The decision to export can often be a daunting one for Australian SMEs. However, with the right advice and appropriate planning, there are exciting opportunities to explore in certain export markets.
One such market is China.
Australia has an excellent economic relationship with China, and with its growing economy and rising middle class, it is an obvious destination for many Australian SME exporters.
While the Chinese economy has experienced a structural slowdown over the previous 12 months, it is still a promising export market for a number of Australian sectors.
Opportunities in China
China offers strong opportunities for Australia’s agriculture industry. China is the largest importer of Australian agricultural produce – a relationship that was worth $8.5 billion to our agriculture industry in 2014 alone.
Strong population growth and rising per capita incomes are continuing to drive growth in demand for Australia’s agricultural products. In particular, dairy and live cattle are becoming increasingly important market segments.
The Australian services sector is also well-placed to take advantage of the opportunities in China. The growing Chinese middle class is driving demand for services such as education, with Chinese students already one of the largest foreign student groups who travel to Australia to study.
In addition to education, an ageing population is also creating an attractive market for aged care.
How to take advantage of export opportunities
Identifying export opportunities in a country like China is just one step in any export journey. Once you have identified the specific opportunities for your business, there are a number of steps you can take to make the transition into the market as smooth as possible.
First, network with peers. Establishing strong networks is a great way to access valuable information and support, and many businesses overlook their existing relationships.
Once you have exhausted your existing relationships, organisations like the Australia China Business Council (ACBC) provide information programs and opportunities to help Australian businesses network with their peers.
The ACBC also hosts regular events with senior contacts within the Chinese Government. Another option is to attend events hosted by your industry association.
Second, take time to learn the business culture. It’s important to understand the local business culture to ensure you have an appreciation of the expectations of doing business in China.
In China, establishing strong relationships and trust is crucial before closing any deal – often this takes places over a series of lunches and dinners. Another tip that SMEs often overlook is that it is really useful to have business cards printed in Chinese.
Third, all Australian SMEs should consider meeting with a trade adviser. Austrade, the Australian Government’s trade and investment agency, has 11 offices in China.
Austrade’s trade advisers and other export services are available to Australian companies looking to grow their business in China and connect with potential partners.
Finally, seek advice. As with any business venture, receiving good quality legal, tax and professional advice is critical before making important decisions.
For example, when operating in China it is advisable to use a legal firm with a local presence to ensure you are complying with regulations and laws. They can also highlight any contract issues and be able to help if you are concerned about protecting your intellectual property.
An exciting market for Australian SMEs
China offers excellent opportunities for Australian SMEs across a range of sectors, including mining, agriculture and services.
As with all export decisions, getting the right information and making the right connections can be difficult.
However, following the steps outlined here should help your business overcome the export barriers and establish an export business in China.
Andrew Watson is the Executive Director, Export Finance, Efic