China over breakfast
For many people it has been somewhat of a surprise to see the slowdown in Australia’s economy over the past 12 to 18 months – while ours, by comparison continues to perform well. By the time you read this those ‘parity parties’ may have already taken place. Although I wouldn’t put money on it. Exporters are hoping that the tough times across the Tasman will be short-lived – otherwise the impact on export revenues will become too big to ignore.
However, exporters that have managed to crack the China market, or have their sights set on it, should be pleased to know that the economy there, while on a slower growth trajectory than the heady ten to 12 percent years prior to the GFC, is still tracking along nicely at around six percent. That’s like another medium sized country economy being added every 12 months.
At a recent ExportNZ breakfast in Auckland, attendees were brought up to speed on the China opportunity by former ambassador to China, Karl Worker, and ex-trade commissioner Mike Arand, who are both optimistic about the future. That’s reassuring when you consider that China has now overtaken Australia as our biggest export market.
In a nutshell, Worker says China’s outlook is one of sustained long-term growth. China wants our goods and services; they see New Zealand as a positive trading partner and a highly desirable place to visit. There’s never been a better time to engage in the Chinese market, and in a high ‘value-added’ way.
Arand too, is full of optimism and points to the austerity and anti-corruption drive, the increasing awareness of food quality, the demand for healthier lifestyles, the rise of e-commerce, as just a few of the many factors working in our favour.
However, while the new administration is making the tough decisions, Arand reminded attendees that China is still a difficult market to engage with. Entry is hard, with its confusing regulations, costly supply chain and high margins.
His advice is to “get China fit”, and that’s based on the five P’s of Preparation, being Present, Persevering, finding the right Partners, and instilling that Passion for your brand.