China visit crucial to boosting Australia’s exports
This week I will lead the largest trade mission ever to leave our shores.
More than 1000 business leaders will join me for Australia Week in China 2016, promoting the best we have to offer in cities across the country.
We are committed to such a large showing because, whatever medium-term twists and turns the global economy may take, China will remain our largest export market for the foreseeable future.
And, regardless of exactly how soft China’s intended soft landing turns out to be, the China-Australia Free Trade Agreement will form the basis of a broader, more diverse commercial relationship for many years to come.
As readers of these pages will know, China’s sometimes bumpy transition from an investment-led, export-oriented economy to one based on consumption and services is preoccupying commentators everywhere.
As Minister for Trade and Investment, my job is to get on with preparing Australia for the new sources of growth this process will generate.
The changes under way in China will have important ramifications for our economy and we must act now to understand and shape them.
Australia Week in China is an important part of this process. It features an extensive program of events, meetings and site visits across agribusiness and premium food, financial services, health and aged care, urban sustainability and water management, education and tourism.
These are all sectors already benefiting from China’s transformation, and coupled with the improved access and tariff reductions the Coalition negotiated through ChAFTA, this process will continue.
In North Asia more broadly, similar agreements the Coalition concluded with Japan and South Korea mean Australian firms now have unmatched preferential access to three of our most important trading partners.
Together, these markets in 2014-15 accounted for 38 per cent of Australia’s total two-way goods and services trade, valued at an impressive $252 billion.
There is plenty of room for expansion, however, especially as China’s growing middle class fuels an appetite for the high-quality goods and services we can supply.
Importantly, there also is, and will continue to be, plenty of interest to invest in Australia to take advantage of the access we offer to supply these markets.
The forces underlying China’s shifting economy are vast in scale but linked, nevertheless, to changing habits and tastes at the level of individual consumers.
While the need for Australian resources will not disappear, increasing affluence across much of China is driving growth in demand for other exports like premium food and wine, health and beauty products, medical technology and a range of services. Tourism is one industry already showing the powerful impact of this.
Last year, the number of Chinese tourists visiting Australia in a 12-month period passed the one million mark for the first time, double the total of just five years ago.
Chinese tourists are now Australia’s biggest-spending visitors and their growing presence in cities and regions is driving a renewal of infrastructure and tourism jobs.
In the short time since ChAFTA came into force on December 20 last year, we have already seen early signs of gains in shipments of, for example, beef, cherries, wine, seafood and cosmetics.
The benefits of ChAFTA aren’t confined to goods though, it will benefit service industries too, including tourism.
Australian operators will, for example, be able to service China’s domestic travel market, through investing there, providing tours, accommodation and catering within China itself.
The AWIC program includes a series of events promoting Australia as a premium destination, including the official Chinese launch of Tourism Australia’s coastal and aquatic promotional campaign.
Among the delegates taking part in AWIC is Tripalocal, a Melbourne-based tourism start-up that has attracted early stage Chinese venture capital investment to grow its links with outbound travel platforms.
Tripalocal is a great example of an Australian company using innovation to develop new opportunities with China, a key theme of the AWIC program.
Innovation is a priority for China too. China is investing heavily in disruptive technology, seen as a central factor in its successful transition from a growth model based on infrastructure and manufactured exports.
The new approach includes strategic partnerships with global R&D and technology firms able to help fast-track its innovation agenda.
AWIC’s innovation stream includes around 100 universities, research bodies, funding organisations, start-ups and enabling companies.
Last year alone, China’s venture capitalists poured a record $37bn into start-ups, more than double the previous year. Cities like Beijing, Shenzhen, and Shanghai are emerging as global tech hubs, home to successful incubators and accelerators.
The Australian government has chosen the latter, Shanghai, as one of five locations for its Landing Pad program, part of the National Innovation and Science Agenda.
The Shanghai Landing Pad will place Australian start-ups in one of the city’s leading incubators, giving them unique access and exposure to China’s lively innovation and venture capital scene.
Visiting China has always been crucial to building stronger commercial partnerships, whatever the industry.
Today, it is also necessary in forming a proper understanding of the changes occurring there, and implications these have for Australian businesses and jobs.
And that is exactly what AWIC is all about.