Online retail sales grew strongly in October, following on from a rebound in September.
It’s not widely known that China’s a strong buyer of Australian manufactured goods. In fact, manufacturing is now the second largest Australian exporting sector to China behind resources. The Australia-China Trade Report highlights the trends in the manufacturing sector from 2009 - 2014.
NAB has proudly sponsored the 2014 Australia-China Trade Report which was developed by the University of Sydney and commissioned by the Australia China Business Council (ACBC). ACBC is one of Australia’s most respected industry bodies supporting business trade between Australia and China.
By combining desk research, case studies and a proprietary business survey of over 200 businesses that are already engaged with China, the report examines the benefits of the bi-lateral trade. This is the only report that quantifies the value Australia-China trade at a household level.
This excerpt from the report, examines manufacturing trade between the two countries.
In 2011, the export value of manufacturing was twice the size of agriculture, forestry and fishing. High value-added manufacturing exports complement Australian exports of metals and fabricated metals, which still dominate the sector.
Image: Australian non-resources exports in value-added terms to China – by industry, 1995 – 2011 (AUD million)
Manufacturing exports to China have grown consistently since 2002. Since 2009, Australian manufacturers have been able to respond to the rise in Chinese consumer demand in a success story that has been overshadowed by the much steeper rise in resources exports. All manufacturing sub-sectors, with the exception of textiles and textile products, have shown growing export volumes to China in recent years.
Image: Australian manufacturing exports to China by subsector, 1995 – 2011
Australian manufacturers depend increasingly on China as one of their three major export destinations in an overall slowing export market and at a time when domestic demand is shifting from manufactured goods to services. China has thus become a crucial growth market for Australian manufacturers.
Image: Australian manufacturing exports (AUD billion)
Survey findings taken as part of the Report highlighted the positive outlook for Australian manufacturers doing business with China and the opportunities for Australian high value-added manufactured products, while acknowledging some of the constraints. Some of the key findings coming out of the survey were:
The increase in manufactured exports to China is set to continue. Chinese producers are in-sourcing an increasing proportion of inputs from global markets. China will continue to need high value-added manufactured goods, including those that build upon Australian advantages such as specialised mining equipment and R&D intensive parts and components. The challenge for Australian exporters will be to identify niche markets and to safeguard intellectual property rights while working closely with Chinese partners. Australian manufacturers are concerned about the risks they are facing in this regard.
NAB Sponsored 2014 Australia-China Trade Report Commissioned by The Australia China Business Council (ACBC). Pages 20 – 30.
© National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686.