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Investment Fiji CEO speech commemorating 40yrs of Fiji-China relations

Date: 05 Nov, 2015

Symposium for Commemorating the 40th Anniversary of the Establishment of China-Fiji Diplomatic Relationship

Bilateral Economic and Trade Ties
5 November 2015

 

 

 

ADDRESS

by

 

Mr Godo Müller-Teut

Investment Fiji Chief Executive Officer,

 

The Prime Minister of Fiji, Honorable Vorenqe Bainimarama

His Excellency the Ambassador of the Peoples Republic of China Mr. Zhang Ping

Members of the Diplomatic Core

Senior Government representatives

Distinguished Guests

Members of the Media

Ladies & Gentlemen

 

Good Afternoon,

As CEO of Investment Fiji it is indeed an honor and delight to be speaking at today’s event which is themed as the “Symposium for commemorating the 40th Anniversary of the Establishment of China-Fiji Diplomatic Relationship”.

It is in this forum today, where the growing trade, investment and economic relationship between China and Fiji is highlighted and commended.

Ladies and Gentleman Fiji and China’s diplomatic relation goes back to 1975 and the visit by the Honorable President of the Republic of China: Mr. Xi Jingping last year in Fiji and the visit of Prime Minister Bainimarama to China this year is a testimony of the growing relationship between China and Fiji which has seen significant  improvements in both investment and trade.

Fiji offers diverse investment opportunities and has a stable political environment that encourages economic growth and development.

Over the past years Fiji has embarked on an extensive program of infrastructure development and upgrades across the nation.

For instance, the Nadi Airport redevelopment will not only increase travelers experience but also serve as flagship development project, showcasing both the position and aspiration of Fiji as the regions foremost business and tourist destination.

In line with the recently launched Green Growth Framework, innovative renewable energy and bioenergy projects are underway capitalising on Fiji’s large sugarcane and wood production. A strong environmental focus has been a major component of the Fijian government’s development policies.

The continued investment in infrastructure, education and training of our workforce all have implications not only for the attractiveness of Fiji as location to investors, but also for the quality of inward investment, with Investment Fiji witnessing a growing interest from large multinationals.

Economic stability is essential for attracting significant inward investment; with Fiji having both low levels of inflation and positive GDP growth over the past years.

In fact, the Reserve Bank of Fiji recently announced that the economy has grown by 5.3% in 2014, exceeding earlier predictions of 4.5% which is a remarkable achievement, considering the stagnant conditions across the region and in larger economies like Australia (2.71%) and New Zealand (3.3%).

Fiji has a strong banking sector with the two largest banks ANZ and Westpac being in the Top 20 of the Global Financial World’s Safe Banks Index of 2014.

In May this year Standard & Poor’s raised its long-term sovereign credit rating for Fiji from B to B+, reflecting the stable economic outlook.

As part of improving the bilateral trade and investment climate, Fiji is offering a number of lucrative incentives, policies and duty concessions.

Fiji has a business friendly tax structure that supports innovation and investment with 20% corporate tax and a lower rate of 10% for companies listed on the South Pacific Stock Exchange.

In comparison, corporate tax rates in Papua New Guinea are set at 48%, India at 40%, Australia at 30% and New Zealand 28%, thus ranking Fiji amongst the most competitive nations.

Fiji has also established itself as the hub of the Pacific which allows investors to capitalise on much wider economic opportunities across the region.

Over the last 3 years China has become a major trade partner of Fiji.

Imports from China & Hong Kong have significantly increased from $439 million in 2012 to $612 million in 2013 and $734 million in 2014. Representing a Compound Annual Growth Rate of 18.7%.

During 2014 the majority of imports from China concerned Animal Products, Machinery, Textiles, Metals, Vehicles and Plastic Products.

Equally, exports to China have grown significantly reaching $167 million in 2014 compared to $91 million in 2013.

In 2014 exports to China primarily concerned Fish, Mineral Products in particular Bauxite and wood products mainly Woodchips.

Investment Fiji as statutory organization operates independently as the facilitation arm of the Fijian Government, providing services and assistance to promote, and stimulate investments and exports.

Investment Fiji carries out 3 primary roles of Investment Promotion, Investment Facilitation and Export Promotion which focus on identifying the ideal fit between the economic benefit of Fiji and the business opportunity for the investor; and enabling and assisting Investors to set up and grow, Issuing the Foreign Investment Registration Certificate and working with new and established exporters in up skilling and promoting their products & services overseas.

Since 2009 a total 234 Chinese Investment Projects were registered with Investment Fiji year to date.

Ladies and gentlemen, Chinese Investment Projects have increased from 4 in 2009 to 68 in 2014 achieving a CAGR of 60.35%.  Your presence here today is reflective of this growth and we hope to engage in more mutually beneficial projects over the coming years.

The number of projects registered over the years are primarily spread across Tourism, Services, Wholesale and Retail and Manufacturing. In 2014 a total 68 projects were registered at a proposed value of $250 million and an expected employment generation of 1,217.

There is a huge potential for investment opportunities in Tourism, Agriculture, Fishing, Manufacturing, ICT, Renewable Energy projects as well as Mining and Quarrying. As an investment promotion agency Investment Fiji is focused on promoting these sectors to potential investors through creation of sector profiles providing detailed information.

The Fijian Government recently launched two milestone initiatives, the Fijian Trade Policy Framework and “Single Window Clearance System”. The Fijian Trade Policy Framework is created to capitalize on the positive reforms that the Fijian government has already made in improving the general business environment and trade related infrastructure.

The “Single Window Clearance System” allows foreign investors to register their project in Fiji, irrespective of their physical location. The Single Window Clearance System for investment registration not only expedites the processing time, but it also allows for greater levels of transparency as investors are able track and monitor the progress of their applications across all agencies.

In terms of Chinese investors, we commend the growing interest in investment through fact finding and inbound missions.  A total 9 major inbound mission and multiple individual meetings have been facilitated by Investment Fiji this year alone. The Guangzhou Trade & Economic Cooperation Conference held in Suva this June attended by His Excellency Mr. Hu ChunHua, was both significant and successful.

Interest from Chinese investors has increased over the years and it is imperative that Chinese investors obtain a strong understanding of the policies in relation to investment approvals. Investment Fiji in its capacity as the investment arm of the Government has already created promotional videos in Chinese to assist Chinese investors in understanding the investment climate in Fiji.

 

 

 

 

Some of the Chinese companies that have invested in Fiji include Tengy Cement Limited, China Railway Group, Zinfa Aurum Limited and many others. 

 

 

 

 

 

 

Also Chinese companies have shown multiple interest in Government projects which reflects Chinese investors’ confidence in the Fijian business environment.

Tourism is increasingly becoming of significance both in terms of Chinese investments and tourists. Between 2010 and 2014, China’s visitor arrival to Fiji grew an average 13% annually, reaching 27,000 in 2014 and poised to grow a further 9% this year exceeding 30,000.

This year was monumental as it marked the first Charter flight from China during Chinese New year celebrations. This increased visitor arrivals by an additional 546 visitors! Boosting business during Fiji’s main trough season.

China’s visitor arrivals to Fiji has peaked during the main holidays of: Chinese New Year (Feb), Summer Holidays (July) and Golden Week (October).

This year, Tourism Fiji ran tactical activities in China targeting the March to June period.  Based on visitor arrival numbers, arrivals from China between April and June 2015, compared to the same period last year had increased a significant 70.5%.

Since the first charter flight from China, we have been inundated with charter proposals from other airlines in China to also operate direct flights and have since carefully reviewed them in consideration of the best sustainable approach for the Country.

According to Fiji’s Bureau of statistics, earnings from Chinese tourists for Q1 of this year increased by 30% contributing a total of $13 million as compared to $10.5 million in the corresponding period the previous year.

Earnings from Chinese tourists for Q2 of this year also witnessed a positive growth of 4% compared to the same period last year. These indications are testament to Tourism Fiji’s strategy of targeting higher revenue yielding visitors to Fiji.

 

 

 

 

Looking ahead, 2016 is set to be an even bigger year for Chinese tourists with Rosie Holidays chartering 4 flights for Chinese New Year: 2 from Shanghai and 2 from Beijing. 

 

 

 

 

 

 

In addition, there’s a high likelihood that Fiji Airways will be adding an additional flight from Hong Kong in 2016, increasing the frequency to 5 times a week. This is great news for the travel suppliers from China because the dates now become more flexible for packaging.

Tourism Fiji focuses on target segments that will stay longer and yield higher revenue for Fiji, and will be concentrating on developing 2 key niches: Dive and Luxury experiences.

As I close, I would like to reiterate that Investment Fiji is closely working with investors on After-Care support services to maximize the long-term benefits from inward investment and that Investment Fiji is striving to maintain and improve the trade and investment relationship with Chinese investors.


Thank you very much

 

***** ENDS****