JULY 2010Level 8, 350 Collins StreetMelbourne Victoria 3000 Australia

GPO Box 2231Melbourne Victoria 3001 Australiawww.chincommunications.com.au

Telephone 1300 792 446Facsimile (61 3) 9670 0766info@chincommunications.com.au

CHINESE TRANSLATION SPECIALISTSChin Communications Pty LtdABN 36 062 687 085

The Setting – China’s Mega City of ShanghaiShanghai is arguably Asia’s most dynamic and ambitious mega-city. With almost 20 million people, it is also China’s wealthiest and most cosmopolitan city. For the past twenty years Shanghai’s economy has grown at breakneck speed. According to the United Nations Environment Program (UNEP) Shanghai has one of the world’s fastest growing economies; between 2000 and 2008 Shanghai’s GDP tripled.

The futuristic skyline of Pudong is the most obvious evidence of Shanghai’s ambitions. If you think the soaring Mori Tower (affectionately dubbed “the bottle opener”) is an impressive super tall building, the nearby Shanghai Tower will be even taller when completed. At 127 storeys the Shanghai Tower will also boast the world’s highest open air observation deck. In 2009 Shanghai’s booming economy was larger than Hong Kong’s and the Shanghai Stock Exchange now challenges Tokyo as the Asian region’s number one bourse.

To get the city ready for Expo 2010 the city government outlaid tens of billions on new and upgraded infrastructure, including a massive expansion of the subway and rail network. Once the subway and city rail network is fully completed, it will be larger than London’s, previously the world’s largest. What took London a century took Shanghai a little over a decade.

In the past 15 years the urban population has exploded from around 13 million to over 20 million. Booming incomes have fuelled demand for housing and cars, which now choke the streets. According to a BBC report, the urban area of the city increased six-fold in the same time frame, from 100 sq km to 680 sq km, including the rapid expansion of new development areas such as Pudong. The pressures of urbanisation, including serious concerns about air and water quality have influenced Shanghai’s decision to focus Expo 2010 on ways to improve and enhance urban life on a global scale.

Shanghai Expo – Tips for the VisitorThe first thing to be ready for is scale; Expo 2010 is vast and is spread over an enormous area on both sides of the

Huangpu River. The site was once home to some of the city’s most outdated and highly polluting industries – now these have been decommissioned or relocated outside the residential area. Some of the old industrial structures have been retained and adapted for new uses, but most of the site has been given over to the world’s national pavilions, new parklands and demonstration sites for the latest in environmental and sustainable design and thinking.

Over 5 square kilometres of the city were consumed for Expo and there are literally hundreds of pavilions to choose from. The Puxi side of the river is devoted to major corporates from China and overseas and The Urban Best Practices Area (UBPA) which showcases innovative and sustainable housing and urban design solutions from around the world. On the other side of the river are the national pavilions – all 187 of them. This is where the real action takes place. Getting to see all of Expo – or even most of it – would literally take weeks – so be strategic about choices. The best way to see just how big Expo is from driving across the massive Lupu bridge, the world’s second longest steel arch bridge.

The second thing to prepare for is the crowds. Getting into Expo and the pavilions is not for the fainthearted – or the

Chin Communications · Chinwags July 2010

BIGGER THAN THE WORLD CUP – BUT WHO KNOWS ABOUT IT?

It’s being called the greatest show on earth, a USD$45 billion extravaganza that will draw more than 70 million spectators. The price tag and head count make Shanghai’s World Expo 2010 more expensive and far bigger than Beijing’s 2008 Olympics – and arguably the single biggest event ever staged anywhere on the planet. Shanghai does nothing by halves – and hosting World Expo only confirms its status as China’s most ambitious and audacious city. Branded with the theme of “Better City, Better Life” Shanghai’s World Expo also tackles what is looming as one of China’s – and the world’s greatest challenges – sustainable urban development. So what can visitors to Shanghai expect from Shanghai and World Expo? And outside China who even knows about it? A quick straw poll at several Melbourne events recently revealed a complete blank about World Expo. Different story if you are focused on doing business with China – this is the unmissable last big opportunity to ply your wares.

Queue at the Spanish Pavilion Source (and many more great shots): http://www.lightstalkers.org/anthony-anderton

and lenders. Yet the engine of Chinese growth continues to roar ahead after the GFC and in 2010.

Australia’s Largest Export MarketSustained growth in the Chinese economy is good news for Australia. China is now our largest export market, thanks to booming Chinese demand and record high prices for our mineral resources. Will the positive outlook for China’s economy in 2010 usher in another boom in demand for Australian coal, iron ore and resources, and create another surge in Australia’s national well being?

Putting aside the new Australian mining tax, and what impact it may or may not have on new investment and the health of the minerals sector, all the signs point to sustained, robust growth in Chinese demand for minerals and raw materials.

In March The Australian reported growing demand for mineral sands and quoted minerals sands miner Matilda Zircon saying significant price increases were expected in 2010. Prices for iron ore and coal were reported to be rising in late 2009 and into 2010.

The trend was confirmed in April 2010 when Australia’s exports surged to record levels, generating an unexpected trade surplus. Australian resources – notably coal and iron ore were major contributors. Bloomberg Business Week (June 2) reported from ABS data “Increasing demand from Asia is fueling an investment boom in Australia’s resources industries that is forecast by the central bank to last more than a decade.”

Reserve Bank of Australia Governor, Glenn Stevens3, confirmed the surge in demand and prices for Australian commodities. Stevens predicts that Australia’s 2010 terms of trade are likely to reach the historic peak seen in 2008. He also cautions that demand from Asia – and China in particular is also likely to ease somewhat from current highs.

Yet Australian assessments of China’s economic performance mean strong demand for our coal, iron ore and LNG will continue for the foreseeable future. The RBA offered the following recent overview of China4:

“China continues to be at the forefront of the recovery... and recent indicators suggest that this momentum has continued. Investment in the manufacturing sector and in infrastructure has, if anything, surprised on the upside. The main issue continues to be the potential for the Chinese economy to run too hot, putting upward pressures on the prices of goods and services and on housing prices. Recently, the Chinese authorities have been responding to this risk, especially through steps to rein in the property market.”

impatient. Unless you have a special VIP pass, are on an organised Mission, or have some other guanxi to get you admitted through a side door, waiting times can be several hours for the popular national pavilions, such as Australia, Japan, the USA, Spain, UAE, Saudi Arabia and the UK. Getting into the striking Chinese national pavilion is even more daunting – you have to line up to get a ticket to join another line to gain entry at a designated time on another day. Very few national pavilions have waiting times under an hour (North Korea, Iran, Timor Leste are some of the least crowded options) – and that was on a relatively quiet week day. Come the weekends and national holidays the crowds and the lines will be even more overwhelming. In late May daytime temperatures were warm and mild – but in the sweltering Shanghai summer, standing in the sun for hours will be a real challenge. What drives many of the huge crowds is the system of Expo Passports, which allow holders to collect “stamps” from different countries and which will become high-priced collectors’ items. According to the official website of the Australian Expo Pavilion 50,000 visitors poured through the Australian site on June 6 – with more than 500,000 people visiting the Expo Park.

We’ve prepared a special guide to Expo and visiting Shanghai: chincommunications.com.au/registrationform.php

Pavilions of NoteAustralia’s ochre tinted steel pavilion is suggestive of Uluru and the tones of the Australian outback. The total cost of the Australian pavilion is reported to be in the region of $AUD85 million – and comes with numerous eco friendly features such as solar heating and water recycling, the striking Australian structure looks like it will be ‘purchased’ by one of the provinces at the end of Expo. Australia has one of the busiest and most popular pavilions and the showpiece is the central auditorium which presents a multimedia show of modern Australian life in Chinese.

Just some of the standout national pavilions include: the United Arab Emirates stunning gold and silver tinted sand dune, designed by Sir Norman Foster (while many other pavilions will be demolished after Expo concludes, the UAE’s will be dismantled and shipped back to the Emirates and rebuilt as a tourist attraction); the Chinese national pavilion, which has been called the Oriental Crown, and which is one of 5 buildings that will remain at the expo site permanently and which will be converted into a history museum; the United Kingdom’s Seed Cathedral by Thomas Heatherwick with 60,000 acrylic rods (each of the swaying rods contains a seed from Kew Gardens Millennium Seed Bank) which draw light into the structure during the day; and the Spanish “Basket” , which features an outer shell of 8,000 hand woven baskets.

Inside, the pavilions offer very different approaches to showcasing their respective countries, culture and identity; Cuba offers its guests the choice of fine Cuban cigars, iced daiquiris and little more; Qatar showcases traditional crafts, music and desert lifestyles, the Democratic People’s Republic of Korea boasts of a “People’s Paradise”, while Spain’s hand assembled wicker basket pavilion, greets visitors with an extravagant projection of images onto walls of a cavern like entrance and a Flamenco dancer performing in the midst of the crowd, while Denmark has transported the city’s iconic Little Mermaid all the way to Shanghai for the duration of Expo 2010. Saudi Arabia has a 1600 square

metre screen – one of the largest in the world – bringing Saudi’s incredible beauty to life … there’s a lot to see and plenty of people to see it with.

Getting ThereTravelling to and from Expo has been managed well. The city’s extensive subway lines are linked to the sites, and an army of Expo taxis ferry passengers around Shanghai. The cab ranks at the Expo site are orderly and well managed. City hotels seem well prepared to assist visitors, and many of the larger hotels sell day tickets and also assist with transport, directions, maps and helpful instructions. You can also pick up Expo tickets at any China Mobile office – or outside the gates at vending machines. A single day ticket costs Y150. An army of volunteers are stationed all over the city and are friendly, helpful and usually equipped with good English language skills. The city taxi drivers all know exactly what Expo means – but make sure you clear about which side of the River you want to visit. A regular ferry service runs between the two sites and is well worth taking, if only for a great view of Expo by night and of Shanghai’s bustling river life. The influx of domestic and international visitors is putting the city transport system to the test at peak hour – and hotel accommodation is tight, with most visitors facing steeply increased tariffs during Expo.

What the tens of millions of visitors – many from far flung regions – will ultimately make of Expo 2010 is hard to predict. If nothing else they will come away with an image of Shanghai as a city to be reckoned with.

Make a lasting impression on your Business Mission

If you are planning a visit to World Expo to pursue business opportunities, there are a number of government and official delegations that can pave the way and get you into VIP areas and functions and the all-important and targetted networking. Whatever you do, be well-prepared with materials translated correctly in Chinese, your Chinese business cards stocked up – check your names and title are appropriate, and be ready with a few polite words in Chinese. If you are presenting, get your presentation and speech sent to the organisers well in advance to assist interpreter preparation. When working with an interpreter (if consecutive), make sure you pause frequently to enable the interpreter to keep up. This will double the time of your presentation – so if you are allocated 20 minutes and an interpreter is beside you – you’ll only be able to speak for 10 minutes.

Chin Communications · Chinwags July 2010 Page 2 Page 3

We’ve worked on a number of business missions on subjects as broad as food and beverages, ICT and biotechnology and with careful planning some big deals have materialised at Expo – putting your compelling case in Chinese is very important. To help you, we’ve written a new book on etiquette – getting the meetings and greetings right. Contact us for a copy and give your proposition the best chance. And of course, we’re ready to help you get your translated materials in best order.

Crouching Tiger Ready to PounceIn 2009 China evaded the economic recession that engulfed much of the world’s economies. Powered by an aggressive government-backed stimulus package, China’s economy recorded an impressive GDP expansion of 8.7%, with fourth quarter growth of 10.7 percent.

China’s outlook for 2010 is very optimistic. Preliminary estimates for first quarter GDP growth are around 11.9 percent.1 China’s economic rise seems unstoppable.

World’s BiggestChina’s ability to maintain high growth, even in times of an economic global downturn, has reinforced a view that it is on track to outstrip Japan and ultimately the USA to become the world’s biggest economy.

Writing in Foreign Policy, Robert Fogel makes the following prediction:

“In 2040, the Chinese economy will reach $123 trillion, or nearly three times the economic output of the entire globe in 2000. China’s per capita income will hit $85,000, more than double the forecast for the European Union, and also much higher than that of India and Japan. In other words, the average Chinese mega-city dweller will be living twice as well as the average Frenchman when China goes from a poor country in 2000 to a super-rich country in 2040.”2

It’s a prediction endorsed by others, including Goldman Sachs, who nominated 2027 as the year when China will have the world’s largest economy and the Carnegie Endowment which predicted in 2008 that China’s economy will surpass that of the United States by 2035 and be twice its size by mid-century

There are serious concerns about the Chinese economy, including inflationary pressures (especially in real estate), rising labour costs, the value of RMB, and perennial concerns about the true financial state of China’s banks

Chin Communications · Chinwags July 2010

AUSTRALIA UNLIMITEDSome of you will recognize the new brand – Brand Australia developed by M&C Saatchi for the Federal Government – a $20 million program to position Australia in the global marketplace. What you may not know is that Chin Communications was engaged to develop the Chinese concept and our MD, Charles Qin, was in Shanghai with Trade Minister Crean to launch the new brand at World Expo. The logo represents Australia and symbolizes our growth and expansion and our outward looking approach and aims to ensure Australia is highly

regarded and recognised in global business.That approach was on show recently with two high-level visits to Australia in the space of a week. Celebrating the 30th anniversary of the Melbourne-Tianjin Sister City Relationship saw the high-profile Mayor of Tianjin arrive for a range of business events attended by hundreds of Melburnians. Hot on his heels was the man destined to be China’s next President, Vice President Xi Jinping – a jam-packed program of business engagements, a football game and formal functions. Chin Communications worked with all levels of government on these important visits with Charles and his team making the interpreting and translating flow seamlessly.

2010China’s GDP: approaching $5 trillion USD

Per Capita Income: $3677.00 USDMid-century

GDP $123 trillion (forecast)$85,000 per capita income (more than

Japan and EU – forecast)

China Key Reason for Avoiding Worst of GFCThe importance of China to Australia has thus moved beyond its attraction as a growing export market or potential source of new investment capital, tourists or fee paying students. The continued health of the Chinese economy and sustained demand for raw materials and inputs is now critical to the overall health of our national economy.

Among the key factors that contributed to the relatively mild impact of the global financial crisis on Australia and our strong recovery in recent months is China. China’s unexpectedly robust rebound from the GFC throughout 2009 and into 2010 (along with other emerging economies in Asia) has helped Australia avoid the problems that engulfed other developed economies, many of which are yet to see signs of real recovery. Predictions of a strong Australian economy in 2010 and into 2011 rest in no small measure on China continuing to grow strongly – and continuing to purchase our raw materials.

Footnote for Doing Business with China – Revaluing the RMBAfter months of speculation, China’s central bank announced on 19 June that China would introduce a more flexible approach to managing the value of the Yuan (RMB). The Yuan had been pegged to the $USD since mid 2008. The move came after intense pressure on China from the international community – especially the United States – to allow the Yuan to appreciate on international markets.

China’s decision immediately drew positive international responses from the United States and others.

Expectations are that a stronger Yuan will be good news for China’s international business partners, including Australia. A stronger Yuan potentially gives Chinese consumers greater spending power to buy foreign goods – which could assist foreign companies to export more to China. For Australia a stronger Yuan may boost China’s buying power for minerals and natural resources, an expectation that has initially helped push Australian mining stocks higher. Economists also tip some benefits for China, principally an opportunity to shift economic reliance on exports (which had arguably been propped up by an artificially low Yuan) to a more sustainable domestic growth model.

Despite the move, the details of how the flexibility will be managed are still unclear and China’s move does not constitute an official revaluation of the Yuan. Economists expect a gradual appreciation of the Yuan against the $USD and other currencies.

1. Reported by Reuters 20102. Foreign Policy Jan/Feb 20103. Address to Western Sydney Business Connection 9 June 2010/RBA Website4. Philip Lowe Assistant Governor (Economic) Keynote Speech to Colonial

First State Investment Forum Sydney - 13 May 2010

How Australians View ChinaWhat do Australians really think about China? Do we see China as a friendly economic partner? Or as a threat to our economic independence and a potential aggressor in the region?

For the past six years the Sydney based Lowy Institute has been conducting surveys of Australian public attitudes to a range of international issues, including how Australians perceive our regional and international neighbours. The economic rise of China – and its pre-eminence as a trading partner, has made it one of the key countries covered in recent

Page 4Chin Communications · Chinwags July 2010

Lowy surveys. What did the 2010 survey reveal about current Australian attitudes to China – and Asia more generally?

According to the 2010 Lowy survey, 73% of respondents agreed that China’s growth has been good for Australia. This is an increase of ten points since 2008. At the same time 69% also agreed that China’s aim is to dominate Asia, up from 60% in 2008. The number of Australians who feel the government is allowing too much investment from China was 57%, up from 50% in 2009’s survey. Forty-six per cent of respondents said it was likely China will become a military threat to Australia in the next 20 years, up five points since 2009, while 52% now said it was unlikely. Sixty-six per cent disagreed Australia was doing enough to pressure China to improve human rights.

Rudd Government Good on China ManagementRespondents gave the Rudd government’s handling of ties with China the best score of all countries in the 2010 survey. Relations with China were either ‘a lot better’ (13%) or ‘a little better’ (33%) with only 10% saying they were either ‘a little worse’ (9%) or ‘a lot worse’ (1%). Forty-one per cent said relations were ‘about the same’. Handling of relations with Japan and India, in contrast, were seen as worse under the Rudd government.

Interestingly, when it came to whether ‘the United States should give China a larger say in regional affairs’, Australians opinions were almost equally divided: 45% agreed it should while 49% disagreed.

Australia has moved on from its European IdentityFor anyone interested in Australia’s identity with the Asia Pacific region, the 2010 Lowy survey revealed an interesting picture of how Australians see their place in the world. Thirty-two per cent said Australia was more a part of Asia, 31% the Pacific and 31% said it was not really part of any region, while only 5% said Australia was more a part of Europe.

The survey also polls Australians on which countries they feel warmest towards. The top three in 2010 were New Zealand, Canada and France. Singapore was the highest ranked Asian nation and fourth overall with 69%. The USA was next with 68%. China was tied in mid table with Indonesia on 54%. North Korea was ranked lowest with 37%.

For a full copy of the report and its findings visit: www.lowyinstitute.org

And for lots more on doing business with China, visit www.chincommunications.com.au

With Charles Qin’s interpreting expertise, new PM Gillard off to a great start.