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Article provided by Business Research and Insights
Australian service exports to China have been increasing for more than ten years. Performance is strongest in areas where Australia has internationally recognised expertise or can bring its own unique comparative advantages to bear, for example in in-bound education and tourism.
In cross-border and in-country provision of services in China, Australian providers are subject to regulatory constraints and face the same hurdles as providers from other countries. When, in November 2013, China’s new leadership released their 60-point decisions as the economic blue-print for the period until 2020, they included three commitments to opening up services to international competition. The first was to treat domestic and foreign service providers on the same basis; the second to establish the China (Shanghai) Free Trade Zone and the third, and most detailed, was a list of service sectors to be opened.
To date, the opening up of the Chinese service sector has been gradual, with reform being rolled out cautiously via pilot projects and coordination with stakeholders. This makes the progress and sequencing of these reforms difficult to predict, but at the same time creates incentives for Australian business to be involved at an early stage such as the big Australian banks or AMP have done.
Australian companies have achieved partial breakthroughs in insurance, banking and currency trading. At the same time, Australian financial and professional service providers are opening up two-way business opportunities for their Australian and Chinese clients. Australian companies operating in a market environment are doing well in other service sectors such as architecture and design.
Turning to services provided to Chinese clients and consumers within Australia, education and tourism are the backbone of Australian-based service exports that produce huge community benefits. China is Australia’s biggest market for international students. As of December 2013, 28% of international students studying in Australia came from China (Table 2.5). Growth in student numbers from China has stabilised in recent years. Between December 2012 and December 2013, the annual growth rate was only 0.2%, lower than the overall growth rate for international student enrolment. Chinese sources indicate that demand for overseas education is stabilising and that flat growth for Australia is the trend, while the United States and United Kingdom are performing slightly above trend.