The composition of the goods and services that Australia exports to China has been changing because China’s economy has been shifting towards consumption and away from investment, said Helen Wong, Chief Executive, Greater China, The Hongkong and Shanghai Banking Corporation Limited.
Ms Wong was speaking at HSBC’s Australia-China Conference in Sydney and explained that China’s 13th Five-Year Plan, which covers the period of 2016-2020, aims to grow the service sector’s share of GDP to 56% by the end of this decade.
“Let me provide some context: For all the talk about China being the world’s factory, the manufacturing sector’s share of the economy has been declining for years,” Ms Wong said.
“The next big opportunities for Australian exporters lie in services, such as tourism and education, and high-quality food products – in short, a shift from mining to wining and dining.
“As income and consumption rise in China, demand for services will grow – and Australia has plenty to offer.
“We will all benefit from the continuing growth of China’s economy and the further liberalisation of its capital markets.
“On the capital market front, there have been many exciting developments in the past 12-18 months. For example, we’ve seen the launch of Bond Connect and the Shenzhen-Hong Kong Stock Connect.
“Opening the door – even just slightly – to the rest of the world will have great implications for global capital markets.
“Australia is home to the world’s fourth-largest pool of pension savings. As these superannuation funds outgrow the local capital markets, they will increasingly need to look overseas – and China represents an attractive destination.
“China is also a land of opportunity for sustainable finance.
“China’s green bond market has developed rapidly from a standing start: more than US$33 billion of Chinese green bonds were issued in 2016, accounting for over one-third of the global total and up from US$1 billion in 2015.”