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World / Highlights

Exports head north amid cuts to tariffs

By KARL WILSON (China Daily) Updated: 2016-05-26 17:22

He said Blackmores is building a strong export business in China. The company has recorded double-digit growth in the export of Australian manufactured products to the country.

Osborne said under the regulatory oversight of Australia's Therapeutic Goods Administration, all health food exports from the country (often known as complementary medicines in Australia) are subject to "stringent and rigorous regulatory environments".

This means that Australian health food products are in some cases more expensive to make, relative to products manufactured in other countries. This makes Australian products "intrinsically less price competitive in China", he explained.

"Depending on the product classification, prior to the conclusion of ChAFTA, Australian health food products faced average tariff rates of 20 percent on importation into China. These tariff rates are some of the highest for vitamins and dietary supplements in any of our markets in Asia."

ChAFTA provides significant benefits to Blackmores, and other Australian health supplement companies, with the "reduction in the high current average tariff rate of 20 percent to a rate of zero percent" over the four-year implementation period of the agreement.

Under the agreement, China will provide tariff -free entry for almost all of Australia's pharmaceutical, vitamin and health supplement products within the next four years.

As Australia's economy transitions in the post mining boom period, there is huge potential to develop new ventures. There is thus scope to expand commercial relationships with China by concentrating on the things Australia does well, such as agribusiness and healthcare.

In April, Australian Prime Minister Malcolm Turnbull led a delegation of more than 1,000 people to China as part of Australia Week in China. Members of the delegation comprised mainly leaders of small to medium-sized businesses.

In a speech at a gala dinner in Shanghai on April 14, Turnbull said ChAFTA has injected "new energy and ambition into our economy".

"Beef and dairy exporters have captured the headlines, but they are closely followed by the cherry farmers of Tasmania and wine producers across the country," he said.

"There will be even bigger gains in services. Lawyers, educators, financial service providers, engineers, designers, planners, architects, all will find it now much easier to do business in China … the potential is enormous."

The healthcare sector is already making significant inroads in China. The Aveo Group, one of Australia's leading healthcare providers, recently opened the first stage of a 1.5 billion yuan ($229 million) retirement village — capable of housing 2,500 residents — near Shanghai Hongqiao International Airport.

Aveo has been developing, operating and managing retirement villages for over 25 years in Australia. It is among a host of Australian companies looking to profit from the rapidly aging population in China, where 440 million people are forecast to be aged over 60 years by the middle of this century.

A joint report prepared by the University of Sydney, National Australia Bank and the George Institute for Global Health said: "ChAFTA presents significant opportunities for Australia-China partnership in pharmaceuticals, medical technology, health and aged care, hospitals, research and development and traditional Chinese medicine."

The report noted that Australia is globally recognized for its strength in health and medical care, particularly in aged care.

"Australia's experience and knowledge make it well placed to become stronger partners with China as it continues to tackle the complexities of its changing demography."

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