Australian services sectors must adjust to changing Chinese economy
Australia’s services sectors are set to benefit from China’s changing economy, with the substantial growth of its middle class and the transition of its economy opening up significant new export opportunities, according to a newly released trade report by the Australia China Business Council.
The report, The Long Boom: What China’s Rebalancing means for Australia’s Future, was produced in conjunction with Monash University and the Australian Centre for Financial Services, and supported by professional services firm ShineWing Australia. It projects that Australia’s construction, healthcare, education, tourism and financial services sectors are set to significantly benefit from China’s rebalancing economy in the years to come.
Speaking at the launch of the report, the chair and president of the Australia China Business Council, the Honourable John Brumby, said the conclusions from this watershed research suggest that China will continue to be Australia’s largest trading partner, playing a significant part in the transformation of Australia’s own economy into the future.
However, Mr Brumby added that “the nature and composition of this relationship will dramatically change as the Chinese economy shifts from an investment-heavy, commodity-based economy to one driven by domestic consumption and service-led growth.
“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,” he said.
Professor Edward Buckingham, director of engagement at Monash Business School, said that over the past 15 years China has become Australia’s largest and most important trade partner, fuelled by its exceptional demand for commodities and resources.
“The transitioning of China’s economy has raised questions about how Australia will move on from the commodities boom,” Professor Buckingham added.
“Our analysis suggests that China’s future growth patterns will likely demand a much wider variety of goods and services from Australia than we have previously experienced, and that even a moderate increase in Chinese consumption growth could see up to 25 per cent of Australia’s services exports going to this market.
“Due the sheer size of China’s economy, and its presence as our largest trading partner, these changes will result in a major adjustment to the economic prosperity of Australia and the overall composition of the economy. This raises a number of important strategic questions that should be discussed,” he said.