Australia-China Business Perceptions Survey December 2013
Table of contents Executive summary .................................................................................................................................... 3 From AustCham Greater China .................................................................................................................. 4 Australian-owned companies in China........................................................................................................ 5 Survey findings........................................................................................................................................... 7 Profile of respondents .............................................................................................................................. 12 Survey methodology................................................................................................................................. 14 Appendix .................................................................................................................................................. 15
December 2013
Australian Trade Commission Australian Businesses in China 2
Executive summary Overview This survey gathers information on Australian companies operating in mainland China, Hong Kong and Macau. It focuses on mainland China operations and on Australian services companies. It is the second survey of its kind, following the 2012 China Business Perceptions survey. The survey aims to better understand the growth outlook of these companies, any barriers to their growth, as well as the regulatory and competitive landscape in which they operate. It also aims to highlight differences between different regions of mainland China. It captures the outlook for companies that identify themselves as primarily Australian and operate in China. The results are based on a sample of 86 members of AustCham Greater China chambers in Shanghai, Beijing, South China, West China and Hong Kong. The surveys were completed from October 22 to November 17, 2013. The results highlight the opportunities and challenges Australian foreign subsidiaries face in China and provide a sense of how Australian businesses are leveraging the strong trade relationship between Australia and China to grow their businesses.
Key findings
Respondents had a positive outlook for the mainland Chinese economy in the next 12 months, with more than eight out of 10 optimistic about the overall outlook. This is an improvement on the response from 2012, when seven out of 10 were optimistic.
Four in five respondents indicated the level of competition had increased over the last 12 months. In comparison, only three in four companies in the 2012 survey reported an increased level of competition. Of the 24 respondents with operations in Western China, 23 indicated increased competitiveness in the mainland China market.
Competitors of Australian companies were nearly evenly split between local Chinese companies and other foreign-owned companies, with 56 per cent and 53 per cent of respondents respectively indicating this as their main competition.
Respondents indicated they were more profitable in 2013 than in 2012.
Key obstacles to growth for respondents with operations in mainland China were the availability of skilled staff, lack of transparency in organisational practices and an unclear regulatory environment.
Most respondents expected their operations to grow in the next five years. Three in four indicated they were likely to expand and two-thirds of these said they would expand in the next two years.
Access to new customers was the most frequently indicated reason for expansion. Of all respondents who planned to expand, 56 per cent indicated this as a reason for expansion. For those expanding to Western China, 76 per cent stated this as the reason.
December 2013
Australian Trade Commission Australian Businesses in China 3
From AustCham Greater China
This AustCham/Austrade survey of Australian business sentiment in China has been a unique opportunity to focus in on the issues confronting Australian businesses in this extremely busy and noisy market. A feature of the Australian business community is its sense of cooperation and collaboration. So to have this snapshot, which is specifically enquiring of our Australian perceptions in China, presents a valuable insight into how we as a business community view the current market conditions and where we might be heading. This survey also provides an opportunity for a reality check. So much is written and spoken about the Chinese economy and its impact on Australia, yet often these are observations that are made a long way from the day to day realities of operating in China. Regrettably, often these observations are not helpful because they are based on a misreading of the China market. The AustCham business community in Greater China is ideally placed to observe how business for Australian companies is tracking in the current economic environment. The findings from this second AustCham/Austrade business sentiment survey are most interesting. They are particularly notable for the growth in the optimistic outlook expressed by the respondents. Last year we thought that it was remarkable that 69 per cent of the respondents had an optimistic outlook for the coming year. That sentiment has become even more pronounced in the 2013 survey with 83 per cent saying that they had an optimistic view of the coming year's business in China. That was significant also because 85 per cent said that they are expecting the level of competition to grow over the coming year. The competitors were expected to be an even mix of Chinese and international companies, yet the positive outlook was based on the prediction that they expect to see the market to continue to grow in China. In fact, of the 77 per cent of respondents who said that they expected their businesses to grow in size over the next five years, half of these said that the growth would be required to meet increasing demand in the China market. This positive business sentiment may not reflect the tone expressed among commentators in Australia as they look at China and the global economy. Yet this year's findings have reinforced the views delivered in the study last year. AustCham Greater China, comprising the AustChams of Beijing, Shanghai, South China and West China in the mainland and AustCham Hong Kong & Macau have a rare ability to tap into the real-time sentiment of doing business in China. Perhaps it says something of those Australians who are engaged on the ground here in China that they have such an overwhelming positive outlook for the next few years.
December 2013
Australian Trade Commission Australian Businesses in China 4
Australian-owned companies in China This section provides background on the survey, Australia’s trade relationship with China and Australian businesses operating in China. China is Australia’s largest trading partner, accounting for 20 per cent (A$125.2 billion) of bilateral trade and 26 per cent (A$78.9 billion) of exports in 2012. Australia’s trade with China has grown rapidly, with five-year growth of 17 per 1 cent year on year to 2012. The number of companies located in Australia exporting to China is also growing. The number of Australian companies with a physical presence in China is difficult to measure. However, both the number of Australian-owned subsidiaries located in China and the number of projects in China receiving foreign direct investment (FDI) from Australian companies seem small compared to the large and rapid growth in the value of trade. Australian companies operating in China Of Australia's top 2000 companies, 98 (5 per cent) owned a significant stake of at least one company in China as of August 2013 and 89 had at least one majority owned subsidiary in China. These 98 Australian parent companies had a combined total of 193 China-based subsidiaries and an equity share of greater than 10 per cent in a further 28 companies, for a total of 221 companies. This total does not include representative offices, the inclusion of which may show a higher presence of large Australian companies in China. Of the 221 Australian-owned companies in China, 55 per cent are primarily services companies, 42 per cent are 2 primarily manufactured goods companies and 3 per cent are primarily agriculture or mining companies. There are another 328 Hong Kong or Macau based subsidiaries and associated companies of Australia top-2000 companies. Altogether there are 549 China, Hong Kong and Macau based companies, owned by a total of 171 Australian companies (9 per cent of the top 2000). These top 2000 companies have reported annual revenues ranging from A$56 million to A$58 billion. Data is limited on the number of small and medium Australian companies with operations in mainland China, so it is difficult to assess the population of Australian companies which operate in China. In terms of recent investments, 51 companies from Australia invested, through foreign direct investment (FDI), in a total of 79 projects across Mainland China between January 2008 and September 2013. The total capital investment 3 was US$6.5 billion, with an average investment of US$82 million per project.
Companies exporting from Australia to China The number of Australian businesses exporting goods to China from Australia has grown over the last five years, as has the value of exported products overall. The value of goods exports has grown much faster than the number of companies. Much of the growth in value is driven by exports of minerals and fuels, which accounted for around 70 per cent of Australian goods exports to China in 2012. These exports originate primarily from a small number of large companies. At the other end of the spectrum, many of the Australian businesses exporting to China are small traders.
1
Department of Foreign Affairs and Trade, Composition of Trade 2012 IBIS World Company database as of 28 November 2013 3 FDImarkets.com (2013) Trend Report: Australia FDI to China 2
December 2013
Australian Trade Commission Australian Businesses in China 5
Figure 1. Number of businesses exporting goods to China from Australia ('000's)
4.3
4.5
4.8
5.0
5.3
Figure 2. Goods exports value (A$ billion)
5.5
76.8 64.9 46.5 39.3 22.8
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
27.0
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Based on ABS catalogue 5368.0.55.006 Characteristics of Australian Exporters 2011-12
The value of exports of services companies has also grown and was A$5.7 billion in 2012. This was concentrated in travel of A$5.1 billion dollars, with A$4.0 billion of this travel education-related. Transport and professional and technical services are the next largest categories of services exports, with A$240 million of transport services exported in 2012 and A$135 million of professional and technical services. Figure 3. Service exports value (A$ billion)
5.2
5.7
5.7
2011
2012
4.7 4.0 3.4
2007
2008
2009
2010
Based on ABS catalogue 5368.0.55.003 International Trade in Services by Country, by State and by Detailed Services Category, Calendar Year
December 2013
Australian Trade Commission Australian Businesses in China 6
Survey findings Figure 5. Change in level of competition in mainland China in the last 12 months (percentage of respondents)
Economic outlook Respondents had a positive outlook for the Chinese economy over the next 12 months, with 83 per cent either optimistic or slightly optimistic about the overall outlook. This is an improvement on the response from 2012, when only 69 per cent were optimistic.
Increased a great deal
15
21
Increased slightly Stayed about the same
24
Decreased slightly
Figure 4. Outlook for the Chinese economy (percentage of respondents)
1
9 9
3 27
69
Neutral
83 Slightly optimistic
31
38
2012
2013
Optimistic
What is your overall view on the outlook for the mainland Chinese economy in the next 12 months?
Base: All respondents with location in mainland China, n=82 (2012: n=96)
Services companies were slightly more optimistic than manufacturing companies, with 84 per cent and 75 per cent respectively indicating an optimistic outlook for the Chinese economy.
Decreased moderately
40
85%
Slightly pessimistic
45 38
Pessimistic
Increased moderately
Decreased a great deal
said competition had increased in mainland China
How has the level of competition within mainland China changed in the last 12 months?
Base: All respondents with location in mainland China, n=82
Potentially a result of a more mature market, only 57 per cent of surveyed companies operating in Hong Kong or Macau indicated an increase in the level of competition, but 43 per cent indicated it had remained the same. Figure 6. Change in level of competition in Hong Kong and Macau in the last 12 months (percentage of respondents) Increased a great deal
13
Increased moderately Increased slightly
Competition
43 27
Decreased slightly
A dampener for the Australian businesses on the positive outlook for the Chinese economy was a perceived increase in the level of competition from other companies. In terms of competition, 85 per cent of respondents indicated this had increased over the last 12 months. In comparison, only 72 per cent in the 2012 survey reported an increased level of competition.
Stayed about the same
17
Decreased moderately Decreased a great deal
57%
said competition had increased in Hong Kong/Macau
How has the level of competition within Hong Kong and Macau changed in the last 12 months?
Base: All respondents with location in Hong Kong or Macau, n=30
Of the 24 respondents with operations in Western China, 23 (96 per cent) indicated increased competition in the mainland China market. This may reflect increasing competitiveness in the West. In contrast, only four of the 12 surveyed member companies of the Beijing chamber reported an increase in competition.
December 2013
Australian Trade Commission Australian Businesses in China 7
Competition to Australian companies was nearly evenly split between local Chinese companies and other foreign-owned companies, with 56 per cent and 53 per cent of respondents indicating these as key competitors, respectively.
In line with their positive outlook for the Chinese economy, respondents also have an optimistic outlook for their own organisation. 80 per cent are either optimistic or slightly optimistic while one year ago optimism was significantly lower, at 63 per cent.
Figure 7. Location of key competitors (percentage of respondents)
Reasons for optimism
Mainland China (local)
56
Mainland China (foreignowned)
53
Australia
“Strong business pipeline; strong new client acquisition; increasing interest in China from our major Australian clients.” (Board Director of a financial service provider)
36
Hong Kong / Macau
29
“Great potential market development needs for our industry.”
High income Asia
28
(Marketing Manager of a consulting service provider)
Europe or North America
26
New Zealand Other Asia
“An upturn in new business and relatively stable and solid connections already established with business partners”
9 5
(Board Director of a construction company)
Where are your main competitors based?
Base: All respondents, n=86
Local companies in Hong Kong / Macau were the main competitors in these markets (57 per cent) followed by foreign-owned companies in Hong Kong / Macau (53 per cent) and local companies in mainland China (50 per cent). Outlook for Australian companies Figure 8. Organisational outlook (percentage of respondents)
2 10
7 13
24
Pessimistic Slightly pessimistic
43 32 63
Neutral
80 Slightly optimistic
31
37
2012
2013
Optimistic
Figure 9. Reasons for optimism (percentage of respondents) Growth potential
46
Enter new markets
14
Strong demand
12
Continued investment
12
Relationships with clients
12
Increasing wealth
11
Less restrictive policies
9
Market is stable
8
Competitive market
6
Stable economy
6
Have increased our staff
6
Low operating costs
6
You have indicated that the outlook for your organisation in mainland China optimistic / slightly optimistic. What are the reasons for your view?
Base: All respondents with optimistic outlook for their economy, n=65
What is your overall view on the outlook for your organisation in mainland China in the next 12 months?
Base: All respondents with location in mainland China, n=82 (2012: n=96)
December 2013
Australian Trade Commission Australian Businesses in China 8
Profitability More than half of the respondents indicated 2013 was more profitable than 2012. This has similarities with last year’s result, when around half reported 2012 as more profitable than 2011. Figure 10. Financial performance compared to last year (percentage of respondents)
Of the 24 companies operating in Western China, 23 indicated the quality of their product or service as their main competitive advantage. Compared with service companies, manufacturers indicated client relationships were a competitive advantage less frequently (43 per cent) and low prices more frequently (36 per cent). Challenges
1
15
1 13
33
33
Much less profitable Less profitable About the same
51
40
43
More profitable
11
10
2012
2013
Much more profitable
53
How would you rate your organisation’s financial performance in mainland China this year compared to last year?
Base: All respondents with location in mainland China, n=82 (2012: n=96)
Competitive advantages The top three competitive advantages indicated were quality of the product or service, client relationships and the range of their offering. Figure 11. Competitive advantages (percentage of respondents) Quality of product or service
70
Client relationships
62
Range of offering
46
Innovation
38
Company size / profile
27
Alliance with local partners
23
Expansion into new regions
21
Price competitiveness
20
Availability of supply Government relationships
17 9
What are the key competitive advantages for your organisation in mainland China?
Base: All respondents with location in mainland China, n=82
Key obstacles impacting respondents’ operations in mainland China were the availability of skilled staff, lack of transparency in organisational practices and an unclear regulatory environment. Figure 12. Obstacles to growth (extremely high / high impact, percentage of respondents) Availability of skilled labour
32
Lack of transparency in organisational practices
32
Unclear regulatory environment
32
Cost pressures other than wages
29
Exchange rate fluctuations
28
Difficulty obtaining required licences to do business
28
Ability to enforce contract terms
28 27
Wage pressures Difficulty obtaining work permits
24
Trade restrictions
24 23
Cultural differences Competitors with preferential tariffs
22
International trade restriction
21
Restrictions on repatriation of profit
21
Property ownership
18
Lack of protection of intellectual property rights
18 17
Access to / cost of finance Infrastructure issues Transportation of goods, supplies and inputs
72%
13 11
indicated at least one obstacle to growth
Please indicate the level of impact that the following obstacles have on your organisation’s operations in mainland China?
Base: All respondents with location in mainland China, n=82
December 2013
Australian Trade Commission Australian Businesses in China 9
However, for organisations operating in Western China, the two most significant obstacles were the unclear regularity environment (19 per cent) and cultural differences (17 per cent):
Figure 14. Timing for growth (percentage of respondents)
6 “It is a lot harder market to crack than anticipated. Local nuances are difficult to cater for. Unless you are a massive foreign company it is very difficult to make an impact”
30
Next 3 years
17
Next 4-5 years
(CEO of a mining company)
Cultural differences were the main obstacle cited by goods manufacturers: “Once you think you have figured it out - you realise that you only know very little about something” (Region Manager of a manufacturing company)
Of those who did not indicate any high impact barriers to growth, some saw opportunity: “These are not obstacles per se, just issues which affect our operations. Managing these factors well is a key competence which enables us to be competitive.” (CEO of a service provider)
Growth
In what timeframe is your organisation likely to expand or grow its physical presence?
Base: All respondents who are likely to expand in the next 5 years (excl. don’t know), n=59
The most frequently indicated locations for expansion were Beijing, Shanghai and Guangdong. 32 per cent of respondents planned to expand in Western China. Of these, half were not currently located in Western China but planned a new operation. Figure 15. Regions where expansion was planned (percentage of respondents)
Beijing
Expansion plans
Guangdong
In line with their positive outlook for their organisation in mainland China, 77 per cent indicated their organisation was likely to expand.
Hong Kong
26 15
Likely to expand Remain the same
42
77%
Likely to reduce Don't know
of companies were likely to expand
What are your expectations for growth of your organisation’s operations in mainland China, over the next five years?
Base: All respondents, n=86
Of those planning to expand, 30 per cent plan to do so within the next financial year and another 36 per cent in the next two years. The remaining 34 per cent will either expand in the next three to five years or are not sure yet.
December 2013
17
39
9
30
14
27
6
Chongqing
17
9
Sichuan
11
Zhejiang
8
14 12 New location
Very likely to expand
35
Don’t know/not sure
36
Shanghai
Figure 13. Growth expectations (percentage of respondents)
Within the next financial year Next 2 years
11
Jiangsu 3 Liaoning
5
9
Total expansion
6 6
In which region(s) is your organisation likely to expand existing operations or open new offices / plants?
Base: All respondents who are likely to expand in the next 5 years, n=66; Many respondents selected multiple regions, regions with less than 5 per cent of mentions are not shown.
Drivers of expansion The most frequently indicated drivers for planning to extend operations were access to customers (53 per cent) and expanding capacity to meet demand (47 per cent). Those planning to expand into Western China indicated access to customers as the primary reason for expansion (76 per cent).
Australian Trade Commission Australian Businesses in China 10
Figure 16. Reasons for expansion (percentage of respondents) Access to customers in these locations Expanding capacity to meet demand
53 47
Figure 18. Location for manufacturing (number of respondents)
20
Chinese partners
20
Reducing operating costs
Mainland China
Developing new technologies and products
12
20
Europe / North America
12
18
Other high income Asia
5
Access to suppliers
5
11
Other Country
8
New Zealand
12
Preferential tax rates
16
Other Asia
17
Favourable regulatory changes
Hong Kong / Macau
7 2
Where does your organisation conduct each of the following operations?
Base: All respondents manufacturing in at least one region, n=22
3
Which three of the following factors most influenced your organisation’s decision to expand or grow?
Base: All respondents likely to expand in the next 5 years, n=66
Manufacturers indicated reducing operating costs (40 per cent) and gaining access to suppliers (15 per cent) as reasons more frequently than services providers. The 15 companies not planning to extend their business in the next five years mainly attribute this to high operating costs (n=7) or pressures from strong competition (n=7). Location of operations R&D was conducted primarily in Australia and mainland China, followed by Europe / North America.
18
Australia
18
Europe / North America
14
Other Asia
8 7
New Zealand
Figure 19. Location for sourcing material (number of respondents) Mainland China
8
Australia
5
Europe / North America
5
Other Asia
4
Other high income Asia
2
Other Country
2
Hong Kong / Macau
1
New Zealand
1
Base: All respondents manufacturing in mainland China and sourcing material in at least one region, n=8
Mainland China
Other Country
Those manufacturing in mainland China were slightly more likely to source raw materials from China than from Australia.
Where does your organisation conduct each of the following operations?
Figure 17. Location for R&D operations (number of respondents)
Hong Kong / Macau
18
Australia
Reducing risk
Other high income Asia
operations
24
Access to skilled staff Access to customers in other markets outside China
More efficient transport / logistics
Product suppliers were likely to manufacture both in Australia and in China. A number of companies manufactured in a range of locations globally.
6 5 4
Service providers who operated in mainland China tended to have either a regional focus or a global focus. 56 per cent provided services within China, Australia and Hong Kong only. Another 13 per cent also provided services in these regions plus another main regional group, most frequently other high income Asian countries. The remaining 30 per cent had a presence in multiple regions and continents.
Where does your organisation conduct each of the following operations?
Base: All respondents conducting R&D in at least one region, n=23
December 2013
Australian Trade Commission Australian Businesses in China 11
Profile of respondents
Figure 21. Duration of presence (percentage of respondents)
Revenue Of the 86 respondents to the survey, 57 were based in mainland China. Around half had revenues in mainland China of over A$5 million, and half under A$5 million. Figure 20. Revenue in mainland China ($A, percentage of respondents)
Less than $1 million
$20 million to $100 million More than $100 million
25
2 - 5 years
18 21
6 - 10 years 23
$1 million to $5 million $5 million to $20 million
9 7
One year or less
25 14
14
11 - 15 years 16 - 20 years
11
21
Hong Kong / Macau
6 18 18
Over 20 years
18
Mainland China
21
32
How long has your organisation had a physical presence in mainland China / Hong Kong/Macau?
Base: All respondents with location in mainland China (excl. don’t know), n=80; All respondents with location in Hong Kong / Macau (excl. don’t know), n=28
Please indicate your organisation’s revenue in mainland China (in Australian dollars)?
Base: All members of the Shanghai, Beijing, West China or South China chambers (excl. don’t know / prefer not to say), n=57
The majority of employees (77 per cent) were local Chinese, and 18 per cent were Australian.
Employees and length of establishment
Figure 22. Employees by nationality (percentage of respondents)
The respondents located in Hong Kong / Macau employed fewer people than their mainland counterparts. However, they have been operating for a longer period and generated more revenue than those located in mainland China. The median company size in Hong Kong / Macau is 25 employees, while in mainland China it is 50 employees. Half (50 per cent) of the organisations in Hong Kong / Macau have had a presence for more than 16 years, while only 24 per cent of mainland Chinese locations have existed for a similar period of time.
Local Chinese
77
Australian Other
18 6
And what proportion of your organisation’s full-time employees in mainland China, Hong Kong and Macau are…?
Base: All respondents (excl. don’t know / prefer not to say), n=73
This difference can be partly explained by historical factors. Until the mid-2000’s there were significant advantages for companies based in Hong Kong, particularly regarding the regulatory environment. Since then for many industries this gap has been closing.
December 2013
Australian Trade Commission Australian Businesses in China 12
Location
Industry
Almost all respondents operated in mainland China (95 per cent), most commonly in Shanghai, Guangdong and Beijing. A third (35 per cent) operated in Hong Kong / Macau.
A majority of respondents (86 per cent) provided services and one-third (33 per cent) provided manufactured products. The overlap indicates that 19 per cent of respondents provide both products and services. No producers of agricultural or mining products responded.
Figure 23. Location and headquarters (percentage of respondents)
Shanghai Guangdong Beijing Hong Kong Chongqing Jiangsu Sichuan Fujian Tianjin Zhejiang Guangxi Jiangxi Shandong Macau Guizhou Hunan Yunnan Hainan Shaanxi Shanxi Hebei Hubei Jilin Anhui Gansu Heilongjiang Henan Inner Mongolia Liaoning Xinjiang Qinghai Australia Singapore Other
36 23 10 12 15 13 13 12 1 10 10 8 8 8 8 7 7 7 5 5 5 3 3 3 2 2 2 2 2 2 2 1 13 1 2
62 51 47
Compared to the China-based operations of the top 2000 Australian companies, the proportion of services companies in our survey is much higher. This may be correlated with the relatively smaller business size of the respondents. It also reflects AustCham’s membership.
35
1
In which provinces/cities does your offices/operations? Where is your organisation headquartered?
This is similar to the profile of respondents in 2012, where 89 per cent provided services and 42 per cent manufacturing products.
Figure 24. Products or services provided (percentage of respondents) Architect. / engineering / technical services
20 16
Education and training Financial and insurance services Elaborately transformed manufactures
Headquarters
12
Construction services
10
Manufacturing services
10
Advertising, comm. and PR services Business and administrative support Management and consulting services
Location
Product design / R&D
organisation
15
have
Base: All respondents, n=86
More than half of the organisations in the survey were wholly foreign-owned enterprises (57 per cent), 22 per cent were branch offices, 10 per cent were joint ventures and 5 per cent were holding companies.
Simply transformed manufactures Health care and social assistance services Information media and telecommunications Legal and accounting services Rental, hiring and real estate services
86% Services
9 9 9 6 5 5 5 Services 5
Products
5
33% Products
Which of these describes the products or services your organisation provides?
Base: All respondents, n=86, Products and services with less than 5per cent mentions are not shown
December 2013
Australian Trade Commission Australian Businesses in China 13
Survey methodology Sample This survey captures the outlook for companies that identify themselves as primarily Australian and operate in China. The results are based on a sample of 86 members of AustCham Greater China chambers in Shanghai, Beijing, South China, West China and Hong Kong. The surveys were completed from October 22 to November 17, 2013. We chose to allow companies with memberships at multiple chambers to provide more than one response, especially as a number of Australian companies have subsidiaries in different locations. We also wanted to capture any differences in sentiment based on geographic location. As a result, the number of companies in the sample may be slightly smaller than 86. As outlined in the previous section, there are around 100 top 2000 Australian companies who own subsidiaries in China, and 51 Australian companies with recent direct investment in China. There are also companies with a representative office rather than a subsidiary, and many small and medium Australian companies with a presence in China. Based on our sample, the survey is a useful general indication of the operating environment in China for Australian companies.
In all, 1,420 members of AustCham Greater China were invited to take part in the survey. This resulted in 155 completed surveys and generated an 11 per cent response rate. However, only responses from Australian companies have been considered for the analysis. Overall 55 per cent of the 155 surveyed companies have been identified as Australian which resulted in an overall sample size of n=86. The response rates and the proportion of Australian companies among the respondents vary strongly for each Chamber and are shown in the table below. Figure 25. Survey response rate
Contacts emailed
Chamber
Completed surveys (Response Rate)
Shanghai
364
Beijing
246
West China
10
South China
100
Hong Kong
700
TOTAL
1,420
Australian companies (Proportion)
46
26
(13%)
(57%)
20
12
(8%)
(60%)
6
6
(60%)
(100%)
49
27
(49%)
(55%)
34
15
(5%)
(44%)
155
86
(11 %)
(55 %)
Methodology Respondents completed an online survey programmed and hosted by Sweeney Research. The average survey length was 14 minutes. The surveys were completed from October 22 to November 17, 2013. Sweeney supplied the Beijing, Hong Kong and South China Chambers with an ID and unique link for each member who was then emailed an invitation to participate in the survey. The process ensured anonymity and confidentiality of responses. Due to technical difficulties in the email send process for AustCham Beijing, Sweeney Research assumed responsibility for the mail sends for AustCham Beijing members. Furthermore, Sweeney Research organised the email send out process on behalf of AustCham Shanghai and West China.
December 2013
The response was similar to last year. In 2012, 1,003 members of the Beijing, Hong Kong, Shanghai and South China Chambers were invited to participate in the survey. Overall, 15 per cent responded to the survey (n=153) of which 63 per cent were Australian companies. The total number of completed surveys by Australian companies in 2012, n=96, forms the base for comparisons to 2012 in this report. No weighting has been used in the analysis.
Australian Trade Commission Australian Businesses in China 14
Appendix Figures Figure 1. Number of businesses exporting goods to China from Australia ......................................................................... 6 Figure 2. Goods exports value ............................................................................................................................................. 6 Figure 3. Service exports value ........................................................................................................................................... 6 Figure 4. Outlook for the Chinese economy ........................................................................................................................ 7 Figure 5. Change in level of competition in mainland China in the last 12 months ............................................................. 7 Figure 6. Change in level of competition in Hong Kong and Macau in the last 12 months ................................................. 7 Figure 7. Location of key competitors .................................................................................................................................. 8 Figure 8. Organisational outlook .......................................................................................................................................... 8 Figure 9. Reasons for optimism ........................................................................................................................................... 8 Figure 10. Financial performance compared to last year .................................................................................................... 9 Figure 11. Competitive advantages ..................................................................................................................................... 9 Figure 12. Obstacles to growth ............................................................................................................................................ 9 Figure 13. Growth expectations ......................................................................................................................................... 10 Figure 14. Timing for growth .............................................................................................................................................. 10 Figure 15. Regions where expansion is planned ............................................................................................................... 10 Figure 16. Reasons for expansion ..................................................................................................................................... 11 Figure 17. Location for R&D operations ............................................................................................................................ 11 Figure 18. Location for manufacturing operations ............................................................................................................. 11 Figure 19. Location for sourcing material .......................................................................................................................... 11 Figure 20. Revenue in mainland China ............................................................................................................................. 12 Figure 21. Duration of presence ........................................................................................................................................ 12 Figure 22. Employees by nationality .................................................................................................................................. 12 Figure 23. Location and headquarters ............................................................................................................................... 13 Figure 24. Products or services provided .......................................................................................................................... 13 Figure 25. Survey response rate ....................................................................................................................................... 14
December 2013
Australian Trade Commission Australian Businesses in China 15
December 2013
Australian Trade Commission Australian Businesses in China 16
