IN AN Austrade office in Shanghai, Australian Trade Commissioner Brent Moore is sharing information about export opportunities in China with a collection of small farmers and producers from southwest Victoria.
Reports of China inevitably include the words “growth” and “opportunity” but Moore makes many of us take notice when he gives China’s continuing economic rise a regional Australia context.
“In China, improvements in living conditions of smaller cities will be a major driver of growth,” he says. “There are cities that within a generation will experience growth that is the equivalent of Ararat becoming the size of Melbourne.”
I ask how many Ararats will be transformed and the answer is near impossible to comprehend: “Possibly hundreds,” I am told.
The forecast seems astonishing. China’s middle class is expected to grow by 100 million people in the next 15 years and the demand for food is expected to double by 2050. The Chinese are working to be self-sufficient in nearly all they do, but feeding themselves may be the exception. China has 20 per cent of the world’s population but just 9 per cent of the world’s arable land. Much like Australia, deserts cover a significant portion of the country. Yet given rising Chinese incomes, subsistence agriculture may one day be confined to history books.
Fifteen small Australian businesses, most of us farmers and producers, travelled to Shanghai on a fact-finding mission, funded by Austrade.
My wife, Jodi, the boss of our business Great Ocean Ducks, sent me along on the week-long trip. Caroline Kissel from Kiss & Run open-range eggs, Tim Marwood from Timboon
Fine Ice-cream, Carissa Archibald from Berry World, Isabel Renters of Great Ocean Road Woollen Mill and Lana Campbell from Lana’s Garden were just some of my Shanghai colleagues. All travelled to learn.
Ken Howell, from the South West Institute of TAFE, organised the trip on behalf of Austrade. Ken has visited China 30 times, six times alone last year. Austrade’s interest in small farmers — who aren’t ever going to be huge exporters — makes sense according to Ken. “Australia is never going to be the bread basket of Asia but it can be its delicatessen,” he says. “China is crying out to get access to clean, quality food.”
Ken says there is good reason for this well-known message: food scandals are major issues in China. We are told 500,000 food safety incidents are reported to authorities each year.
Especially for people with children, food contamination is a daily topic and, according to Ken, Chinese are often wary of local produce. “I know Chinese who will wash local products in bottled water three times to try to make sure it is clean,” Ken says.
Not surprisingly, Chinese consumers are interested in stories from farms, Ken says. “It is important for them to be able to trace where (a product) came from,” he says. “They love to look on the web and see, for example, the paddock where the food has come from. They want to make sure the produce is real, that it’s not fake.”
During our visit we meet with Shanghai-based Australians forging their own paths in China and they generously share their expertise. Among them are Ballarat-born Andrew Kuiler who runs marketing consultancy The Silk Initiative, John Boyle from National Australia Bank and Michael Baird who represents the Victorian Government in China.
As a group, we join their dots and determine some key points for potential exporters.
We are told that despite the doomsaying of some business commentators, China isn’t going to implode any time soon. The growth in its economy may have slowed from the storied days of 14 per cent a year, but the current growth of 6 per cent is, it is estimated, still equivalent to the entire Swiss economy. “If you’ve bet against the Chinese economy you’ve got it wrong,” John Boyle says.
The big growth is happening in second, third and fourth-tier cities — some of these have populations of five million or more — and may represent the metaphor of Ararat alchemising into Melbourne. Nanjing, Shenzhen and
Shenyang are three such cities.
Our group is encouraged to target the smaller cities where it may be easier to develop relationships and even exclusive produce deals. Doing business in China is about building relationships. Opportunities exist but the world has caught on. Anyone wanting to export to China will be competing with farmers and producers from Azerbaijan to Zambia and just about everywhere in between.
So, where does anyone keen to pursue Chinese opportunities even begin? Andrew Kuiler says local governments with sister-city relationships in China can be a good place to start.
Warrnambool, for example, has had a sister-city relationship for five years with Changchun, a city in China’s northeast with a population of eight million.
Shaun Miller is Warrnambool Council’s manager for economic development and investment. He lived in China for five years and speaks Mandarin. He runs the Warrnambool-China Bureau, which is essentially a support network for exporters and potential exporters. Shaun’s remit takes in Corangamite, Moyne, Southern Grampians and Warrnambool Shires. He says other councils including the City of Greater Shepparton and the City of Ballarat also have relationships with China. A phone call or email is all it takes to initially engage Shaun.
“We work with individuals and their current capacities and their goals,” Shaun says. “We also work with (people in) Chungchun to navigate the market and its complexities.”
Shaun and his colleagues in Changchun will help set up meetings with companies interested in Australian produce, whatever it is. With backing from federally funded organisations, Shaun can help navigate the challenges of establishing a presence in China, including translation. “There is a lot of government money, state and federal, to help small farmers enter China,” Shaun says.
Lana Campbell produces rhubarb preserves at Warrnambool. For her, the time in Shanghai proved inspiring. “I’ve plans to include exporter on my gravestone,” Lana says.
Of those on this trip, she seems to be one of the most China-export ready and not least because her Lana’s Garden relishes and jams have a shelf life of about 18 months. Lana has plans to work with Warrnambool’s China Bureau. Sensibly, her export steps will be slow.
In Shanghai, the stories were tempered by caution. “The Chinese are looking for small-batch artisanal products they can have at home,” says Andrew Kuiler, who describes his company as China’s only specialised food brand consultancy. “Do your research. You can come and go in a flash in China.”
The tales of caution are gratefully received, but a troupe of us from the Austrade trip are making plans for a return trip to China and it’s a sure bet we’ll be exploring opportunities in a second or third-tier Ararat-type city, rather than Shanghai.