This article is part of an ongoing ‘Asia Pacific Insights Series’, co-authored by Spring Wu, Julie Hong, Erica Kai, Yawen Zheng and Ellen Xie designed to give you quick and simple tips to access new markets and elevate your business.
While some businesses are still grappling with China’s trade tariffs and sanctions, the country continues to remain our biggest export market. With the recent unveiling of its five-year economic plan, China’s 14th, we expect to see more opportunities for Australian companies to provide the services and commodities in need.
While the trade war has created a level of disruption, China is still Australia’s largest two-way trading partner in goods and services. Even with bilateral tensions, the June 2020 trade figures tell us that China accounts for almost 49% of our traded good exports.
For service-based exports like international education, it is the only Australian export worth more than $10 billion annually and remains heavily reliant on the Chinese market. Prior to the pandemic, Education and Tourism were ranked as our Australia’s s fourth and fifth largest export services respectively. While global travel bans are in place, China’s focus on EdTech and online study is expected to provide some support to education exports.
Despite the ongoing tensions, China is one of our top five export destinations along with Japan, South Korea, India and Singapore.
What are the key takeaways for Australian companies from China’s 14th Five Year Plan?
- China will focus on sustainable growth. China is increasingly focused on high-quality growth, innovation, digital, domestic consumption, improved living standards and the environment. Further sustainable growth means there are more opportunities for Australia to align our targeted sectors and offshore investments.
- Innovation and technology will be a national strategic pillar. China aims to boost its technology capacity, targeting key industries such as AI, quantum information, integrated circuits, and biotech. This means there will be security, privacy, and geopolitical risks for Australian companies. To compete in these markets, Australian businesses need to understand these developments and the service requirements.
- Further market opening. The Five Year Plan calls for further market opening of China’s services sector by easing and removing market entry restrictions and improving industry regulations. This means there are potential investment opportunities in China’s financial market. Recent examples of successful financial market interconnections include Stock Connect, Bond Connect and Wealth Management Connect.
- Greater focus on the environment and carbon neutrality. China is aiming to achieve 3% reduction in energy consumption per unit of GDP growth. There will be risks to Australian coal exports as the demand for coal decreases but there will be new opportunities for suppliers of renewable energy solutions.
- Consumption and services will become the cornerstone of China’s economy. Australia is recognised for its high-quality premium products and services, so expect more opportunities for:
- Australian suppliers of health and well-being products and for aged care service providers.
- Destination tourism will become more competitive and there will be strong opportunities for sports engagement and sports science services.
- Urbanisation and mega-city regions to support economic growth. Urbanisation will drive construction, services, jobs growth, and higher levels of household disposable income. Rising household incomes will fuel demand for premium priced consumer goods and services. This means you should stay alert to emerging shifts and changes in consumer preferences.
Australia’s Modern Manufacturing Strategy
The Australia Government has introduced a number of initiatives to help Australian manufacturers compete on a global scale. The Modern Manufacturing Strategy has been set up to provide support to build new capabilities and grow all parts of our manufacturing sector.
Recent changes of the development program now focus on health security, stability and economic recovery. For manufacturers, there are growth opportunities in each of the National Manufacturing Priorities:
- Resources Technology & Critical Minerals Processing
- Food & Beverage
- Medical products
- Recycling & Clean Energy
There are three modern manufacturing initiative funding streams:
- The Manufacturing Integration Stream – Closed
- The Manufacturing Translation Stream – Closed
- The Manufacturing Collaboration Stream – Will be open in the future
Who can apply:
Any Australian individual, partnership, company, association, co-operative, statutory corporation or trust that has carried on export promotion activities during the year for which they seek an export grant can apply.
To be eligible, the business must have:
- income of not more than $50 million in the grant year
- incurred at least $15,000 of eligible expenses under the scheme (first-time applicants can combine two years’ expenses)
- principal status for the export business (some exceptions apply, such as non-profit export-focused industry bodies).
The business also must have promoted one of the following:
- the export of goods or most services
- inbound tourism
- the export of intellectual property and know-how
- conferences and events held in Australia
Other grants available for Australian businesses:
- Wine Export Grant (closed date: 02 May 2022)
- NSW Export Grant
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