The current turbulent relationship between Beijing and Canberra is unlikely to become runway smooth in the near term. This raises genuine concerns for businesses in Australia.
That 34% of our GDP is tied to China as our prime customer, brings serious gravity to the current conditions. Over one third of our export to one country makes Australia economically dependent on China for our prosperity. Any degradation of political relationships will have a major impact on that dependency.
If the national economy is one third exposed, how does this translate to some of our mining and energy producers, then? Certainly in many cases, this exposure will be far more than a third of their product being sold to Chinese customers.
How are Boards managing this real-time, medium-term risk?
What alternate customers are there?
What options exist for improving trade relations with other regional customers, such as: Japan, South Korea, Indonesia, Thailand, Vietnam and India? Diversification of customers is a necessity.
What opportunities and challenges do you see in managing this trade dependency in the medium term?
I'd like to hear your thoughts on this matter
Send me an email: peter@sersolutions.com.au and let me know your thoughts, or how you and your company are managing this risk. I’m keen to learn what solutions there are for the industry and economy. Alternately, give me a call, the contact button is on the screen.
