Australia’s investment call from China

Tonight well-known Australian entrepreneur, David Thomas, on behalf the Australia China SME Association, hosted a special event with Bo Ji, Assistant Dean, Cheung Hong Graduate School of Business delivering a wonderfully researched paper entitled “Win in China: How to tap into the Chinese market for Growth”. The venue was Sydney’s Haymarket HQ - an incubator focused on helping entrepreneurs build the bridges between Australia and Asia with a particular focus on China.

Bo Ji told his audience whilst Chinese may be a little different they are a people to. He reminded us we need to do business with people you at least know. It is critical for new Australian companies wanting to forge relationships with businesses in China to go and sit, have normal business relations with their counterparts. He told us that Chinese think more in community than Westerners and that meals are more than just eating. For most of the room it was clear that they had worked internationally and accept this what was critically important was that you need to maintain these relationships. 

An interesting remark from Bo Jo was that whilst Australia and China have never been great friends, they have never been enemies. He looked at Chinese history only over the last 300 years focusing in particular on the negative relationship with Trump’s America, Japan and that with the European powers which tried to force China to open up during the years of the so-called Opium Wars. He did remark that whilst we consider our sales of cotton and coal to be important to Australia that China has many sources of supply. It was clear that China is looking for friends and then Australia and investments into Australia are seen positively. He noted, that in Chinese culture, you may pay more but want to buy from friends.

Australian management consultant Mark Hodgson in his book “Time to Shine”, says much the same thing. Hodgson argues that in the new influence economy we need to be more collaborative. In working with clients and investors we need practice bringing people together so that the combined body can attain the common goal (see p. 154). Hodgson speaks of the new innovation economy as requiring us to be honest and authentic. This is especially the case in pitching for early stage investment.

Bo Ji demonstrated that China continues to see decades of rapid growth ahead especially as it middle class seek investment opportunities. Bo Ji told the audience that modern Chinese realise that they do need to look outside their own country for investment opportunities not just limited to resources but also looking for information technologies and other developments. The way to get these new generation of Chinese investors involved in your business is to go to China, meet with them and work through your project with them. What was clear to me was the traditional approach in Australia, Canada, USA and Europe of preparing financial model, an information memorandum, a pitch deck (slide pack) and one page executive summary does not meet the partnering concepts which Chinese investors wished is have. He reinforced the view that you will not get any yes/no outcome from your first meeting, and that this may be very good, rather you need to do your pitch, wait a while, come back and talk, and if you’re lucky be invited for a meal. He highlighted that it is most likely as this meal comes to a close you will know whether you have been successful and not.

Given that China has a large pool of investors seeking alternative investments we need accept the challenge he concluded: take up your courage! Reward success! Celebrate failure! Punish inactivity.

As in other parts of the world, China demands we make friends and returned to visit them. As at home when we have new investment opportunities it is easier to take them to friends and to strangers, we need build the same network of friends in China. It really just makes common sense and we only punish ourselves if we are not active in a huge untapped market which welcomes opportunities to invest in and with Australians.

Today the door to get investment from China is open - we need to go to China with good investment opportunities and to make friends.

Paul Raftery