The recent signing of the China-Australia Free Trade Agreement has made it easier for SMEs to export services to Australia’s largest trading partner.
Previously, the economic relationship between Australia and China was dominated by exports from the mining and mineral extraction sector. As the mining booms tapers off, service exports have an opportunity to fill the gap and boost the performance of small and medium sized enterprises that have not taken advantage of business with the world’s largest Asian economy.
Service exports can include businesses that deal in law, finance, construction and engineering services, telecommunications, education and medical services.
These types of SMEs should start preparing right now for the growing export market for services to China. One way is to invest in better accounting software, which will allow them to manage their business more effectively.
According to Austrade, the free trade agreement with China offers Australia unprecedented access to their domestic services industry. Australia will constitute one of the first foreign countries to establish law firms in the Shanghai Free Trade Area. Other service industries like engineering consultants and education provider will also be given access to the Chinese market never before seen by foreign countries doing business there.
Service exports is seen as a potential growth industry for Australia. Earlier this month, the federal government asked the Productivity Commission to look into the barriers that Australia businesses face in service exports.
Minister for Small Business Bruce Billson says China is still Australia’s biggest market for Australian services exports, and is worth about $7.5 billion in 2013-2014. This represents 13 per cent of Australia’s total services exports. He urged Australian SMEs involved in services to take advantage of the new opportunities that this trade agreement with China offered.
“We want Australia to be the best place to build and grow a business. That is why we are working to ensure our SMEs have every opportunity to expand their operations into offshore markets,” he said.