Speaking to the masses

Kevin Rudd’s ability to speak Chinese has boosted the confidence of Australian SMEs to do business with China. TIM HARCOURT You learn a lot from your children. And they tend to tell the truth, so you know where you stand.

For example, whenever Prime Minister Kevin Rudd appears on television, my four year old Chinese-born daughter Yun Shi says: “That’s Kevin, he can speak Chinese. But you can’t Baba. But that’s OK; I will be your teacher.”

But it looks like Yun Shi Harcourt is the not the only one impressed by the Prime Minister’s language skills in Mandarin. According to a new survey by Telstra, 42% of all small and medium sized enterprises (SMEs) interviewed who are currently or intend to export believe that Australian Prime Minister Kevin Rudd’s ability to speak fluent Mandarin creates a more positive environment for Australian companies doing business in China.

The Telstra survey also said that while many were largely unaffected by the 2008 Beijing Olympics, 16% did however feel the Olympics would have a positive effect.

With all the sub-prime talk around, the survey also showed that SMEs thought that having a presence in China would cushion them in the event of a global downturn. Just over a quarter of companies who export to China now thought the Chinese market to be pretty good insurance if things got rough elsewhere in the global economy.

This Telstra survey result on language is consistent with other surveys that show that business culture and language matters when Australian SMEs are engaged in exporting or investment off-shore.

According to the DHL Export Barometer, 21% of exporters said language was a major barrier to exporting, while 30% mentioned different business principles and 29% mentioned the regulatory environment as well as transport and logistics as impediments to further trade.

That’s why assistance with language, business culture, principles and regulation is seen as a major reason why exporters seek government help offshore. Market access is one thing, but there are plenty of “behind the border” barriers that Australian exporters need help with.

But despite the language barrier, the Chinese market is expanding at a rapid rate for Australian exporters. According to Austrade research, over 4250 companies now export goods to China and over 3000 have a physical presence in the Middle Kingdom.

Accordingly, Austrade now has 15 offices in greater China to service the increased demand for Australian businesses looking to export to and invest in the Chinese market.

And the Beijing Olympics is a good opportunity to get started – particularly given that our PM’s Chinese skills will be on display. In fact, Business Club Australia (BCA), a business networking club set up by Austrade to leverage the trade opportunities emanating from the Olympics, will be holding an extensive program of activities at the Beijing Olympics in 2008.

BCA, which was first set up at the Sydney Olympics in 2000, will provide opportunities for Australian businesses to meet their Chinese counterparts and give them access to the highest ranks of Chinese officialdom during the Olympic Games. The success of BCA at Sydney 2000, as well as at the Rugby World Cup in 2003 and 2007 and the Commonwealth Games in 2006, has yielded an estimated $1.7 billion in trade and investment deals, showing that business and sport do mix.

So as Yun Shi pointed out, while we all can’t speak Mandarin as well as Kevin Rudd can (myself included), when it comes to the language of business, there are plenty of Australian businesses, large and small, doing very well in the Chinese market.

The Beijing Olympics will provide an opportunity for more Australian businesses to get involved and we are likely to see more Australian trade action in China even as the Olympics are passed on from Beijing in 2008 to London in 2012.

Tim Harcourt is Chief Economist of the Australian Trade Commission and the author of Beyond Our Shores and The Airport Economist. See: www.austrade.gov.au/economistscorner

The Airport Economist
Did you know that Australia is helping Singapore ‘be creative’ to address its imbalance of ballet dancers to engineers and that there is a Transylvanian Cricket Club full of Aussies in Romania? Or that Israeli youngsters are crazy for Tim Tams and the French are buying Billabong board shorts in Bordeaux on Bastille Day? Well if you didn’t, The Airport Economist is just for you.