China fuelling job growth, says Australia China Business Council

One in 58 jobs in Australia, almost 200,000 in total, is driven by direct exports to China, including in manufacturing, a survey shows.

China’s jobs influence

One in 58 jobs in Australia, almost 200,000 in total, is driven by direct exports to China, including in manufacturing, according to a survey by the Australia China Business Council and the National Australia Bank.

According to the report, launched by Foreign Minister Julie Bishop on Monday, two-way trade with China measured by its impact on each Australian household, rose by five times between 2009 and 2013, to $13,985.

The sectors where most jobs depend on China trade are mining (72,000), hotels and restaurants (38,000) and agriculture (18,000).

The ACBC said the survey showed that firms that do well in China, have a higher tendency to expand their Australian staff too.

It said that Chinese state-owned investors in Australia were changing the composition of their management teams “towards empowering local Australian staff and shifting the balance towards a larger proportion of local employees and fewer expatriates from China”.

It said that direct trade with China contributes 5.5 per cent to Australian GDP, double that of agriculture, forestry and fisheries.

The 200 ACBC member firms surveyed said their chief concerns about doing business in China were regulatory changes, administration, visa issues and intellectual property rights protection.

Other challenges rated above 50 per cent in importance included, in order from the greater concern, increased competition from Chinese firms, competition from foreign firms, China’s economic slowdown, and political risk.

But 90 per cent of the respondents viewed their outlook with China as optimistic: 76 per cent say the free-trade agreement, set to come into effect by October, will help them do business there.

The strongest support for the FTA came from transport and storage, agribusiness, finance and business services, real estate and mining.

The new ACBC national president, former Victorian premier and Huawei Australia director John Brumby, said that “increasingly firms in non-resource sectors are in the front line and hold the key to broader-based growth between China and Australia”.

“China’s economic rebalancing is generating greater demand for consumer goods, high-end manufacturing and services,” he said. “Australian goods and services, such as clean food, high value added manufacturing goods, tourism and education, are increasingly within the reach of China’s growing middle class.”

Even manufacturing exports are being increasingly bought by China, Mr Brumby said — growing almost 11 per cent over the last five years. Spiro Pappas, the NAB’s executive general manager for global institutional banking, said that “global value chains — where different stages of the production process are located across different countries — have traditionally been difficult for Australian businesses to infiltrate. “However, this research shows that existing relationships with Chinese partners are opening doors for Australians in previously untapped networks.”