Lucrative opportunity in the Chinese market has not been lost on Australian firms, mid-tiers in particular, but “less than desirable” consequences can stem from a poor understanding of the nation’s bureaucracy and cultural differences.
‘Flipside’ of China opportunity a caution for Aussie accountants
Bentley chief executive Mark Chapman, said providing tax advice and dealing with a different bureaucracy was an opportunity for professional services to help Australian businesses navigate the Chinese market.
Bentleys, who have expanded their China presence, are amongst several mid-tier firms working on their relations with the Asian powerhouse. BDO and HLB Mann Judd have also been actively exploring the Chinese market.
“A number of Australian businesses – of all shapes and sizes – rightly gauge the lucrative opportunity the Chinese market presents; with its rapidly growing middle class who covet Australian-produced goods, and Chinese businesses who view Australia as a preferred trading partner,” Mr Chapman said.
“Unfortunately, on the flipside of the opportunities there are some very real challenges for businesses who are not accustomed to China’s demographics, culture and complex bureaucracy; which can lead to less than desirable outcomes.
“In addition to cultural differences, businesses are faced with the challenge of effectively managing the tax rate which requires proper tax advice; the reality of IP issues with stolen trademarks being the number one problem in China; as well as having to develop trusted contacts which can be difficult with no existing partnerships.”
According to Mr Chapman, there is a strong demand in China for services such as aged care and educational services, as well as renewable and clean technology.
“China’s ageing population is rapidly rising and there is an increased demand for education and training around the operation of aged care homes, an area that China views Australia as excelling in,” Mr Chapman said.
Hong Kong Corporate Services Group chief executive Ken Deayton, believes Australian businesses should look to Hong Kong as the gateway to mainland China and take advantage of the ‘one country, two systems’ ethos.
“Hong Kong is a special administrative region of China, located in one of its richest and developed provinces and serves as a two-way interface between the mainland and the global marketplace,” said Mr Deayton.
“As one of the world’s freest economies, Hong Kong has no barriers to trade, no restrictions on inbound or outbound investments, no foreign exchange controls and no nationality restrictions on ownership of property.
“To thrive in China, it is important for Australian businesses to think outside the box and to consider which businesses or services can support the growth of China.”