation of over 1,000 delegates in the Australia Week in China trade mission starting on April 11 demonstrates the eagerness of Australian companies to engage with the country.

Despite the talk of slowing growth, the Chinese economy continues to grow strongly.

In 2015, China's $10 trillion economy grew at 6.9 percent. And while this is below longterm growth rates, because of the size of the Chinese economy today, each percentage point of growth is equivalent to approximately 2.5 percent of growth 10 years ago.

To put this into further perspective, the growth achieved by China in 2015 exceeded the total value of its economy in 1995.

The Australian companies participating in AWIC recognize that China remains the most important engine of the global economy.

China, according to the IMF, contributed 29 percent of total global growth last year in terms of purchasing power parity.

While continuing to grow strongly, China is undergoing a complex economic transformation.

There are three rapidly evolving areas that will reshape the Australia - China economic relationship: rising consumption, e - commerce and innovation.

Consumption and services currently account for more than half of China's GDP. And because consumption rises much faster each year than GDP, it is the biggest contributor to China's growth.

ANZ bank predicts that by 2030, 326 million more Chinese people will have joined the middle class. The increasing opportunities for greater trade with China are obvious.

When you combine this with the new China Australia Free Trade Agreement, it's good news for Australian businesses, particularly for those that provide the goods and services that a rapidly growing middle class wants to consume.

In food and agriculture, there is significant growth potential as Chinese appetite for our food shows no sign of diminishing.

Health services currently rank as one of the most profitable sectors in the global economy and Australia has something to offer throughout the healthcare value chain, from R&D, to training, aged care, hospital and care facility construction and administration, medical devices and e - medicine.

The agreement means our educational institutions will have more opportunities to set up in China, to build their brand and networks.

And then of course there is tourism and education and all of the upside for Australia through our lower dollar, growth in Chinese international student enrolments and the revised air services agreement, which means more flights, more tourists and more students.

China's e - commerce sales surpassed those of the US and by 2018 they are expected to surpass the US and Europe combined at $610 billion.

The author is president and chairman of the Australia China Business Council.

(China Daily 04/15/2016 page18)