China’s domestic consumption is now at 80% of their GDP, they no longer have to rely on simply exporting their goods to Walmart.
They’re basically self-reliant.
Think about it, when Apple’s iPhone retails for $1000 in China, she only gets to keep $100.
Now Huawei has a smartphone for $500 and they keep 100% of the margin.
They’re good phones too!
China’s growing up, she’s moving up the value chain and becoming more sophisticated.
What does this mean for Australians?
If China sneezes, Australia WILL catch a cold.
A flu perhaps.
In the worst-case scenario modeled by Deloitte, if China’s economic growth were to shrink from the current 6.5% to 3%, Australia would stand to lose $140bn in income and more than half a million jobs.
At the height of China’s GDP growth in 2010, this was 10.6%.
In my home town resource-based state of Western Australia, we’re feeling every inch of this pain with the slowdown.
Think about it, back in Feb 2011, iron ore prices peaked at $187 USD per metric ton and plummeted below $40 USD in 2015.
Right now, it stands at $91 USD but too late, Perth’s median house price has already dropped by 20% since 2014.
In a less gloomy outcome, the Reserve Bank of Australia has found that a slowdown of 5% in the Chinese economy would see Australia lose 2.5% growth over three years.
So what’s the purpose of this email?
“What are you trying to tell us Gia?”
If you want to transact with the Chinese, don’t just embrace our wallet, learn to embrace our culture and understand the inner workings of our desire.
To put it bluntly, when making financial, educational or lifestyle decisions, Australia is no longer their only option whilst geographically, it is their closest.
A smart developer should know that they’re no longer competing in a local market, your stock is now being compared to others on a global level.
So leverage this.
Start adding value to your customer journey.
Innovation, design, creativity and helping them achieve their long term goals which are often associated with family legacy will open doors.
This will take time and an open heart.
When you’re selling to a young Chinese immigrant, remember they are the product of the one-child policy so they have access to more love and resources than you know.
And birds of a feather flock together, their friends will be the same and relationship selling within these circles is strong.
This doesn’t mean you have to completely change your business model, just take a minute to think about the things you can do that can make a difference.
Build relationships, not close transactions.
Stop trying to dance around your sales office hoping to close the sale immediately.
They might not speak perfect English, but they’re finely intuned with greed.
Go through the process of embracing them into your business, take the time to get to know them, take them out to lunch (yum cha) and give them genuine guidance on how to integrate into our Australian way of life.
Or if they’re trying to break into the job market, give them guidance on how to craft an engaging CV.
And if their friend wants to purchase their first car in Australia, how about introducing them to a reliable Dealership.
Buying a property in Australia for the Chinese is ONLY the beginning.
If you can guide them through the value chain and display a warm desire to help, you will be invited to lunch.
If you get invited out to lunch, make sure you have three cups of tea.
The first cup to break the ice.
Second cup to get to know them.
Third cup to be inducted into their inner circle.
If you’re not being impacted by China’s trade relations with Australia yet, your children or grandchildren will.