Bullish Australian businesses have China's west in sight(3)

In his last visit across China's booming west and the established east coast metropolises, Tim Harcourt, the JW Neville Fellow at the University of New South Wales School of Business, said that Australian business were ramping up their local engagement.

He told Xinhua, "I was just in Chengdu visiting Rheem, an Australian manufacturer that assembles hot water systems. They said that there was strong demand in the Chinese domestic market that supported their sales growth no matter what was happening in terms of exchange rates."

As Harcourt identified, the survey respondents said their biggest challenges in China were finding the right skilled labor, overcoming regulatory hurdles and coping with increased price competition from rivals.

"In Shanghai too, Bluescope was coping with tough competitive conditions mainly due to the scale of the Chinese market and the high rates of urbanization in China," Harcourt said.

China has swiftly become the most important export destination for Australia, while the resource-rich nation ranks as the eighth largest trade partner for China.

Remarkably, bilateral trade has grown at an average annual growth rate of 26.8 percent for more than ten years.

The economic symmetry and the growing expansion of trade ties with China has delivered both wealth and confidence to the Australian economy.

According to research by the Australia China Business Council, the average value of trade with China per Australian household between 2010 and 2011 was 13,470 Australian dollars.

Saul Eslake said that conversely the growing wealth in Chinese household incomes would provide the next boom for Australia's commodities and services sector.

"From a longer term point of view, it is also in Australia's interest to see strong sustainable growth in Chinese household incomes, and in household consumption spending, in order to improve prospects for Australia's exports of agricultural commodities and various kinds of services, including tourism, education, and financial and professional services," he said.