Foreign Minister Kevin Rudd summed it up correctly in a recent speech presented in China – “Australia has more to offer China than just minerals and fuels. China is demanding more sophisticated services such as education, banking, financial and wealth management, architecture and design and tourism.”
Mr Rudd is spot on. China is on track to become the world’s largest economy and Australia is well placed to meet its changing needs. Resources such as iron ore, coal, wool and gas continue to underpin Australia’s exports to China but as China moves into its next growth phase, its economic engagement with the rest of the world will change. Australia should broaden its links with China beyond the resources sector and start identifying new opportunities for growth as China moves towards domestic consumption and services.
The continued growth of China will bring about new needs and challenges and Australia’s world class service sector is well positioned to provide that opportunity. Education has already demonstrated its success with over 120,000 Chinese students calling Australia home. But Australia can play a greater role in China’s new economic vision.
In 2009, in my capacity as a Councillor at Monash City Council, I hosted a Chinese government delegation from the district of Baoshan in Shanghai, who visited the City of Monash to learn about the way local government operates in Australia. It was not until we got into the discussion that I realised we have more to offer China than fuel, agriculture and minerals. Who would’ve thought that they were actually interested to learn about the role of local government in Australia out of all things?
In recent years, local government in Australia has not only continued to manage roads, rates and rubbish, but it has acquired new responsibilities including childcare, health promotion and environmental management. The areas of interest that came up in my discussions with the Baoshan delegation included aged care, waste management, town planning and the development of facilities such as sporting fields and community centres.
In the area of aged care, we discussed and debated the following questions: what are the current and future ageing demographics in China? What opportunities lie for Australia in assisting the establishment of an aged care industry in China? What kind of cultural barriers exist in relation to developing aged care services? It is not in China’s cultural practice for children to put their parents in an aged care facility (I would know because my parents would never allow it) but as people in China begin to age and their children are having to work more hours than before, there is a growing need for an aged care industry to take shape for China to provide better living standards for its seniors.
With over 167 million people over the age of 60, the senior population in China is greater than the entire population of both Germany and France. Of that number there are 18.99 million people over the age of 80 and the estimated number of retirement home beds to cater for this increasingly aged population only comes to 2.77 million. This discrepancy between retirement village capacity and potential market demand of the aged population means that many more retirement homes and villages will need to be built. This is an opportunity worth considering by Australia’s service sector.
Waste management was the second issue that came on the table. No country has ever experienced as large or as fast an increase in solid waste quantities as China is now currently facing. In 2004 China surpassed the United States as the world’s largest waste generator, and by 2030 China’s annual solid waste quantities will increase by another 150 per cent - growing from about 190 million tonnes in 2004 to over 480 million tonnes in 2030. The priorities highlighted by the delegation included landfill and recycling systems, in which they showed a deep level of interest in. This is yet another opportunity for Australian investors.
Creating sustainable, environmentally friendly, multi-use community infrastructures was the final talking point. The importance of creating inclusive communities through recreation and sport was deemed as the next challenge for local authorities in major cities in China. A strong preference for energy efficient and sustainable facilities to minimise the carbon footprint was the end goal. They took a strong interest in both the City of Monash’s Clayton Community Centre and plans for the then Batesford Hub, where the latter is installed with a photovoltaic solar panel system that allows any excess power to be fed back into the electricity grid, which makes the building substantially self-sufficient. Australia is a global leader in terms of developing community facilities and infrastructure and this opportunity should also be considered by Australian businesses in meeting China’s current and future needs.
My experiences at a local level with the delegation of Baoshan have opened my eyes. The China growth story will most likely continue over the next 30 years, and new challenges will open new opportunities. As Mr Rudd said, “the synergies are clear, just as we have been a reliable partner in China’s first great economic transformation over the last 30 years, so too are we positioned to be reliable partners in the next phase of China’s growth stages into the mid-century.”
We have so much more to offer China than just fuel and minerals.
Jieh-Yung Lo is serving as a Councillor at the City of Monash. All views presented in this article are his own.