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Event Recap: China's 13th Five Year Plan

30 May 2016

Opportunities for Victorian businesses surrounding innovation was the key message from Tim Dillon’s presentation on Monday 30 May. Held at Holding Redlich, the Victorian Trade Commissioner for Greater China presented on China’s 13th Five Year Plan for over 80 attendees. His speech comprised of an overview of the 13th Five Year Plan, the opportunities it presents for Victorian businesses and concluded with a number of success stories of businesses successfully entering the Chinese market.

On 15 March this year, the 12th National People’s Congress adopted the outline of the 13th Five Year Plan for the national economic and social development of the People’s Republic of China. Developed by the National Development and Reform Commission (NDRC), The Plan is built on ‘Four Comprehensives’, namely building a moderately prosperous society, deepening reform, advancing the rule of law and strengthening discipline in the Party.

The emphasis is on a ‘new normal’ with a target of 6.5 per cent GDP growth annually, as well as an aim to escape the middle income trap, increase annual income per capita to US$12,600, create 25 million new jobs annually and to reduce the population living in rural poverty by 70 million. In order to achieve this, the 13th Five Year Plan has been formulated on five key principles; innovation, coordination, green growth, opening up and inclusive development. But what does this all mean for Victoria and our priority sectors?

In itself, The Plan provides opportunities for foreign businesses to provide expertise to help China meet its targets, especially around innovation, healthcare and environmental sustainability. However, the Five Year Plan is just one of many opportunities for foreign companies. The internationalisation of the Chinese economy via the 13th Five Year Plan, the Asian Infrastructure Investment Bank, the One Belt One Road Initiative, China’s free trade zones and the ChAFTA, all present opportunities. This shift in focus from domestic to international, combined with the demographic changes currently faced by China, demonstrate that the real prospects for Victorian businesses lie in areas where China needs expertise to become a global power, as well as in areas where China needs support to raise the living standards of its population. This means infrastructure, technology, innovation, health and aged care, sustainable urban development and safe food and beverages. The Plan therefore makes clear that Chinese consumers want Victorian goods and services, and that the government in making it easier for their citizens to get them.

As a final point, Tim spoke of a number of success stories within the Australia China trade relationship. It was announced last week that Australian nectarine growers will be able to ship their product directly to the Chinese mainland. The new protocol means that China can buy up to 15,000 tonnes of fruit, about a quarter of total nectarine production in Australia. Additionally, Tim highlighted the rise of eCommerce in China. Chemist Warehouse was one of the first to take advantage of the eCommerce revolution. In September last year, they opened their first online store on Tmall Global and have projected sales of $22 million for 2016 and $88 million for 2017. The opportunities in eCommerce are undoubtedly vast, however they are not limited to fast moving consumer goods. The service sector also has a role to play in the online space, particularly professional services, tourism and international education.

Tim concluded his presentation by mentioning the Victorian Government’s new China Strategy, which seeks to build stronger engagement with China - economically, socially and culturally. This was followed by a Q&A session and further networking opportunities. We extend our thanks to Holding Redlich for generously hosting the event. We also kindly thank Tim for his time and expertise, as well as all those who attended. To view a copy of Tim’s slides, please click here.