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The fundamental shift underway in Australia’s economic relationship with China was on show on the first day of this year’s Australia Week in China trip.
While the health and aged care business stream attracted 130 Australian delegates and almost as many Chinese attendees at the first day of talks in Beijing, a planned mining stream was scrapped due to low interest.
Following the packed out session, John Brumby, national president of the Australia China Business Council and a former Victorian Labor premier, said while there has been a drop-off in resource prices, an overlooked element in Australia’s trade relationship “could prove to be more substantial — in jobs terms — as what we’ve seen from resources”.
“When we think about trade with China and ChAFTA (China-Australia Free Trade Agreement), we often focus just on the agribusiness opportunities — they’re substantial enough in meat, agriculture, grain, dairy and nutraceuticals like Blackmores and so on,” Mr Brumby said.
“But in reality, I think over the next decade, the area that’s going to offer most opportunity and most growth in total dollar terms is going to be the health and aged care sector”.
According to the UN Population Division, the number of people aged 65 and above will rise from 132 million in 2015 to 331 million by 2050, while the number aged 15-64 will fall from 1 billion to 849 million. A recent McKinsey report found that China’s health market will be worth $1.4 trillion by 2020.
Beijing is keen to import expertise and services into its aged care sector to give it a boost – and Australia is well placed to give them the help they need, Mr Brumby said.
“As China continues to grow at six and a half per cent per annum, under the new five-year plan through to 2020, you’ve got the accelerator — which is GDP growth — but you’ve also got the escalator, which is that they’re going to be spending a bigger and bigger percentage of their GDP on healthcare.”
“Australia is seen by China and indeed seen by most countries around the world as having one of the best, if not the best health and aged care system in the world – ranging right through from what we do in medical research to aged and palliative care,” according to Mr Brumby.
The former Labor premier said the opportunities for Australian companies in the health and aged care sectors would materialise as a “mathematical certainty”.
“If you think of China generally, it’s spending about 5 per cent of GDP on healthcare. Australia spends more than 10 per cent. The United States spends 17 per cent,” Mr Brumby said.
“It is a mathematical certainty that within a few years – perhaps a decade, perhaps longer – China will be spending 10 per cent of GDP on healthcare, doubling what it spends today. In turn that will create huge opportunities right through the industry”.
Mr Brumby pointed to the desperate need in China for nurses as one such mathematical certainty. “China’s ratio of nurses is 1.8, the OECD average is 8.8. It would lead you to the conclusion they’re going to need to train millions more nurses over the next few years”.
“There is a shortage of aged care workers of ten million. Not ten thousand… ten million aged care workers”.
Mr Brumby said that a key goal of former trade minister, now special trade envoy Andrew Robb was to open up these opportunities in the health sector – particularly for joint ventures – and that this was now materialising.
Mr Brumby said Australia has “been singularly and spectacularly successful in driving down smoking rates and therefore cancer rates” and that given China has 30 per cent of the world’s smokers, this was another area where good work could be done.