As relations deteriorate further between Australia and China, the government must consider the implications for Australian companies. My own firm, Parabellum Investments, recently polled consumers across Australia, the US and Britain, and found a strong shift in sentiment and buying intentions away from China, which many blame for the pandemic, and towards more local or regional suppliers.
As investors in mid-sized companies, we are now looking for opportunities in Australia, the Americas and Europe to invest in businesses that supply near-sourced services to large corporations.
Australia could position itself to attract new investment, especially from companies pulling out of China, as many will seek alternatives to their existing supply chain there.
Achieving this will neither be easy nor quick, particularly in the context of a recession, and will require decisive government action to attract inbound investment, and lower barriers to entry which may well mean a subsidy of employment taxes. It should also mean a concerted effort to “buy Australian”, both to reduce reliance on China and to support local businesses.
China has made it clear what it thinks of Australia with bullying tactics and economic recriminations unfit for the second-largest economy in the world.
Strengthening trade agreements with our local partners, particularly those in the South China Sea on the receiving end of similar Chinese treatment, must be an immediate priority.
Australia has a wealth of talent, not just in mining but also technology, financial services and healthcare, all of which measure up to any other workforce globally. But it requires investment to develop, support and grow.
Rami Cassis, CEO
Originally published at https://www.afr.com/politics/federal/letters-opportunities-in-the-china-turn-off-20200609-p5510l