OPPORTUNITIES FOR AUSTRALIAN COMPANIES DOING BUSINESS IN CHINA

1. OPPORTUNITIES FOR AUSTRALIAN COMPANIES DOING BUSINESSIN CHINA CHINA LUNCH ROOM BEC- St George & Sutherland Shire 09 May, 2008. Sarah Chi SEPA WATER AUSTRALIA schi@sepawater.com

2. INTRODUCTION TO SEPA WATER AUSTRALIA • Sydney based environmental engineering company • Specialising in the design & construction of Industrial WWTPs • First set up in China was 2004 • Companies in Australia, NZ, Thailand, China & USA 2

3. INTRODUCTION TO SEPA WATER AUSTRALIA • SEPA China Business set up has achieved the following: • SEPA has successfully set up company in China within 4 years, • has completed more than 30 waste water treatment project in China, • Industrial experience including aviation industry, steel works, power station, textile industry, shipping deballast, cosmetic & food industry. • The Panyu centralized industrial treatment plant project (capacity of 30,000cu.m/d) for textile industry is the biggest business success in trading with China. 4

4. SEPA PROJECT

5. AUSTRALIA GOVERNMENT SUPPORT • SEPA had received tremendous support from Australian Government both Federal and provincial level. • SEPA had initially joined a number of NSW Business Missions to China, • Through Austrade assistance we have establish business in China, • NSW Minister, Mr David Campbell had inspected our first Turn-key project in Panyu during the plant commissioning in 2004, • the Australian Consul General, Mr Kevin Magee officially opened our China office in Guangzhou in 2005. 6

6. SEPA in CHINA – 30,000 m3/d Textile WWTP.

7. FEDERAL GOVT SUPPORT

8. MAIN DEVELOPMENT AREAS • Shanghai – Yangtze River Delta • Guangzhou – Shenzhen – Pearl River Delta • Shandong Province • Tianjin • Northern Provinces – Liaoning, Jilin, Heilong Jiang 12

9. CHINA NEW TAX REFORM effect on foreign investment • The new tax reform had removed tax holiday from Foreign Investment company, new company registered from this year, will no longer have the privilege treatment (2 year tax free, 3 year 50% reduction). • For those company which had been approved to have the tax holiday, will remained as same, but if the company operation life period is sort then 10 years, all exempted tax must to be repaid back. 18

10. CHINA NEW EMPLOYMENT LAWStarted from 1st January 2008 • The new employment law has very heavy penalty on company who did not sign employment contract with its employees (double pay salary rule composed for whole period without contract). • Allow employees have life period employment with a company who had signed two fixed terms employment contracts. • Company must give one month notice to employee before terminate a contract, but employee has no need. • Compensation payment must be made to employee if a resignation was accepted by company, or termination is made by company, or on contract completion (one month wage, plus one month per year). 19

11. CHINA NEW VISA RULEStarted from 28 March 2008 • Signal entry visa rule from 28 March 2008. • Visa Notification Form required by New employment visa application. • New visa application • From 15 April 2008, need return tickets • Duration will depend on air tickets booking • Hotel reservation in China is required • period longer than before. 20

12. ENVIRONMENTAL OPPOURTUNITIES IN CHINA • In developing an Export business: • Do not take on more than you can cope with • Be focused – work to a plan • Lead from the top • Be committed • Do not set unrealistic objectives • Appreciate that business is conducted in different ways in other countries • Be flexible, prepared to learn, be patient • Persevere 21

13. GOOD LUCK WITH YOUR EXPORT BUSINESS! 22