Bruce Ross Consulting concentrates its activities on just one part of the huge country of China, namely Shanxi Province. Shanxi, one of the 23 provinces of the People’s Republic of China, has 33 million people, that is, one-and-a-half times the population of Australia. It is just three hours by high speed rail and four hours by road from Beijing. It generates considerable wealth from coal mining, but until now has had very limited business links with Westerners.
Untapped potential for Australian investment
There is intense competition among Western companies to do business in Beijing and Shanghai and also in China’s coastal provinces, but an area such as Shanxi basically constitutes a new frontier, a place where there is very limited competition for those Australian companies with new products and ideas which want access to a greatly expanded market. In addition Shanxi is bordered by other provinces with similar attributes – Inner Mongolia, Shanxi and Henan – so that once having established a beach head in Shanxi Province the prospects for further expansion are virtually limitless.
Shanxi Province is relatively compact occupying just 1.63% of the national land mass. It has 11 cities ranging in population from 1.4 million to 5.2 million. It also has 119 counties and districts. This third tier of government is of particular importance to foreign companies because they compete vigorously with one another to try to attract new investment into their areas. Bruce Ross Consulting has focussed on developing strong links with those counties and districts in Shanxi Province which are most keen to gain access to Australian technology and expertise.
Mineral wealth as the basis for transformation
Shanxi Province is rich in minerals. Reserves of 34 of these rank among the top 10 in the country. Shanxi ranks first in China in reserves of coal, coal bed methane, bauxite, coal clay, laterite, and potassium, and has the second largest reserves of rutile, pearlite, gallium, vermiculite and glass-oriented limestone. The Province has been called the “home of coal”, because of its 260 billion tons of proven reserves, a third of the country’s total.
The pillar of Shanxi’s economic structure is the energy industry, which accounts for 14% of regional GDP, 30% of total industrial output and 20% of fiscal revenue of the Province. Having now been designated as China’s “comprehensive transformation pilot area of resource-dependent economy”, Shanxi will focus on building the Province into the country’s new type energy and industrial base, and step up its efforts to turn the area into a major modern manufacturing industry base of the country, a modern centre of logistics and an important production service provider for central and western China. By achieving all these targets, Shanxi intends to become an economic and cultural giant in central China. By these means the task of transforming economic structure and a leapfrogging of development will be fulfilled.
Shanxi has 75 institutions of higher learning, catering for graduate, undergraduate and vocational technical students. It has 78 scientific research institutes, employing 680,000 people, and has made breakthroughs in the areas of information, biological science, new materials, advanced manufacturing, and clean coal technology.
There are 2.63 million hectares of land for exploitation; 300,000 hectares of that for farmlands, 972,000 for wooded areas, and 1.36 million for animal husbandry. Given China’s preoccupation with food self-sufficiency Shanxi’s counties are extremely keen to encourage Australian farming companies to lead the way in lifting agricultural productivity and the quality of livestock.
Growth in international trade and regional income
In 2010 Shanxi Province had around 1,500 export-oriented enterprises, more than 1,000 joint ventures and 10,000 companies that produced goods for export. About 3,000 foreign companies also had a base there. By 2012 the regional GDP of the Province in surpassed 1.2 trillion yuan ($180 billion) and the fiscal revenue reached 265 billion yuan ($40 billion). Total consumption commodity sales reached 440 billion yuan ($68 billion). In 2012, rural and urban residents in Shanxi had significant income increases. Urban residents’ per capita annual disposable income was 20,412 yuan ($3140), 11.8% higher than that of the previous year. Per capita net income of rural residents was 6,357 yuan ($978), 11.6 % higher than that of the previous year.
A new frontier
Thus far few foreign companies have established operations in Shanxi, and of these about half have come from Hong Kong. For enterprising Australian small and medium sized enterprises prepared to move out of their comfort zone Shanxi Province presents as a new frontier of extraordinary potential offering the prospect of securing first mover advantage. Bruce Ross Consulting can offer introductions, support and guidance for companies wishing to take advantage of the abundant opportunities in Shanxi Province.