AUSTRALIAN companies that set up offices in Hongkong are more likely to be successful in investing in China than those dealing direct with China from the outset, the Mayor of Zhuhai, Liang Guangda, said yesterday. Mr Liang, who said Australian companies were behind other foreign investors in Zhuhai, said dealing through Hongkong would be easier and provide more understanding of the Chinese way of doing business. But it was advisable for foreign companies to complement that arrangement with offices in Chinese capital cities, he said. ''If Australians can both set up offices in Hongkong and get more involved in doing business with China that would be more beneficial,'' he said. ''By setting up offices in Hongkong it will be easier for Australian business people to get a better understanding and more comprehensive impression of China,'' he said. Mr Liang, Guangdong representative on the Central Committee, is in Australia with a 10-member Zhuhai delegation to address the South China Forum, a series of briefings on the region that began in Melbourne yesterday and continue in Sydney and Brisbane next week. He is keen to encourage Australian investment in Zhuhai. His delegation brought details of two dozen projects, including transport, communication and energy ventures in which foreign investment is sought. Mr Liang was quick to reassure the more than 100 forum participants that the Zhuhai economy is not overheating: ''The economic developmentis not overheating because all this development is based on our own resources and our own effort''. In a detailed address on Zhuhai's investment advantages, Mr Liang said: ''Zhuhai's economic development is channelled along a clear direction with our economic structure being rationally adjusted, our science and technology rapidly advancing and our economic performance steadily improving.'' ''As a result our economic indicators have improved by a great margin after years of rapid growth,'' he said. ''In comparison with 1979, when Zhuhai city was built, our resident population has increased by 50 per cent, income has amplified 31 times, social production output value increased by 31.8 times, industrial and agricultural output value grew by 51 times,export value rose by 101.5 times and the year-end savings deposits expanded by 132 times. ''Some people may wonder whether this speed is too fast and the economy is overheated. But we are not worried for we know that this growth rate is based on a virtuous cycle of our own funds, rational utilisation of resources, continuous optimising of economic structure, giving top priority to scientific and technological progress and improving management and economic performance.'' ''Therefore it is a solid and realistic speed and it reflects the improvement of the overall performance of our economy.'' Mr Liang said there were about nine Australian projects that had begun in Zhuhai, or had contracts or letters of intent signed. They included a Foster's brewery joint venture and ground services for the new airport. ''Also we are negotiating with an Australian party on the building of a 100,000-tonne dock for coal and we are considering buying coal from Australia,'' he said. But Australia was still behind the US, Canada, Belgium, Singapore, Korea and Japan in its investments there and Australian companies lacked knowledge of Chinese business practices. Mr Jonathan Mott, managing partner with legal firm Gadens Ridgeway, one of the forum sponsors, said Australian companies were realising they had missed out on China investment opportunities and were keen to fill their ''knowledge gap'' and catch up. ''Australian companies have grown up fairly quickly, sometimes by bitter experience,'' he said, referring to the number of Australian companies who have been unsuccessful in China because they were ill-prepared.
