The last decade has been dominated by China’s extraordinary demand for our iron ore and coal, but as China’s slowing growth takes Australia’s mining boom off the boil it is now time to reassess where the future opportunities lie – and how we position ourselves best to exploit them.

 

To many the answer is clear – opportunity lies at the intersection of the changes being brought about by China’s economic transformation and the capabilities of Australian business.

 

By 2020, Asia’s middle-class consumption – led by China – is predicted to more than double to $12 trillion, and the region will boast more middle-class consumers than the rest of the world combined.

 

This trend is already unleashing demand for everything from financial, business and legal services to education, tourism, transport and logistics, to food, wine and environmental and design services. In short, China’s emerging middle-class will demand more of our food, our services and our skill-set.

 

Last year Australia’s non-mining exports to China amounted to $5.6 billion – a big sum but dwarfed by mining exports of $44 billion. Therein lays the opportunity:  the potential for increasing the sale (export) of services to Asia, and in particular China, is unprecedented.

 

A recent report released by Asialink estimates that a small increase in the export of non-mining resources would add between $10 and $30 billion annual export revenue and between $60 billion to $120 billion to the Australian economy over the next decade.

 

Our ability to capture these growth opportunities will underpin Australia’s own economic transformation and define our role in the Asian region.

 

But capturing these opportunities will not be easy. The markets are developing rapidly and are highly competitive. That means for Australian firms to penetrate the China market they need to compete on something other than price. Success will be in part shaped by the ability of Australian businesses to adopt agile, adaptive business models. Equally we need a work-force that is culturally literate, willing to accept change and adapt to it.

But central to everything are the personal relationships and connections developed over time that build trust and underpin sustainable partnerships at all levels.

 

That is why AustCham Beijing was thrilled to host two sessions in Beijing recently for some of the 650 delegates accompanying Ted Baillieu, the Victorian Premier, on the super-business mission. For some this was a first visit, for others one of many visits, but resonating across the meetings was the excitement of developing personal connections that underpin a willingness to cooperate and partner for mutual benefit.

 

Though they may be harder to classify and record, these personal contacts will provide rewards as enduring as any we derive from the export of our coal and iron ore.

Panelists L-R: Pamela Hanrahan, The University of Melbourne, David Olsson, King & Wood Mallesons and AustCham Beijing Chairman, Stephen Joske, AustralianSuper.

 

AustCham’s mission is to assist Australian companies prepare for a future that will be markedly different from the present. Through our thought-leadership initiatives, our industry focus groups, our government relations outreach and our enhanced advocacy platform, AustChams around the country are helping members to better understand the factors that will influence our future and to equip them to exploit the opportunities that lie ahead.

 

I encourage members to talk to your directors and the Beijing secretariat team about ways in which we can support your business in China. For others visiting China for the first time, give us a call – and find out what the “AustCham difference” can do for you! ■

 

 

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