Time to deepen China ties

We need to talk up our strengths and engage with Beijing.

Coal exports to China are as importatn as ever. Picture: AFP

In the midst of such global uncertainty — just for starters, Bob Gottliebsen in this paper a couple of days ago cited the US shutdown, the US-China trade war and Brexit — it’s getting ever more important for Australia to do its darnedest to deepen the appetite for its goods and services.

The base remains surprisingly strong. The latest trade statistics show our export revenues running at 21 per cent above those of a year ago.

Of course, the 5 per cent slide in the value of the dollar against the greenback has helped exporters.

But our most important asset is our dependability, our trustworthiness, as a supplier of quality products and services.

Japan, South Korea, Malaysia, Taiwan and Singapore have all boosted their purchases from Australia significantly.

China’s increased appetite is especially crucial, with iron ore and coal sales leading the way no less than during the mining boom.

Now that online sales are so significant in China, there’s a temptation for our businesses to retreat from engagement, in the belief that it’s enough to place their products on a boat and entrust their distribution to Alibaba, Tencent and JD.

The magic of the daigou channel takes that a step further — where it may seem unnecessary even to make any purposeful ­arrangement to export, where just making products available in Australia to Chinese buyers capable of carving out a margin on top of Australian retailers’ cut seems ­sufficient.

The truth is, building durable consumer appeal requires the ­creation of brand awareness, and constantly refreshing and reanimating that appeal, built on reliability.

As, five years ago, the prospect seemed likely that the resources bonanza would start to fade (it hasn’t entirely for Australia, with our products displacing those sourced from elsewhere, including domestically within China), the government developed via Austrade a new campaign.

This was Australia Week In China, during which a thousand or more Australian businesspeople flew to different parts of the country, engaged with Chinese counterparts, and assessed opportunities to start trading or investing, or else to work with Chinese companies back in Australia.

It proved a big success, attracting attention within Chinese business circles — though the quantum of the outcomes of such events is always difficult to assess, and often misleading.

Two years later, in 2016, a second AWIC attracted even more participants.

Last year, it didn’t happen. One can put that down chiefly to three matters. First, the temporary awkwardness of the relationship, as Beijing became concerned about official moves to constrain influence-building efforts in Australia, and about the frankness of the public debate in Australia about its role here.

Second, the overriding focus and concern in Beijing about the US relationship. Third, the massive importance attached by leader Xi Jinping to the inaugural Import Expo in Shanghai. A more minor element is that Austrade itself has, in the nature of churn in such outfits, lost some of its China expertise.

Trade Minister Simon Birmingham told Sky News’s David Speers during that expo in November that “this is essentially our AWIC presence this year, and the scale of Australian participation demonstrates that”.

Now, he said, the government would consider options, whether an AWIC or “a different type of format that piggybacks off of this event, off of the annual AFL match that’s now going to be committed over the next few years, or a series of different trading missions”.

Whatever it is, he said, it mustn’t be primarily about garnering media attention back in Australia but about “ensuring that the businesses who are participating get the best commercial bang for their buck”.

Another model that’s well worth examining is G’Day USA, “where the US and Australia meet”. Now in its 16th year, this durable format involves events and people in business, culture, sport and the intellectual world.

It succeeds in attracting virtually the entire Australian elite, along with a hearty chunk of America’s. Actors such as John Travolta are ubiquitous at G’Day USA gala events, at one of which I bumped into an extraordinarily courteous and effervescent figure who gave me his business card, with the appropriately illustrated title “Rocket Man”: Buzz Aldrin.

Current Aussie “champions” of the event include actors Rachel Griffiths and Hugh Jackman, former Dow Chemical boss Andrew Liveris, Village Roadshow CEO Greg Basser, former swimmer Andrew Thorpe and News Corp CEO Robert Thomson.

Building a buzz around “G’Day BJ”, as Beijing is sometimes known, would be a considerable challenge given the deep cultural and political chasm between our countries, compared with the linkages between Australia and America. But even a modest success for such an audacious project would place us potentially ahead of our competitors, and would potentially do much to deepen demand for our goods and services.

There’s already a surprising appetite for Australia as a place conjuring thoughts of more than tour bus rides to Bondi or iron ore shipments.

Australian Writers Week attracts big crowds to venues across China to listen to prominent figures such as Tom Keneally, Alexis Wright and Richard Flanagan. Our orchestras and ballet companies regularly fill halls there — Queensland Ballet in November, for instance, under its artistic director Li Cunxin. And 39 institutes of Australian studies are flourishing at Chinese universities.

The Australia Council drives considerable cultural exchange with its modest resources. But creating the kind of impact on a country the size of China that will drive more customers our way, and will retain their loyalty even as the economy takes a slide, requires the support of substantial sponsors and an energetic secretariat.

Andrew Hunter, the general manager of China engagement at AFL club Port Adelaide, is one of many smart younger Australians who’d love to get involved in such a venture. He has learned much from helping set up the club’s regular Shanghai games. “Sport is a great way to balance formal business relationships, particularly with the Chinese,” he says.

He points out that “in business meetings in China, you tend to sit opposite your counterpart at the centre of a long, rectangular table. But if you go to a game of footy together, you sit next to each other. Sporting interactions are therefore fantastic complements to more serious business meetings. It is Australia’s equivalent of a Chinese banquet, of a Japanese nomikai (drink after work), or breaking the bread in Arabia.”

The narrower the engagement with China, the more vulnerable it is to political pressure. Business will be a prime beneficiary from building a broader sense among Chinese of the great, diverse nation of Australia, and what we can offer in many spheres.

We have seen how despite official Chinese efforts to warn parents against sending their children as students during the “influence” debate, numbers held up — as did Chinese investments, tourists and sales of our resources — because of intrinsic demand.

Let’s work to underwrite that appeal, purposefully.