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China update – potential investors / buyers for Australian business

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China update – potential investors / buyers for Australian business

By , April 30, 2012

As some of you may be aware I have just returned from a short trip to China ( Beijing ) and whilst it was quite a casual introduction – a few very interesting things emerged:

• China is a powerhouse economically – it is growing rapidly ( 10 % plus on average year on year growth ) – Moody’s said it expects China’s real economic growth rate to ease to a range of between 7.5 – 8 .5% in 2012 and 2013 from the more heady 10.3% pace of the last decade.
• The entire city of Beijing features cranes, construction sites, new roads and very new infrastructure.
• The Beijing subway for example ( constantly being extended to meet the growth of the city ) moves 4m people per day – it is a highly efficient machine, similar in style to the London Underground with frequent trains on a series of interconnected loops – zero graffiti, and great passenger information ( the announcements were in clearer English than we get here in Sydney ) .
• Chinese are highly favourable of anything Australian – very friendly to tourists and love Australia as a business opportunity- for a few reasons:
o Time zone is compatible – only a two hour difference between Sydney and Beijing
o English is becoming much more common in China ( with most young children learning English at Kindergarten age )
o Australian is seen as a very stable political environment
o The Australian Economy compares very favourably with most other world economies.
• There is substantial interest in investing in Australian assets – mainly businesses and property / property based assets – either for migration into Australia or purely as an investment strategy.
• To attract capital businesses need to be well prepared, professional in the approach ( one Chinese accountant told me a story about an Australian business ( value approx. $20M ) who turned up looking for capital with a business card and a piece of paper which was used to draw pictures of their business model ) and flexible in terms of time frame and structure.

We are working very closely with long-time associate and friend David Thomas (who has been telling me about the power of the BRIC economies for at least 7 years ) to see how this might impact / benefit our clients.

Craig West

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.