Growing middle class in Asia could trigger export boom
Statement by Trade Minister the Hon Andrew Robb AO MP
Published in the Financial Review
26 November 2013
As consumer demand surges in Asia in response to extraordinary levels of middle-class growth, what are seen as niche markets in our north will actually resemble mass markets to Australian international businesses.
If trends continue, within five years the Asia Pacific region will be the world’s largest producer and consumer of good and services. Today there are about 500 million people in the region’s middle class, yet by 2030 that figure is expected to reach a staggering 3.2 billion.
As consumer demand escalates in-line with increased middle-class purchasing power, enormous opportunities will be created for Australia’s entrepreneurial exporters and service providers.
These dramatic economic and demographic shifts will make the 21st century the century of food and water security. By backing their strengths, Australian exporters are extremely well placed to capitalise on this unprecedented opportunity.
Mining and resources, agriculture, education, medical research and tourism are things we do as well as any and better than most.
Additionally, we have an excellent reputation across a multitude of services; in many cases they have evolved around our core industries, including adaptable, high-end manufacturing.
During a recent visit to Hong Kong, no fewer than 32 services were raised with me that are in demand in China, and which Australian providers are capable of delivering to the highest standard. The list included banking and financial services, architecture, logistics, healthcare, education and vocational training through to project and events management.
Exporting to Asia is highly competitive and the opportunities won’t just fall into our lap; we need to be innovative and be responsive to emerging demands, but we are certainly up for the challenge. We are a high-cost country and consequently we are best served focusing at the quality, high-gross margin, end of the market. There are countless success stories of Australian businesses exporting to Asia that are doing just this. Exports contribute about $300 billion to our economy a year, or about 20 per cent of GDP. This achievement is something to celebrate and to build on. Recognition of achievement can serve as inspiration to other entrepreneurs to pursue new markets.
Exporting certainly takes courage, particularly for those businesses just starting out. Among the challenges they face are cultural and language barriers, different regulatory systems and ways of doing business combined with the problem of accessing finance and finding distribution channels. Our government remains committed to providing strong levels of support to exporters, with export market development grants, regular trade missions and other assistance provided through Austrade. The free-trade deals we are seeking to conclude with our major trading partners in China, Japan and South Korea, will make our existing exporters more competitive and open up new opportunities in various areas of these markets. Regional trade deals such as the Trans-Pacific Partnership will help integrate our economy into the broader Asian economic zone. We are determined to do what we can domestically to make our exporters more cost competitive by abolishing unnecessary taxes. This helps add weight to our core “open for business” message to the world.