Exporting to China under Rudd's leadership

SME Benefits

The new Government aims to provide Australian businesses, especially small to medium sized businesses and those in manufacturing, the services sector and regional areas, with the help they need to take their products and services to the world and to meet the challenges and competition of the global market place.

Labor sees potential for increasing exports in the manufacturing sector, particularly in elaborately transformed manufactures, and from the interface between the manufacturing and services sectors in areas such as design and the provision of expertise.

The Government is intent on achieving the best possible outcomes for the nation and for Australian business, particularly through multilateral structures. They believe there is an ongoing role for bilateral and regional agreements, especially where they are consistent with, and can contribute to multilateral outcomes.

The reinvigoration of Austrade and its programs, together with a new business advisory body, will make it more adaptable and responsive to business concerns and to new export opportunities.

Labor is committed to the expansion of a mutually beneficial trading relationship between countries. It believes we must diversify our export base to China and develop appropriate export policies to effectively compete. Labor supports a bilateral preferential trade agreement with China and is committed to establishing, through Austrade, an Australia-China Taskforce on Services Exports to identify impediments to the growth of service exports and service-enhanced manufacturing in the Chinese market.

Chris Gibbs Stewart, general manager, Australian Business International Trade Services, says that export opportunities to China, now our biggest trading partner, will expand. Currently around 4,000 Australian companies are trading with China who is a massive buyer of commodities such as iron ore, wool, cotton, copper, lead, and manganese ores.

Stewart says there are huge and diverse untapped trade opportunities for Australian products, services, and ‘know how’ in construction, engineering, environmental and town planning, medical, health and pharmacy services and technologies, telecommunications, lifestyle and leisure, food and beverages, luxury consumer products, architecture, design, logistics, legal, financial, business administration, tourism, education and training.

Stewart does recommend however that first time exporters get advice from professionals whose knowledge, contacts, and experience are critical in doing business with China successfully.

Doing business with China

1. Market entry strategies

Start small. China is a large and complex market so it is recommended that you initially establish yourself in one province, even one city. Once you understand the regulations and practices in that region you can begin to expand one region at a time.

2. Business culture

Be prepared for a very different business environment. All business relationships are established for the long term. Negotiations can seem slow at the beginning, as your potential partner gets to know you in order to determine whether you can both commit long-term. Visit the country and meet potential partners if you can. This will help you develop comfortable business relationships. Respect ceremonies such as giving gifts and hosting meals. These ceremonies, though they may appear casual, are traditionally very important and are still highly respected by the Chinese.

Appreciate that in China life is business and business is life. Chinese business people work long hours, and many social activities revolve around business networking. When establishing a relationship with a Chinese company it will not be unusual for them to request a meeting in the evening or on a weekend.

3. Research the company structure that best suits you.

Thoroughly consider the different market entry options before engaging China. There are several possibilities, including direct export, using a local distributor/agent, setting up a representative office, forming a co-operative joint venture (CJV) or equity joint venture (EJV) or establishing a wholly owned foreign enterprise (WOFE). The entry model right for your company depends on your corporate strategy, internal resources, normal industry practice, and the market situation.