Due to their close geographical proximity, there has always been a lose link between businesses located in Asian countries and those found in Australia and New Zealand. Now that Asian economies such as China, Singapore and Malaysia are showing signs of exponential growth slated for the next decade, economic ties between Oceania and Asia are now becoming more important than ever before.
Previously seen as a continent where incomes were low when compared to North America, Europe and Oceania, Asia now has an ever expanding middle class. Some forecasts indicate that the majority of middle class consumers will be located in Asia by the year 2030. This has led countries like Australia and New Zealand to rethink their strategies on how they deal with their business ties with Asia.
As the continent's economy was largely based on exports, a large portion of the trade between Asia and Oceania involved consumer goods being exported from Asia and ending up in Australia and Oceania. But now, the reverse is starting to take place. A notable example of this would be the Penfolds Grange, a brand of premium Australian wine, which is now highly popular among Chinese consumers. But it's not only wine. Asia has a large demand for minerals of all sorts, which are used in the manufacturing sector, particularly in the case of electronics. Australia has numerous mines that could supply them, which is what allowed the country to go through the most recent economic downturn without too many negative effects on its own economy. Now, as Asia's affluence grows, Australia and New Zealand are getting ready to sell other products and services to Asia, such as food items, financial services and education.
Australia in particular, is a large country with a decent amount of farmland. Many of its companies in the farming industry are quite happy to see growing demand for food imports in Asia, seeing it as a golden opportunity they can take to expand their horizons and bypass the limitations of the domestic markets.
Julia Gillard, Australia's Prime Minister, has unveiled a plan that lists the objectives that the country must meet if it wants to stay competitive in the face of Asia growth. Objectives include forging links between educational institutions in Australia and Asia, which will encourage Australian students to learn an Asian language. As growing incomes mean more travelers in the region, both Australia and New Zealand are working together with their Asian neighbors to simplify visa requirements, which will make it easier for Asian visitors to enter their countries for tourism or business purposes.
Twenty years ago, as memories of the Cold War sere still fresh, many individuals in Australia and New Zealand were cautious of China's next moves, particularly the growth of the country's military apparatus. But recent polls show that public opinion is now changing. Australians now welcome China's presence in the region and don't see the country's military expansion as a threat to their own. Companies in Australia and New Zealand, which were primarily focused on domestic markets for many years, have looked at the success of exporting food and mining products to Asia and are now trying to find the best way to enter the market. In the long term, this can only be profitable for all countries involved.
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Published by: Valerie Wong