China Remains a Top Priority for Australian Firms丨Multinationals on China
17:23
SFCCorrespondentZhengQingting,InternFanShuqinginBeijing
Despiteglobaluncertainties,ChinacontinuestobealeadinginvestmentdestinationforAustraliancompanies,accordingtothelatestfindingsfromtheChina-AustraliaChamberofCommerce(AustChamChina).The2025DoingBusinessinChina(DBIC)Reportrevealsthatnearly70%ofAustralianfirmsrankChinaamongtheirtopthreeglobalinvestmentprioritiesoverthenextthreeyears,underscoringsustainedconfidenceintheChinesemarket.
Thereporthighlightsasignificantreboundinprofitability,withover75%offoreignfirmsreportingprofitsin2024,upfrom58%in2023.Additionally,51%ofrespondentsrecordedyear-on-yearrevenuegrowth,reflectingChina'srobusteconomicscaleanditsleadershipininnovation.TheseresultsunderscoreChina'scriticalroleasahubforgloballycompetitive,future-focusedindustries.
VaughnBarber,chairofAustChamChina,emphasizedinaninterviewwithSFCthatconfidenceinChinaremainsstrong,withthreeoutoffourforeignfirmsrankingitamongtheirtopthreeglobalinvestmentdestinationsoverthenextthreeyears.
TheDBICReportalsoidentifiesemergingopportunitiesforAustralianbusinessesinsectorssuchasresources,agribusiness,andgreensupplychains.Notably,cleanenergytechnologies,electricvehicles,andcriticalmineralsarehighlightedasareaswithsignificantgrowthpotential,aligningwithbothAustralianandChinesestrategicpriorities.
Lookingahead,thereportsuggeststhatAustralianfirmsarerecalibratingtheirstrategiestodeepenengagementintheChinesemarket.Thisincludesbuildinglocalpartnerships,expandingintonewcitiesandregions,andinvestingingovernmentaffairsteamstonavigatetheevolvingregulatorylandscape.Thesestrategicshiftsindicateamovetowardsmoreintegratedandvalue-drivenbusinessmodelsinChina.
SFCMarketsandFinance:Thisyearmarksthe10thanniversaryoftheChina-AustraliaFreeTradeAgreement(ChAFTA).Howwouldyouassessitsimpactonbilateraleconomicandtraderelationsoverthepastdecade?
VaughnBarber:In2015,thebilateraltradevolumebetweenAustraliaandChinawasnearly$145billion.Thisyear,itisforecasttoreach$325billion,representinganincreaseofapproximately125%,agrowthratesignificantlyfasterthanAustralia'stradewithotherglobalpartners.Thisgrowthhasbeensupportedbytariffrelief,improvedmarketaccess,andenhancedtraderesiliencebetweenthetwonations.
Reflectingonthe10thanniversaryoftheAustralia-ChinaFreeTradeAgreement,IrecallbeinginBeijingduringthecelebrations,wherethethen-TradeMinisterengagedwiththecommunitytomarkthismilestone.Thisagreementwasamongthefirstcomprehensivefreetradeagreementswithmajoreconomies.Onthis10thanniversary,it’sanopportunemomenttonotonlycelebratepastsuccessesbutalsotoconsiderhowthisfoundationcandrivethenextphaseofcollaborationbetweenChinaandAustralia,focusingonfuture-orientedindustriesthatalignwiththestrategicprioritiesofbothcountries.
SFCMarketsandFinance:In2024,Chinagraduallyliftedtraderestrictionsonproductslikewine,barley,andlobsterfromAustraliathroughconsultations.HowhavethesedevelopmentscreatedgrowthopportunitiesfortherespectiveAustralianindustries?
VaughnBarber:Theeasingoftraderestrictions,theremovalofimpediments,andtheimprovementinbilateralrelationshavegivenarealinjectionofconfidencetobusinessesinthesectorsaffectedbythetradebarrierswe’veseen.We’veseenastrongrebound,particularlyinwineandmorebroadlyacrossagriculture.DemandforAustralianproductsremainssolidduetotheirreputationforqualityandsafety.
Thatsaid,wearen’timmunetotheglobalbackdrop—commoditypricesarefluctuating,anddemandinChinaforsomeAustralianexportsissoftening.Butoverall,thesituationishealthy.U.S.–ChinatradetensionsareinfluencingAustralia’sexports.Interestingly,ChinesebuyerssourcingfromalternativesuppliersareincreasinglyturningtoAustralia—particularlyinagriculture—becauseofourtrustedqualityandfoodsafetystandards.
Ourreporthighlightsnewexportopportunitiesbeyondtraditionalcooperationareas,suchascriticalminerals,clean?energytechnologies,LNG,andpharmaceuticalsandmedicaldevices—allalignedwithbothcountries’priorities.AparticularlynoticeabletrendistheemergenceofAustralianinvestmentopportunitiesinChineseagribusiness,cleanenergy,andfoodandbeverage(F&B)—afascinatingdevelopment.
WesurveyedbothAustralianandChinesecompanies,andbothsidesidentifiedopportunitiesintheseareas.Thismarksanewtrendtowardadeeperlevelofengagement—beyondmereexporting—tocreatingvaluetogetherintheChinesemarket.
SFCMarketsandFinance:WhatisyourperspectiveontheopportunitiesandchallengesfacingAustralianagriculturalexportstotheChinesemarket?
VaughnBarber:SoIthinktheoutlookispositive.IwasinShanghairecentlyforSIALandspentalotoftimeinthemeatpavilion,whereIbelieveAustralianproducersareworkinghardtokeepupwithdemandforqualityAustralianredmeat.We’vealsohadapprovalfor—Ithink—15newlambproductionfacilities,andImetwithgoat?meatproducersaswell.
Ithinkit’simportantforcompaniestostayconnectedtothemarket,adapttoconsumertrends,fullyutilizee?commerce,andtakeadvantageofadvancedcold?supplychainsinplace.However,it’sunrealistictoexpectAustralianproducerstobeinsulatedfrombroadershiftsinconsumerdemand;theyneedtorespondaccordingly.
Takewine,forexample:exportvalueisupsignificantlyevenasvolumehasfallen.ThatreflectsatrendtowardpremiumizationinAsianconsumptionandshiftsinthedomesticmarket.Australianexportersandproducersneedtoadapttothat.
Butoverall—asyousaid—theexpandingChinesemiddleclassgivesmeoptimismaboutunderlyingdemandandconfidenceinAustralianproducers'commitmenttomeetit.
SFCMarketsandFinance:Recently,PrimeMinisterAlbanesedescribedtheU.S.decisiontoraisesteelandaluminumtariffsto50%asanactof'economicself-harm.HowdoyouviewthedirectandindirectimpactsofU.S.tariffincreasesontheAustralianeconomy?
VaughnBarber:TheUStariffpoliciesaredisruptingglobaltrade—drivingupcosts,increasinguncertainty,andimpactingsupply.That’snotsomethingAustraliancompanieswanttosee.Lookingspecificallyattheimpactonexporters,AustralianbusinessesareaffectedbytariffsonexportstotheUSand,asImentionedbefore,thereareopportunitiesforAustraliansupplierstopotentiallyfillthedemanddisplacedbyretaliatorytariffs.
Atthesametime,theymustconsidertheimpactonthird-countrymarketswheretheycompetewithUSsuppliers.Forexample,asUSexportsaresqueezedoutoftheChinesemarket,theymayshiftwithincreasedintensityintoothermarketslikeJapan—creatingdirectcompetitionforAustralianproducersandexporters.
It’sacomplexdisruptiontotradeflowsandcertainlynotwhatAustraliancompanieswouldprefer.Buttherealityisthattheyneedtobeagile.Oneapproachhighlightedinourreportisthatthey'redeepeninglocal,in-countrypartnershipstobetterunderstandandrespondtoemergingopportunitiesandevolvingregulatoryenvironments.
SFCMarketsandFinance:MightthissituationpromptAustraliatoplacegreateremphasisonitstraderelationshipwithChina?
VaughnBarber:I’moptimisticaboutthemedium-andlong-termoutlookbecauseoftheunderlyingcomplementarityofoureconomies.Asthereportlaunchingtodayshows,almost70%ofcompaniesidentifyChinaastheirtopmarket—oroneoftheirtopthreeinternationalmarkets.ThesurveyresultsspeakloudlytothededicationofAustraliancompanies,evenamidconsiderableglobalcomplexityanduncertainty.
SFCMarketsandFinance:You'vementionedthatAustralia-Chinaeconomicrelationsareenteringanewphasecharacterizedbyinnovation,highaddedvalue,andgreen,low-carbondevelopment.Howdoyouperceivethecomplementaritiesbetweenthetwoeconomiesinthisnewstage?Arethereemergingsectorsthatpresentpromisinginvestmentopportunities?
VaughnBarber:ThereporthighlightsseveralsectorswhereAustraliaandChinaarestronglyaligned.
First,agricultureandfood&beverage—keystrengthsforAustralia,underpinnedbyitsreputationforsafety,quality,andreliability.AsImentioned,thereisstronginterestfromAustraliancompaniesinvestinginChinainareaslikeagriculturalsupply-chaininnovation,localproductionpartnershipstobettermeetevolvingconsumerdemand,andsupportfood?securitygoals.
Second,cleanenergyisatoppriority:bothChineseandinternationalfirmsrankitamongtheleadingsectorsfortwo?waytrade,investment,andcollaboration.Therearerealopportunitiesforjointworkongreenhydrogen,renewableenergytechnologies,andenergystorage—whereAustralia'sresourcesandinnovationcancombinewithChina'smanufacturingandtechnologystrengths.
Third,biopharmaceuticalsandmedicaldevicesfeatureprominently.Oneofourpaneliststodayisfromamedtechinnovationfirm.There'srealscopeforinnovationinthisfieldtomeetChineseconsumers'evolvingneedsandexpectations.
Thisshift—fromatraditional,commodities?basedtradingrelationshiptoonethatismorestrategic,innovation?driven,andeconomicallycomplementary—isemblematicofthebroadertrendnotedinthereport.
SFCMarketsandFinance:Thereportalsoindicatesthattheelectricvehiclesectorhashugepotential.Whatdoyouthinkisthedirectionoffuturecooperationinthissector?
VaughnBarber:Renewableenergyandtheelectric-vehiclevaluechain—andbatteriesaspartofthatvaluechain—arekeyareaswhereChina’ssupplycapabilitiesalignwellwithAustralia’sneeds.Forexample,attheCCPITGlobalTradeandInvestmentPromotionSummitlastyear,IemphasizedthatAustraliawelcomesChineseelectricvehicles.Wedon’thavedomesticcarmanufacturing,andourconsumerswantfunctional,good?value,affordablesolutions.Asofayearlater,ChineseEVsareindeeddeliveringstrongperformance.
WhenIreturnedhomearoundChristmas,severalfriendstoldmetheyplannedtotradeintheircarsforChineseEVs.ThatillustratesanopportunityforcollaborationbetweenAustraliaandChinaacrossthesurroundingvaluechain.TheAustraliangovernmenthasalreadyannouncedtheFutureMadeinAustraliainitiative.ProspectiveChineseinvestorscannowaligntheirproposalsintherenewable?energyvaluechainwithobjectiveslikeboostinglocalproduction,improvingsovereigncapability,andcreatingnew?economyjobs.Thistrendisclearlygainingmomentum.
SFCMarketsandFinance:CouldyousharehowAustralianbusinessesviewChina'seconomicoutlookandmarketattractiveness?
VaughnBarber:ThereportpaintsacompellingpictureofrenewedconfidenceandastrategicrecalibrationamongAustraliancompaniesintheirapproachtotheChinamarket.Nearly70%ofmultinationalfirmsselectedChinaastheirtop—oroneoftheirtopthree—globalinvestmentdestinations.
Thisissupportedbyperformancedata.In2024,75%ofrespondentsreportedprofitability,upfrom58%theyearbefore.Overhalfrecordedyear-on-yeargrowth,comparedto51%previously.46%talkedaboutincreasedinvestmentcomparedtotheprio内容ryear.TheseresultshighlightwhyAustraliancompaniesremaincautiouslyoptimisticaboutChina’sprospects.
AparticularlyinterestingfindinginthereportishowfirmsareadjustingtheirengagementstrategyintheChinamarket:
Buildinglocalpartnerships—Thisapproachhelpsfirmsbetterunderstandandrespondtoevolvingpolicytrendsandconsumerdemand,whilemakingtheirbusinessmodelsmorelocallyrelevant.
Geographicexpansion—One-thirdofrespondentsplantoexpandintonewcitiesandregionsoverthenextthreeyears.BeyondBeijingandShanghai,thetopfourtargetedareasareShenzhen,Hangzhou,Chengdu,andHainan—eachofferinguniquepolicyincentivesandcostadvantages.
Investmentingovernmentaffairsteams—There’sagrowingrecognitionthatlong-termsuccessinChinadependsonconstructiveengagementwithgovernmentandregulatorybodies,enablingcompaniestonavigatepolicyshiftsandalignwithChina’sstrategicpriorities.
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Reporter:ZhengQingting,InternFanShuqing,YulaiYang
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