The latest ABARE report shows that export volumes for iron ore (more than 98 million tons) and coal (more than 74 million tons) reached record levels in the December 2009 quarter.

“The record volumes of bulk commodity exports in the December quarter were underpinned by demand from steel mills and power stations in Japan, the Republic of Korea and China,” said Paul Morris, ABARE deputy executive director.

The rise occurred despite a strong Australian dollar, which increased in value by nine percent during the period. ABARE estimates Australia’s earnings from mineral resources at $31 billion for that fourth quarter, representing a rise of one percent.

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Here are my high level observations on China’s retail sector, which is very relevant to all foreign retailers and other businesses looking to tap into China’s domestic consumption boom:

Chinese consumers are converging into global consumers
Walking around the hyper-markets of Shanghai, the book stores of Beijing and reviewing the retail numbers in at least the first-tier cities, I can confirm that Chinese shoppers look, behave and act very much like consumers in most other cities around the world.

They are perhaps more price sensitive than some, and they are still learning how to sift through the vast range of products and brands available, but they are all out there buying foreign brands, comparing prices and spending their money on products which look remarkably similar to the ones we buy in supermarkets and retail shops throughout the world.

Chinese companies are open to new ways of doing things
Businesses, and even State Owned Enterprises, which are generally regarded as conservative, inefficient and slow to adapt to changing market conditions, appear to be embracing new ideas and business concepts that have worked in other parts of the world, and adapting them to suit the local conditions. I was impressed by how open, warm and interested our hosts were in the new ideas presented to them, and how willing they were to share information, market knowledge and ideas. It’s always the same whenever I go to China, but it always seems to surprise me!

Everything is changing very quickly
It’s dangerous to make too many assumptions from a distance, you must be on the ground in China, talking to people and kicking the tyres, to understand how quickly things are changing and how local players are moving the market and increasing the barriers to entry for future aspirants.

Whenever you think you really understand something, you find an exception to the rule, a local who has found a way to do something that was previously considered impossible, or the market has moved to a new place.

China is spending billions to export its culture, information and news to the rest of the world

This serves three important purposes:

1. To reach out to the Chinese diaspora around the world, re-connect them to the motherland, introduce them to old and new Chinese culture (drama, music, opera, art etc) and provide them with access to Chinese news and information which is free of foreign influence and control
2. To encourage foreigners to explore China’s deep, rich and unique history and culture in their own way, promote tourism, remove fear and misunderstandings, and present a new image of a country which is on the move and making a positive contribution to the development of the human race.
3. To distribute Chinese news, information and current affairs to the rest of the world in a way which makes sense to the Chinese Government and is free of foreign influence, interpretation and bias.

Huge amounts are being spent in these areas and there are opportunities across the board for media, publishing, distribution and other individuals and companies who see this as an opportunity, rather than a threat.

Life improvement
The hot issue in China today is the aspiration that everyone has to improve their own life, to seek a better work/life balance, live a more healthy life and to seek self-enrichment through learning, education, children, leisure time, hobbies, regular exercise, healthy food and a cleaner environment.

This is a driving force, not only because of China’s poor (but developing) public health system but because of the fast growing middle classes that have more money, more time and more incentive to live a long and happy life. The genie is out of the bottle now - the Chinese also want everything!

Conclusion: I’ve said this before, but I’ll say it again, every Australian company must have a China strategy!

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Thompson described a “rapid rise in anti-globalisation” as the cause of dissent, putting a dampener on the possibility of the round concluding this year as planned.

“Realistically there is no way with 10 percent unemployment that we will see trade negotiators moving forward this year; 2011 is questionable, but I don’t think unemployment will come down fast enough, and 2012 is unlikely due to the presidential election. If the economy is moving again then I think a window might open up in 2013,” he explained.

The USA’s take on the negotiations differs to that of the Australian government and World Trade Organisation director-general Pascal Lamy, who was in Australia last month saying he expected the talks to conclude this year.

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US Trade Representative Ron Kirk said they were in discussions with Google and US internet providers to understand the operating environment in China while “trying to make our own determination whether we believe in fact this is not WTO [World Trade Organisation] compliant and if the best resolution is to go forward and file an appeal”.

However, Kirk said going through bilateral forums such as the US-China Joint Commission on Commerce and Trade was preferable to “the uncertain path of what can be a two-, three-, four-year legal battle in the WTO”. He indicated a WTO case would be a last resort.

If the case did go to the WTO, it would be the first focused on censorship for the organisation.

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Operation Tram, run by Interpol, used national wildlife enforcement authorities, police, customs and specialised units from 18 countries to uncover illegal trade, including medicines containing – or purporting to contain – illegal ingredients such as tiger, bear and rhinoceros.

“This operation has again proved that while environmental criminals may cross borders and display high levels of organisation, so too will the international law enforcement community in its efforts to apprehend those criminals,” said David Higgins, manager of the Interpol Environmental Crime Programme.

“The important cultural, historical and religious values of traditional medicines is recognised by the law enforcement community,”  said UK police spokesperson Chief Constable Richard Crompton. “However, the increased use of endangered species in medicines can no longer be tolerated as it places extreme pressure on their very survival and existence.”

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“As the economy recovers, businesses still have to go back and do business,” he noted. “‘I think what you’re seeing now is certainly a trend, or have seen in the last 12 months, a trend in reduction in corporate spend but that will turn around and we’re starting to see signs of that already.”

His view supports a recent survey conducted by aviation consultants Ascend, where results showed a 10 percent increase in the number of corporate travellers expecting to fly more this year, to 35 percent of 250 respondents.

Borghetti admits that corporate travel suffered during the global financial crisis but was confident it could reclaim pre-GFC levels based on previous experience.

“In my 36 years of experience I’ve seen situations like this happen before,” he said. “All you’ve got to do is look back to the Asian crisis and ask some of the Asian carriers how much their business traffic died during that period but then how quickly it came back.”

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UNWTO Secretary-General, Taleb Rifai, will deliver the keynote address at the official opening of ITB on March 9, while other activities throughout the event will include a debate about the role of tourism enterprises in driving local economic growth; a discussion of tourism trends including sustainable initiatives around the world; and a meeting regarding the Protection of Children in Tourism.

For more information about the event, see the ITB website. For details on UNWTO activities, see www.UNWTO.org.

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According to Farm Weekly, Chile lost 12 percent, or 125 million litres, of its 2009 vintage, as well as some of its short term capacity to produce wine.

“Without wishing to take advantage of an export rival’s devastation, Australia has large surpluses in stock and growing capacity to help meet any new shortfalls,” said managing director of Angove Wines, John Angove.

However, according to a joint statement by the Winemakers’ Federation of Australia, Wine Grape Growers’ Australia and the Federal Government last year, Australia’s overcapacity is not the only thing stifling our wine trade: “A strong dollar and our industry’s cost competitiveness have been more significant.”

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The Singapore branch will also host the first Miss Pole Dance Singapore in July and provide help with choreography for the Youth Olympic Games opening ceremony, which will occur in August.

Co-founder of Bobbi’s Pole Studio Vanessa Brecht said the two Asian countries did not have strip clubs so pole dancing was viewed as sport, without the sexual overtones it has here.

However, even in Australia pole dancing is no longer the sole domain of the sex industry, with the activity becoming a growing fitness trend. Dozens of studios have opened nationwide in just five years, and Australia has built a global reputation as leaders in the industry, particularly in the education of instructors.

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In the meantime, earnings for the 2009/10 and 2010/11 financial years will remain steady at around $29 billion, according to the latest issue of ABARE’s Australian Commodities.

“The projected increase in farm export earnings will be supported by recovering world economic growth and is under the assumption of favourable seasonal conditions in Australia,” said Phillip Glyde, executive director of ABARE.

Barley, rice, raw cotton, sugar, wine, live cattle and dairy products are the agricultural commodities forecast to experience a rise in 2010/11 export earnings.

“However, an expected increase in world grain supplies is likely to continue placing downward pressure on prices in the short term,” Glyde noted.

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