China has the MONEY and the MARKET
China has the MONEY:
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Foreign exchange reserves stand at US$3.399 trillion, almost three times the reserves held by Japan (US$1,387 trillion) which is the second largest in the world.
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The largest four banks in the world are all Chinese (the Industrial & Commercial Bank of China, the China Construction Bank, the Agricultural Bank of China, and the Bank of China) with a combined asset value of $13.784 trillion, which is roughly equivalent to the next 6 largest banks combined,
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China’s banks export capital via overseas lending at an annual rate of 11%, suggesting that they are starting to have more influence around the world, particularly in major infrastructure projects in developing countries.
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In total, the Chinese state and its subsidiaries have lent about $1.5 trillion in direct loans and trade credits to more than 150 countries around the globe. This has turned China into the world’s largest official creditor – surpassing traditional, official lenders such as the World Bank, the IMF, or all OECD creditor governments combined.
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Since 2015, China’s share of global cross-border lending has risen from 5% to 7%. Foreign assets account for 9% of their book.
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Chinese banks supply two-thirds of all cross-border lending within emerging markets.
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Chinese home-grown companies have been rapidly raising USD dollar debt, reaching $310bn last year, from $71bn in 2016.
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China owns $1.1 trillion of US Treasury Bonds (approx 5% of all US debt)
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Chinese investment into Europe reached a peak of US$42 billion in 2016 but has since fallen away to around half of this number (mainly invested in UK, France, Italy and Germany).
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China is the world’s largest investor in renewable energy – China contributes to almost one third of the global renewables investment in 2018 at $US91.2 billion, US$130.2 billion)
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In 2019, China spent 354.3 billion yuan (US$52.8 billion) on R&D and science and technology innovation, up 13.4% year-on-year
China has the MARKET:
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The world’s second largest economy – will overtake the US by 2027 or earlier
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Population of 1.3 billion
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Middle class of 400 million and rising
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800 billionaires, 4.4 million millionaires
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An economy driven by domestic consumption (80% of GDP)
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350 million millennials (born between 1981 and 1996) representing 65% of total consumption growth in China
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900 million registered internet users (99% via mobile)
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Almost fully urbanised (61.4% of the total population live in urban areas, a dramatic increase from 17.92% in 1978)
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The world’s manufacturer (China accounts for 28% of global manufacturing output, US$4 trillion)
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The World’s Major Trading Partner – 128 of 190 countries regard China as their No. 1 trading partner (including Australia)
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5G technology to be rolled out throughout China by end of 2020
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By the end of 2020, China is expected to have 160 million people accessing their new 5G network, meaning that they will access internet download speeds which are 100 times faster than 4G
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Online media consumption in China has increased by 30% over the past 12 months which is transforming many industries, especially education (which has seen an increase of 79 million users during the Covid period) and healthcare
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Major focus on the Healthcare, Education, Tourism and Renewable Energy sectors – all areas in which Australia has world class capabilities
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China has 9 of the world’s 20 biggest tech companies
Get the support you need to engage in the China market
Small to medium sized enterprises (SMEs) represent over 99% of all companies operating in Australia, including those from some of the most dynamic, entrepreneurial and innovative sectors of our economy, and employ 70% of the working population. China’s large and growing market of entrepreneurs, investors and consumers creates unique opportunities for Australian SMEs who are flexible, nimble and have access to the necessary knowledge, networks and support.
If you are an SME business owner, investor or entrepreneur looking to engage in the China market and seek support, you can visit the Australia China SME Association.