Exports' great leap forward

THE AUSTRALIAN | CAMERON COOPER | 25.06.10

WITH about 30 contracts in the pipeline and a stunning marketing showcase at Expo 2010 in Shanghai, you do not need to convince the Tobin twins, Matthew and Daniel, of the power and pace of the Chinese market.

Their Brisbane design consultancy, Urban Art Projects, beat 100 other tenders to supply public art to the world fair, creating a raft of new business opportunities and leading to the expansion of its Shanghai office from one staff member to 12 in the past year.

"It has allowed us to gain a foothold in China," principal Matthew Tobin says.

"To win such a project gives you excellent credibility with Chinese clients. They think if you're working for Expo you're good enough to do work for them."

Since its launch in the early 1990s when the Tobins graduated from visual arts courses at the Queensland University of Technology, UAP has built a reputation for creating striking architectural and landscape artworks and has a business presence in the US, the Middle East and China. Tobin admits doing business in China and understanding the cultural idiosyncrasies of clients has been a "steep learning curve".

"There are many layers of bureaucracy and many layers of decision-making, so the notion of design by committee is pretty hard to overcome over here," he says.

"I think it's learning to deal with those layers of bureaucracy that has been the biggest challenge."

Conversely, Tobin says budgets are often more generous than in Western markets.

"The freedom over here is that they're not afraid to commission large-scale elements and they're not afraid to throw quite large-scale budgets at artworks."

UAP is one of a growing number of small and medium-sized enterprises proving Australia has more to offer China than just coal and liquefied natural gas. Austrade notes new data showing 23 per cent of all exporting Australian SMEs sell to China, putting it in a league similar to traditional market strongholds such as New Zealand, the US and Britain.

"I think Australian companies have certainly taken a fair dinkum view of having a presence in China and I think that helps Australia as a brand, too," says Tim Harcourt, chief economist at Austrade.

He says Australian goods and technology enjoy a strong reputation for quality in China, and our trade opportunities extend well beyond "rocks and crops". Harcourt adds that high-profile projects such as the Water Cube -- the aquatic centre designed for the 2008 Beijing Olympics by Australian John Bilmon and his team at PTW Architects -- have helped "put us on the map".

It is a sentiment confirmed by Robert Dane, the chief executive of Solar Sailor, an Australian company that is commercialising hybrid marine power and solar sail technology in Hong Kong and the mainland. In Shanghai, the company has just launched the SunTech Guosheng, the largest vessel to date to employ its hybrid solar technology. Hong Kong also has commissioned four solar ferries using Solar Sailor technology.

Dane says the Chinese appreciate Australians are good innovators "and that we solve problems by pushing boundaries".

Although there is a perception that China is not conscious of environmental issues, he says green entrepreneurs ignore the market at their peril.

"In actual fact they are doing their own industrial revolution in their own Chinese way and they are definitely doing it in a greener way than we did our industrial revolution," Dane says.

Solar Sailor is confident substantial fuel savings and emissions advantages will convince many marine operators in China to adopt its technology on tourism and transport vessels.

"They've got to have green boats, so already the interest we've had has been quite extraordinary," says Dane, who credits company chairman and former prime minister Bob Hawke with helping to open trade doors to China.

Harcourt says it has become clear there are opportunities for SME exporters outside the mega-cities of Beijing, Shanghai and Guangzhou.

"Increasingly I'm going to the second and third-tier cities, and all my Chinese colleagues at Austrade say: 'They're just country towns,' he says. "But there are five million people in some of them; they're pretty sizeable country towns."

Harcourt says Australian exporters have strong market prospects in these regional cities where domestic urbanisation is creating enormous demand for infrastructure and services.

"If you go to Shanghai, the French, the Germans, the Americans and the Japanese are all there, but it's in the third-tier cities where the Aussies might be well ahead of the curve," Harcourt says.

South Australia-based company Neuplex proves the point through its provision of energy solutions to remote communities in China.

Director Thomas Man says the company is rolling out niche solar energy generating systems in cities such as Yulin, in one of China's poorest regions in Shaanxi province.

Man has adopted the business strategy of negotiating directly with government officials rather than taking on Chinese business partners.

"I'm different from other exporters to China," he says. "I build my relationship with the government first and foremost. I go to local authorities and mayors and the local science department. I go as far as the ministry in Beijing; yes, it's straight to the top."

According to Man, cutting through China's notorious red tape is crucial, especially for smaller exporters without a high profile. "I'm only a small enterprise in South Australia and you may think: 'Why would a big shot over there in Beijing talk to me?'

"Well, I think primarily it's because we build relationships. You have to have certain entrepreneurial qualities. You have to make them understand that you're honest, but that you've got what it takes."

Courtesy of Expo 2010, UAP has certainly shown it has the goods. Like their artwork, the Tobins are thinking big and China is a key component of their ambitious strategy.

"We've got about 30 other contracts on at the moment at various stages of design and construction in China, and we are starting to manufacture some of our work for the Middle East and for America in China," says Matthew Tobin. "So the goal for our business is to aggressively grow the local Chinese marketplace because it's such an exciting place to work but also to create a manufacturing base here that allows us to be more competitive in the Middle East and the US."

TIPS FOR EXPORTERS

Know the selling points of your product or service and ensure there is a genuine market for it in China.

Forge strong relationships with Chinese decision-makers to cut through the red tape.

Target second and third-tier cities that are undergoing infrastructure and social expansion, not just the obvious choices such as Beijing and Shanghai.

Talk to other business owners in Australia who have been successful in China and learn their secrets.

Get professional advice to ensure your business and tax structure will meet Chinese regulations.

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