An interview by Neil Glaser with Si Tao Xu, Deloitte China Chief Economist. For CFOs to stay well ahead of growing challenges and demands, it’s important to lift the gaze and look regionally and globally, to see what trends emerge. We sat down with Si Tao Xu, Deloitte China’s Chief Economist and put China, trends and the economy under the CFO spotlight. What is your perspective on the level of optimism of Australian CFOs when it comes to the Chinese economy? Of course Australia is benefiting hugely from China’s economic take-off, and we have seen that Australia has had an impressive 26 consecutive years of economic expansion. All leaders need to continuously reflect on the changing landscape and realise that there are challenges and also opportunities ahead. It’s important to monitor and recognise the pace of China’s continued path of economic transformation. When it comes to an optimistic viewpoint, there are significant opportunities for Australia to play a bigger role around agriculture and tourism – when it comes to leveraging China’s economic expansion. This could see a move beyond hard commodities. Attention to detail across a diversity of issues is critical for CFOs of today. What should they know? Having the right insights ensures that you are more informed when it comes to decision making. I think that when it comes to CFOs in Australia, if they continue to research and understand the Chinese economy even slightly better than their competitors, they will have a competitive advantage. Looking at the Australian interest rates and the exchange rates between the US and Australia, coupled with the housing market and tourism landscape, China is playing a very important role. I also think that it is important for CFOs in China and CFOs in Australia to learn from each other – while the priorities of each might be different, there are opportunities for sharing best practice and learnings around tackling issues. What current developments should every CFO within Australia know about China? It’s very important for CFOs to understand the broad economic trends that are happening across China. Essentially we are seeing a dichotomy unfold between the old economy and the new economy. From Australia’s perspective, it will be interesting to see what parts might be positively affected by China’s economic transformation. It’s also critical that CFOs in Australia take continued steps to really understand and explore Chinese consumers. This is not an easy task at times, even for Chinese researchers and businesses, because you are dealing with an up and coming younger generation who are changing the way in which we do business and the speed at which ideas are evolving. This sector might not have had memories of a cultural revolution and their perspective is increasingly optimistic. Whether such optimism can be sustained remains to be seen but it’s important that business leaders understand the nuances and motivations of this new technologically driven generation. Diversity is a key focus for many businesses. What should CFOs keep top of mind? Diversity of people and ideas and more is what is fuelling a changing landscape. It is important for CFOs to understand the diversity of China and across the region as a whole. There are millions of vibrant consumers ready to access and engage with new markets and opportunities. For readers out there who haven’t yet been to China I would strongly advise that they make China a firm destination on their agenda. It’s important to experience, see and explore up close and personal the rich diversity of places, people and businesses across the hustle and bustle of China. By doing this with no pre-determined notions or expectations, CFOs can gain immediate insights and perspectives on the cultural, corporate and captivating elements of China. One thing I can promise is that for those who have not been to China, a key takeaway will be the sheer speed and magnitude of change they see happening on a daily basis. When it comes to fuelling growth, how does digital fit in to Chinese economic narrative? Well, let’s talk e-commerce and numbers. As our Voice of Asia series has revealed, digital is certainly moving front and centre stage – driving business opportunities and accessibility. The younger Chinese generation are incredibly tech savvy, more willing to spend, and are encouraged to do so by the ease of e-commerce. For example, if you go to a local café, only approximately 3% of transactions might be occurring in cash, and that ratio continues to drop. With the continued emergence of FinTech companies and solutions, there are many opportunities to engage with consumers and the changing economic landscape of China – to fuel growth and productivity. That theme is going to be played out for many years.