1. 1. GOING OUT WHY CHINAS 12TH FIVE YEAR PLAN IS A GAME CHANGER
2. 2. CHINAS PRIORITIES Going Out Going West Going Green CHINAS 12th FIVE YEAR PLAN (2011 2015) CHINA
3. 3. CHINA GOING OUT Australia is the top offshore destination for China Australia Singapore Other Asia Africa Russia Other Europe Latin America Canada US
4. 4. CHINESE INVESTMENTS IN AUSTRALIA .. but still v small compared to total OFDI 0 5 10 15 20 25 US UK Japan Netherland Switzerland Singapore British Virgin Islands Canada Germany China Top OFDI countries in Australia % of Australia total OFDI stock in 2011 Source: ABS
5. 5. CHINESE INVESTMENTS IN AUSTRALIA .. but were slipping behind Top destinations of Chinese OFDI USD billions, transaction value over USD100 million 0 10 20 30 40 50 Australia US Brazil Canada Indonesia Britain Russia Thousands Jan 10 - Jun 12 Jan 05 - Dec 09 Excludes US$15bn investment in Canadas Nexen Source: A long march: the Australia-China investment relationship By John Larum and Jingmin Qian, October 2012
6. 6. CHINESE INVESTMENTS IN AUSTRALIA .. and 80% of investment is in mining Source: KPMG Demystifying Chinese Investment
7. 7. CHINA GOING OUT POTENTIAL FUTURE TARGETS Food/Agriculture/Dairy Tourism Education Healthcare Financial Services Technology Cleantech Software Professional Services
8. 8. CHINA GOING OUT KEY DRIVERS Security of Supply Diversification Migration Growth Influence
9. 9. City of Chongqing (Population 30 million)
10. 10. CHINA GOING WEST Urbanisation Welfare Rising Incomes Domestic Consumption
11. 11. CHINA GOING GREEN Development of clean technology - US$65 billion spent each year, with renewable energy spending growing at 77% p.a. since 2008 New renewable energy sources (hydro, nuclear, solar, wind, biomass and more efficient use of coal and existing energy sources) Clean energy vehicles reduce dependence on fossil fuels and improve the environment 40% to 45% reduction in carbon intensity from 2005 levels by 2015
12. 12. OPPORTUNITIES
13. 13. CHINAS PRIORITIES IN THE MINING SECTOR Industry consolidation to improve efficiency, safety and environmental performance Reduction in dependence on fossil fuels SOEs diversifying into multi sector mining companies Outbound investment requires greater scrutiny to deliver better outcomes
14. 14. WHY NSW AND AUSTRALIA? 40 years of diplomatic relations Australia and China NSW is a sister state of Guangdong Province (since 1979)
15. 15. PRIME MINISTERS VISIT APRIL 2013 Three Tangible Outcomes: Annual Leaders Strategic Dialogue Direct Trading in AUD/RMB RBA to invest 5% of current reserves into Chinese Government debt ($1.6bn)
16. 16. WHY NSW AND AUSTRALIA? 40 years of diplomatic relations Australia and China NSW is a sister state of Guangdong Province (since 1979) Geographical convenience (time zone, logistics, transportation costs etc.) Stable legal, political, economic and regulatory climate High quality product, environment, safety and infrastructure
17. 17. INVESTMENT IN FOOD SECURITY