The NSW Government's China Strategy, published in September 2014, highlights the potential to increase agriculture exports to China and may offer some support to farmers wishing to explore these new markets.
The Strategy identifies as highly prospective areas:
- grains and cotton cropping, especially barley, sorghum and soy;
- red meat production;
- healthy foods such as macadamias, cherries, blueberries, table grapes and citrus;
- technology transfer in research in aquaculture, water management and soil fertility;
- and dairy, particularly fresh and UHT drinking milk and infant milk formula
The scale of demand and potential returns from China are stupendous for firms that can establish a viable supply chain. The supply challenges, however, are formidable, including tariffs, access provisions and mastering different cultural and legal details involved in establishing a profitable and secure pipe line.
Government support to improve trade access arrangements and facilitate negotiations around supply chain chain solutions and joint ventures may be a critical factor into tapping into Chinese and other Asian markets.
Trade between NSW and China is approximately $30 billion per annum growing 9% per annum over the last five years (ABS, 2014). Increasngly, however, Chinese firms are taking direct positions in the Australian market. Chinese investment in Australia now exceeds $20 billion and is growing rapidly (ABS, 2013).
Chinese firms have primarily invested in mining and energy but there is significant interest from Chinese investors seeking to lock in supply of agricultural products. The strategy states that NSW Government is 'investigating alternative financing models', hopefully with a view to facilitating productive joint ventures between Australian and Chinese entities.
In addition to strengthening the position of NSW agriculture in China, key aims of the China Strategy include:
- Fostering the teaching of Mandarin and Cantonese in schools;
- Boosting Chinese tourism to NSW;
- Maximising the benefits to NSW of the forthcoming Australia-China Free Trade Agreement;
- Promoting Sydney as a centre for delivering wealth management to China, and partnering with industry in a "Sydney for Renminbi" initiative;
- Increasing exports of NSW professional services and innovation.