Below trend growth to continue
China’s rapid industrialisation over the past few decades has provided considerable economic benefit for Australia – as a strong increase in trade and investment has increased the integration between the two countries, even before the recently negotiated free trade agreement.
Australia’s relationship with China needs to mature as its growth model evolves.
China’s rapid industrialisation over the past few decades has provided considerable economic benefit for Australia – as a strong increase in trade and investment has increased the integration between the two countries, even before the recently negotiated free trade agreement. Between 1995 and 2011, the contribution of direct trade with China rose continuously, contributing in excess of 5.5% of Australian GDP in 2011 (University of Sydney).
A new report, co-produced by the Australia China Business Council (ACBC) and the University of Sydney, sponsored by National Australia Bank, highlights the significant benefits to Australian households and businesses from the closer relationship with China.
China’s evolution, driven in part by rising incomes and wealth in the emerging middle class, provides significant opportunities for Australian businesses – particularly in areas like food (both in terms of quality and security), tourism and education. The ACBC report notes that only around five per cent of Australia’s exports to China are directed to consumer markets, a ratio that is well below other trading partners. The report also notes that despite the opportunities for growth, reaching these potential customers will require new approaches and engagement with Chinese business partners
The evolution of China’s growth model means a less resources-intensive export profile for Australia in the longer term. Among other recommendations, the ACBC urge Australian businesses to become more deeply engaged with China’s consumer markets and contribute to China’s value chains as well as partnering with Chinese firms to expand opportunities in services.
For further details, please see the attached document.
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