China's spending spree on Australian goods and services

Release Date

02 August 2010

When the whole world seemed to be on trade deficits with China, Australia was on a trade surplus of USD14.5 billion with China from January to June 2010, based on the statistics from General Administration of Customs of China. Australia exported USD 26.1 billion worth of goods and services to China in the first half of this year, a 54.3% increase on the same period last year on top of a GFC-affected 5.4% annual growth in 2009. During the same period, Australia's export to global market increased by 3.4%. China obviously outperformed Australia's global export market by a huge margin.

China overtook Japan and became Australia's biggest trading partner in 2008. While the World Factory takes two thirds of Australia's iron ore export by value, some rich people of its 1.3 billion population are consuming Australia's quality lamb and Shiraz. China is the biggest buyer of Australian education and the fourth biggest overseas market of Australian tourism.

China's preference for Australian goods and services is partly due to the fact that Australia perfectly fits into China's need for resources on a large scale in the past 30 years and China's new rich and middle class' soaring purchasing capabilities. But Chinese's favourable perception of Australia is also a defining factor in facilitating Australian goods and services entering China. Australia and China are both in the Asia-Oceania region with similar time zones. There are neither historical issues nor major disputes between Australia and China. It is no wonder a recent survey by a Chinese website shows China ranks Australia as its 7th most reliable friend/ally, just next to a few socialist countries and China's long-term allies in Asia. Chinese also perceives Australia to be a green country with abundant quality natural resources and relaxing lifestyle. Hence Australia's products, especially lifestyle, sports and food and beverage related products and services, are perceived to be superior to our counterparts in most OECD countries.

Currently, China is at a stage of development where its rich people start to look at alternative lifestyles, moving business and social networking functions from karaoke rooms to golf courses and cocktail functions. Australian exporters have started seizing the trend to export life-style related products and services. The prospect for Australia's exports to China seems to be on smooth seas with favourable winds.

However, it is rarely a short and cheap journey to enter the Chinese market. Companies, especially those in consumer goods and the service sector, looking at seizing the opportunities in China need to carefully study Chinese regulations, understand Chinese consumer behaviour, develop a robust entry model and leverage Chinese expertise to enter the market successfully. All little things may make a big difference or a miracle in China.

By Sara Cheng, Manager Greater China, Australian Business International Trade Services.

If you need any assistance or require further information regarding business set-up in China, please contact Sara at or on 1800 505 529.

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