Free Trade Agreements (FTAs) are just one piece of the puzzle when it comes to thriving in an increasingly globalised business environment. Over the past few months, the Australia – China Free Trade Agreement (CHAFTA) has given Queensland businesses extra incentive to pursue lucrative overseas markets. Many small to medium enterprises (SMEs) consider these FTAs useful, however, they don’t understand how they can be applied to their business. SMEs are also mystified on how to operate within a complex Chinese market.
It’s important to remember that SMEs are the backbone of the Australian economy, contributing to 70% of the workforce and making up more than 96% of total businesses in Australia.
China continues to be the top export destination for Queensland. Our expertise, professionalism and – of course – our geographic and time zone proximity mean Queensland businesses are well placed to take advantage of China’s ascendance.
So with its economic growth trajectory, rising middle class, and the large amount of media about China as one of Australia’s most important goods and services export markets; where do Queensland businesses get started?
Queensland businesses set to capitalise
In the next few months we will see an increase in industries that are in a prime position to capitalise on the opportunities such as tourism service providers, healthcare services including aged care and agribusiness in the areas of beef, diary, cotton, horticultural, and aquaculture. Key factors Queensland businesses need to consider include; identifying their unique selling points that differentiate them from their completion and where in the Chinese market your product or service stands the best chance of gaining traction.
CHAFTA – Changing the game for Australian business
The CHAFTA provides momentum and incentive to a number of industries. For example it has been seen as a game changer for the aquaculture industry. With demand for protein rich products on the rise in China, more markets will open up for Australian businesses who have the capability to meet this need.
This significant demand in aquaculture has been driven by a number of factors including:
• Cost competitive delivery of animal protein
• Potential for productivity opportunities
• The industry is still immature with potential for significant growth
• Established and effective biosecurity practises and onshore facilities.
Example: Australian Bay Lobster Producers
Australian Bay Lobster Producers (ABLP), established a long term strategy to develop a premium domestic and global market for lobster production. They achieved this by developing and commercialising their unique lobster growing system before signing the free trade agreement giving them a distinct competitive advantage. They now have access to leverage their unique knowledge and position to take advantage of China’s growing demand for protein.
Ensuring international expansion is right for your business
Queensland is uniquely positioned to be a significant leader in expanding our trade relationships with Asia. Like in any business negotiation, the key is finding deals where both sides benefit.
The only way to achieve that is to gain a genuine understanding of the drivers, motivations and culture of the people and companies we would seek to do business with.
Of course, each company needs to evaluate whether the activity suits its strategic plan, but with the help of international business specialists, enterprises may be able to seize some extraordinary opportunities.