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Australian SMEs set sights on China and US

Australian SMEs set sights on China and US article image

Australian SMEs expect to expand further into China and the US over the next year with service providers leading the charge, according to HSBC research.  

HSBC's Business Banking research, now in its third year, was conducted in April 2014 by RFi to gauge current and future international business activity.  

More than 150 Australian SMEs with annual revenues of A$3 - A$150 million with existing international connections were surveyed.  

Australian SMEs see growth potential in China and the US?HSBC's research found 46 percent of Australian SMEs surveyed plan to expand into new countries or further grow their existing international operations in the next 12 months, noticeably higher than last year (32 percent).  

The survey shows that Australian SMEs are targeting the US and China as their top destinations for business activity and expansion (54% and 49% respectively).  

Paul Edgar, Head of Mid-Markets and Business Banking for HSBC in Australia said Australian SMEs' focus on the world's largest trading nations is aligned to Australia's broader cross-border activity.  

"For many SMEs, their growth strategy is clear: head abroad for game-changing growth. And China and the US are the two largest economies in the world, so it makes sense to follow global growth drivers," he said.  

Service industries  

Reawakening of the US economy and China's middle class attracting service providers offshore?The research finds Australian service providers have been the biggest international movers over the past year – again with the US and China the focus destinations.  

According to the research, 32 percent of surveyed companies, with international expansion aspirations, are in services industries (compared to 8 percent in 2013).  

And of these companies, 60 percent are targeting the Chinese or US markets.  

Mr Edgar said the US economic recovery and China's growing middle class was encouraging service providers abroad.  

"The medium term growth consumer opportunities of both the US and China are a magnet for Australian service providers and exporters looking to make their mark abroad, he said. “HSBC is observing this paradigm shift amongst its own clients who tell us that expansion to China and the US is driving revenue and sales growth through greater exposure to global customers, suppliers and innovation."  

HSBC is forecasting US GDP growth to nearly double by the end of 2015 to 2.5 percent while China is expected to stay on a path of 7.7 percent by 2015. 

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