Aussies need to adapt

Report urges firms to better target China

AUSTRALIAN businesses must drop the mindset of selling just “rocks and crops” to China and develop an understanding of consumers in the world’s second-largest economy, a new report says.

China in future will demand a wider variety of goods and services from Australia than it has for the past decade, the report commissioned by the Australia China Business Council states. China has become Australia’s largest and most important trading partner because of its exceptional demand for commodities and resources over the past 15 years.

But its economy is changing from being investment-heavy and commodity-based, to being driven by domestic consumption and services, raising questions about how Australia can adapt after the commodities boom.

The new report, titled The Long Boom: What China’s Rebalancing means for Australia’s Future, was produced by Monash Business School’s Australian Centre for Financial Studies.

Monash University’s director of engagement, Professor Edward Buckingham, said even a moderate increase in Chinese consumption growth could see up to 25 per cent of Australia’s services exports going to the Chinese market.

But former Victorian premier and now Australia China Business Council president John Brumby said businesses must adapt, however.

“For Australian businesses to fully capture the opportunities of this historic shift, they will need to invest not only in developing an understanding of customer preferences in this market, but also in the skills and capabilities of their workforce best suited to the international arena,” Mr Brumby said.

Professional services firm ShineWing Australia, which was a sponsor of the report, said Australia’s focus on selling “rocks and crops” had largely insulated businesses from adapting their products to suit Chinese tastes.