Finding the right partner in the Chinese context Jing Li, Strategic Advisor, ACBC 28 May 2019

Is China the right place? 1.4 billion people, 2nd largest economy in the world Growing middle class demanding premium products and services Aging population Only need 1% market share for it to work Mining, agribusiness, health and aged care, education, tourism, property each a multibillion dollar sector Government is facilitating and providing platform Industry associations, chamber of commerce, professional service providers Many inbound and outbound missions Is China the right place? To sell more products and services, grow my business and make $$$ You are going for the right market, you are in the right sector, the timing is seemingly now, It seems that everything is lined up for success, yet it is so hard, successful case studies are luring but why not me? Ask yourself a few questions first: Is China really for me? Level of confidence, how sure you are!!! Have I really got the product/service China want? Or do I just think this is what the market wants after reading some high level news and reports? A good follow on questions is that, is the product and service good enough for the local Australian market. If you have created a product, what makes you so sure China wants it? Understand the background of and motivations of the people who tells you it’s a good idea is very important. Are you the first one? Or are there case studies relevant to you.

Knowing your core strengths and get prepared Value proposition clear and succinct (core + peripherals) Summary sheet ready for follow up Business plan and financials available Have the same good person to help you with communication consistently (this person reflects on you!) Knowing your core strengths and get prepared For example: I build and manage retirement living villages and wanting to find a passive investor for expansion I am a consultant seeing the need of training doctors in China and have packaged Australian training products for export I provide medical tourism services for general wellbeing and experience Position yourself clearly as you will get many peripheral requests which means you have to stretch yourself. Need to be clear so that expectation can be managed You are not looking for a mere translator, you are look for someone who can represent you in your language, emotion and professionalism.

What do you have and what do you need? Set expectations right. Key elements for a successful business: Products and services - Unique selling points, branding? Technology and patents – Exclusivity and cutting edge? Talents – experience and integrity? Capital - $ preservation and % return though interest or dividend Market Access – margin and share of profit through equity What do you have and what do you need? Set expectations right. Reality: Often in Australia, we have 1,2, and 3 and need 4 and 5 from China Q： have you ever thought about how would your products and services can be improved through Chinese inputs to increase competitiveness. Particularly, with a mind to think about how to localize your products and services with Chinese ingredients. Just like how all the Chinese restaurants in western countries have changed the flavors to suit local pallets. Always think “localize” In fact, the whole point of looking for a partner is not only to provide you with capital and market access, but help you to localize your product and service because being authentic isn’t always going to work. A Chinese family visiting Australia would love to try authentic Aussie BBQ but after Day 1, they will be missing Chinese food. A good story is essential but the numbers need to stack up. You are not just looking for capital and market access but you are also looking for all the other elements. Need to understand capital requires return, market access requires margin.

Multiple channels to test water How do you find them? Join the right circle Industry forums League tables and industry reports Social media Use the government How do you find them?

What qualities should you look for in your partner? Do your due diligence English website and quality Past experience in dealing with western countries Clear on mutual offerings and motivations Style of communication and negotiation A site visit to your partner What qualities should you look for in your partner? To see whether they have a clear value proposition for the Chinese market is very important. Rather than putting something sueperficial together to meet government expectations and government grants. The Xiamen retirement living example.

Be sure China is the right place and a partner makes all the difference Know yourself well and get prepared (value proposition + representative) Set expectations right. Good story is essential but numbers need to stack up Multiple channels to reach out to potential partners Do your due diligence through desk top research, face to face meeting and site visits And good luck. Summary Be sure China is the right place, develop a check list as to why China vs other countries, larger market isn’t one of them, as more competition too. While everyone can read news and know where the macro trend is going, you and your partner should work out what is the niche to focus on. Be open to tailor and localize your product’