AN APPROACH TO IDENTIFYING POTENTIAL POST-FTA OPPORTUNITIES FOR AGRIBUSINESSES TO ACCESS THE CHINESE MARKET: AN AUSTRALIAN CASE STUDY

Abstract

With a population of approximately 1.3 billion people, China is currently Asia’s second largest food and beverage market by value behind Japan. Post-WTO, the opening of Chinese markets represents a significant opportunity to countries exporting or wishing to export food to China. This is particularly true of Australian agribusiness as a Free Trade Agreement (FTA) is being negotiated between the two countries. At the same time, China is experiencing great difficulty in establishing and enforcing a code of practice for food quality, safety and traceability, especially for domestically produced food products, notable among them being fresh horticultural products. This study proposes an approach to evaluate the potential of Australian fruit and vegetable exports to China in a free trade environment. The approach is based on scaled evaluation criteria that encompass the major factors constraining food exports from Australia to China. They include tariffs and tariff barriers, evidence of recent export activity, price sensitivity, potential future demand, demand stability, opportunities for chain improvement and overall competitiveness. A study of 12 Australian food categories revealed six with the highest potential, including fruit. The outlook for vegetables was less optimistic. The evaluation approach used could be applied to any country wishing to evaluate potential opportunities to export horticultural produce to China, or to a more detailed study of horticultural export opportunities alone.