The sky is the limit for Kiwi businesses in China
Kiwi businesses must look beyond China’s major cities to take advantage of its diverse provinces, an expert has said.
About 170 cities in China have more than one million residents, but only its top four, Beijing, Shanghai, Guangzhou and Shenzhen are considered first-tier cities in terms of their size and GDP.
Deloitte China chief economist Xu Sitao said that in the greater Shanghai region, there were 10 cities connected by high speed rail.
Second tier cities such as Taiyan, Changchun and Yantai were expected to balloon to 822 million people from 607m by 2025. A survey from earlier this year showed that second-tier cities were attracting more graduates due to more job opportunities in the regions.
Sitao, who was on a visit New Zealand this week, said urbanisation and an overall consumer boom was driving China’s strong growth.
‘‘Currently, slightly more than half of Chinese live in the city. But that will eventually grow to 75 per cent, which will boost consumption and growth.’’
New Zealand craft beer company Moa had been exporting to China for five years. General manager Gareth Hughes said the company exported to four major cities in China but their beer was distributed to the regions as well.
‘‘We started off with a major city, but we saw the regions were the emerging markets and there was a growing middle class there,’’ Hughes said.
He said doing business out of the main centres made good business sense.
Sitao said what made China’s current generation different from any other was a strong urge for an upgrade, be it an increase in their apartment size or the best tourist experience, or the desire for fresh, organic food.
He said changing consumer trends in China was good news for the economy.
And he said education and tourism were continuing to appeal to Chinese millennials.
‘‘Historically, the US and UK were sought after for a good education in China, but people are realising that you can get a very good and affordable education in New Zealand.’’
China also had one of the most technologically savvy consumer bases in the world, with over 900 million people using social app WeChat to browse and buy.
Sitao said he was impressed with Christchurch Airport exploiting this digital market by cracking a deal with e-commerce giant Alibaba earlier this year, to boost tourism.
The deal aimed to get more South Island businesses accepting popular electronic payment system Alipay, but longer-term, the airport also wanted to earn extra revenue by opening a virtual store on Alibaba’s Tmall Global website, charging New Zealand firms wanting a presence there. The deal had the potential to generate $1 million a week in sales to Chinese consumers.