22 Dec FTA boosts Aussie appeal to Chinese
AS farm sector businesses look to ramp up sales overseas, the feedback from China suggests the new free trade agreement (FTA) has significantly boosted Chinese attitudes to Australian business opportunities.
About 97 per cent of Chinese company officials interviewed in a blind study by the Australia-China Relations Institute (ACRI) and the National Australia Bank (NAB) were “favourable” to doing business with Australians.
Australia rated as the most favoured country with which to conduct business according to the survey of 1000 Chinese business bosses.
Canada ran second (at 92pc), followed by Singapore, the UK, New Zealand and the US in sixth place.
The same executives regarded Australia (at 83pc) as the second most important nation to China economically, behind the US at 89pc.
In another unrelated study of 5000 NAB farm and agribusiness clients of all sizes, 42pc of those currently engaged in exporting expected business growth in the next three years, thanks largely to FTAs with China and other Asian neighbours, and the low Australian dollar.
Asia remained the top trade destination for 75pc of agribusinesses, followed by the Middle East (36pc) and Europe (32pc).
The bank noted farm sector businesses were increasingly sophisticated about their trade and export programs, with more customers seeking help with foreign currency strategies and looking to connect with potential overseas partners.
NAB agribusiness general manager, Khan Horne, told a Sydney trade and export forum agribusiness customers had grown more savvy about the risks and opportunities around exporting.
“Long gone are the days when exporting was viewed as something for the established players only,” Mr Horne said.
“We’re finding prospective exporters and those looking to expand their businesses are better informed on the practical side of trade and export.”
“Our bankers are referring ever higher volumes of queries to our Asia desk from businesses looking to fund growth and to build contacts in key export markets.”
He urged exporters and farmers to be confident and keep up their passion for building new market relationships, but to also keep in mind the need to diversify their export risk.
“It’s not just about East Asia. Look at the opportunities and performance of other countries such as the US and Middle East,” he said.
He also highlighted the need to be alert to the risks associated with getting paid and learning everything possible about the culture in export markets and the language.
NAB expected a declining Australian dollar to help drive agricultural export prices at least until the September quarter next year.
Last week’s the forum was told current NAB forecasts put the dollar at US70c by late 2016, lifting to US73c by the third quarter of 2017.
The ACRI report noted 73pc of the 580 Australian firms surveyed had an overall “favourable” to “very favourable” impression of China, but there were some notable concerns about doing business with Chinese firms with 16 rating their impression of China as unfavourable or very unfavourable.
Only half of the Australian businesses interviewed traded with China, compared with 90pc of the Chinese companies surveyed trading with Australia.
While 76pc of Chinese companies cited the China-Australia FTA as playing some role in their plans to focus more on Australia, back here only 35pc of companies attributed their intentions to this year’s deal to cut trade barriers.
Both Australian and Chinese firms identified manufacturing and wholesale trade as focal points for further engagement.
“It was very encouraging that they saw both the Chinese and Australian governments as being supportive of closer economic links,” said ACRI director and former NSW Premier, Bob Carr.
“I was struck by the strongly favourable attitudes of Chinese business leaders towards Australia.”
Andrew Marshall, Farm Weekly