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Red China gets Green light for Beijing 2008

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Beijing Olympics 2008, here we come! Australian business is set to hit the Chinese ground running.

At the Sydney Olympics in 2000, Woodhead, a niche Sydney architecture firm, got a lucky break. At a major business networking event, run by the Australian Government’s Business Club Australia (BCA), the firm’s partners were seated next to some Singapore airline executives and Singaporean Government officials.

 

They got talking about extensions to the new Changi Airport Terminal 3. As a result of this chance meeting they researched the opportunity and ended up winning the job (which was estimated to be then worth $S1.4 billion or $A1.35 billion).

 

On the strength of designing the new airport terminal’s interiors, they then managed to win another job at the Singapore National Library (then worth around $S230 million, equivalent to $A222 million).

 

Even though Woodhead had been in business since 1927, the Olympic Games in Sydney 2000 gave it that crucial break into global markets. According to Woodhead’s principal Robert Hopton, the Singapore deals have enabled the firm – now known as Woodhead International – to break into: Thailand, Malaysia, India, Nepal, and of course, China. “Getting a foothold in Singapore really helped us take off in Asia. And it was all thanks to those functions at the Sydney Olympics,” he said.

 

Of course, Woodhead International is not the only architectural or design firm to be a major beneficiary of the Sydney Olympics in 2000. Another Sydney firm, PTW Architects, are designing the infrastructure for Beijing, including the Olympics Village.

 

In fact, many firms also did well at Athens in 2004, in preparation for bigger things in Beijing. In manufacturing, Steriline Racing supplied and installed the starting gates for the racecourse at Markopoulos, the Athens equestrian venue. In engineering services, Sinclair Knight Merz, a big winner from Sydney 2000, were involved in the design and engineering of the roofs for the main Athens Olympic stadium and velodrome, plus the pedestrian and transport interchange in the OAKA precinct.

 

And Sydney-based TAFE Global secured a multi-million dollar contract to help train around 80,000 Olympic staff and volunteers to perform nearly 1000 different jobs ranging from ticket-selling to venue management. TAFE Global will also play a big role in Beijing in 2008 and possibly London in 2012.

 

So how did these firms do it? Through networking – plain and simple. There were potential buyers, customers, clients and business partners coming to the Sydney Olympics, so aspirational Australian exporters just needed to make sure they were in the right place at the right time. [Of course, Sydney was a special case as it enabled many SMEs access to international business executives – many of whom were coming to Australia for the first time].

 

But after taking their once in a lifetime opportunity in Sydney 2000, they have cleverly built their brand at other events and in emerging markets more broadly. As BCA’s manager, Ashley White, points out, the special event strategy for doing business has been developed over the decade in both on-shore and off-shore forms.

“After the success of Sydney 2000, the Rugby World Cup 2003 and the Melbourne 2006 Commonwealth Games, Austrade decided to expand its business networking program at the Rugby World Cup 2007 in France, the FINA Swimming championships and Spring Racing Carnival in Melbourne before heading to the Beijing next year. With few major international events in Australia on the horizon it made sense to take the BCA model overseas.”

 

Since its inception, BCA has held over 260 networking events in Australia and overseas. There are around 8500 members – with some 37% located offshore – and the BCA program has facilitated over $1.7 billion in trade and investment deals since 2000. That certainly shows the economics of networking – or ‘the power of schmooze’ – works in practice.

 

So what makes Beijing so special? One reason is the whole China phenomenon. China will be keen to display its economic credentials to the world in Beijing, and how advanced it is as an open market economy.

 

This is particularly important to Australia, as China’s (by calendar year 2006) second largest export market (worth over $24 billion), our second largest trading partner ($50 billion worth of two-way trade) and a burgeoning source of and destination for foreign investment.

 

[In fact some commentators have included Hong Kong with China to show that the combined total of the two markets now surpasses Japan in terms of two-way trade with Australia.]

 

China’s economic progress has not only benefited the blue chip corporates such as the likes of BHP Billiton, Rio Tinto, Woodside and ANZ. Many Australian SMEs are heading within the great trade wall of China. According to Austrade/ABS/Sensis research, over 3800 Australian businesses export goods to China and 20% of all exporting SMEs are involved in the China market – a proportion that has doubled in only two years.

 

According to Peter Osborne, Australia’s Senior Trade Commissioner in Beijing, who doubles as China Country Manager: “We have a wide variety of Australian clients involved not just in resources but in new sectors, such as financial services. The demand business advice here in China is growing so strongly that we have grown our extensive Greater China network to 15 offices, and you’ll find an Austrade presence as far north as Dalian and as far south as Kunming.”

 

Osborne expects the Beijing Olympics will be not only an opportunity for China to showcase the opportunities in its vast market, but it will also be an opportunity for Australia to display our credentials as well. “Every man and his dog will be in Beijing, so the Australians have got to show a strong showing too,” he said.

 

In fact, the lead-up to the Beijing Olympics itself has created some new opportunities for Australian exporters. The Sydney Olympics’ hard-won reputation not only as the “best games ever” but also the “Green” games has helped build Australia’s brand as being innovators in areas such as environmentally friendly design, infrastructure and technology.

 

As well as environmentally friendly design work undertaken by PTW Architects on the Olympic Village and the athletic facilities, Australian companies have also been involved in logistics, including traffic flow around Beijing and related infrastructure and have transferred water reticulation technology which was first developed for the Sydney Olympic Games.

 

And with the rise of global warming and the volume of greenhouse gas emissions emanating from China, it is crucial that Australia have its green credentials on display in Beijing. Already companies like Victorian-based Novatech Controls, has developed oxygen analysers to reduce emissions in power plants of the north west city of Xian, and companies like Stratcon, Barefoot Power and Global Sustainable Energy have provided environmental consultancies and technologies throughout China.

 

Even Woodhead International, our BCA success story of 2000, has changed its operations with the objective in becoming carbon neutral, not only in its design, but also in its own operations. Woodhead plans to reduce its own emissions by 10% to 15% within three to five years, and is also creating designs that will have similar effects for its clients – particularly in China and India.

 

According to Woodhead’s managing director Geoffrey Lee: “China in particular is very conscious of the environmental impact of its huge growth and is desperate for experts to help address these issues.”

 

The road from Sydney to Beijing has brought many opportunities for Australian companies looking to expand into the vast China market, but to also promote their business potential and first-class standards worldwide.

 

In 2000, a small architectural firm like Woodhead seized its chance to go global into South East Asia and ultimately China. Now, in the lead-up to Beijing in 2008, it is again taking the opportunity to promote its environmental credentials.

 

Many Australian exporters will take the same path as Woodhead. And in many ways, just as the Sydney Olympics in 2000 were an once-in-a-lifetime opportunity for Australia to showcase it economic capability, the Beijing Olympics in 2008 will be an once-in-a-lifetime opportunity for Australia to show its strong capability in environmental exports.

 

This will not only help boost Australia’s trade and investment with China but will ultimately assist the whole world by helping to combat climate change.

 

For that reason, the Beijing Olympics in 2008 could be significant to the whole world in more way than one. So let’s bring them on!

 

 

 

*Tim Harcourt is chief economist of the Australian Trade Commission and author of Beyond Our Shores – see: www.austrade.gov.au/economistscorner

 

For more Gone Global blogs, click here.

 

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