Australian businesses in China optimistic but challenges remain

Australian businesses in China are optimistic about their future prospects but cite increasing competition, access to skilled labour and wage pressures as some of the major challenges.

This is according to the inaugural Australia China Business Perceptions Survey conducted by Austrade, surveying 153 company CEOs and directors across Beijing, Hong Kong, Shanghai and South China. The report found that seven in ten Australian businesses in China were optimistic about the Chinese economy, and that 66 per cent were optimistic about the outlook for their own organisation.

One-quarter of Australian businesses in China indicated they were extremely likely to expand, with almost 30 per cent very likely to grow their physical presence. Businesses cited growing demand as a key reason for expansion, rather than supply side cost savings.

Despite improved perceptions of business conditions, many highlighted labour, competition and regulation challenges as affecting their organisation. Access to skilled labour and wage pressures in particular were mentioned as the top two challenges, while one in five businesses indicated a significant increase in competition from both Chinese and non-Chinese companies as another issue. Over half of surveyed businesses identified price and customer service as the main reasons for competitive pressure.

This comes as the Federal Government announces Asian Century business grants, aimed at improving business organisations ability to fund trade missions, market research and other innovative activities.

Read more about the grants here.

You can also view the survey here.

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