{"id":907886,"date":"2026-09-27T23:12:09","date_gmt":"2026-09-27T23:12:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/907886\/"},"modified":"2026-09-27T23:12:09","modified_gmt":"2026-09-27T23:12:09","slug":"chinas-economy-is-changing-rapidly-its-no-longer-australias-easy-export-market","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/907886\/","title":{"rendered":"China\u2019s economy is changing rapidly. It\u2019s no longer Australia\u2019s easy export market"},"content":{"rendered":"

For decades, China\u2019s market of 1.4 billion people and extraordinary economic growth gave Australian exporters seemingly endless opportunities. The prevailing assumption<\/a> was that China\u2019s growing middle class would:<\/p>\n

build more infrastructure requiring steel<\/p>\n

consume more electricity using coal<\/p>\n

and send their children overseas for education. <\/p>\n

But China has been transitioning rapidly from the manufacturing powerhouse of the early 2000s. It became an innovation powerhouse in the mid-2010s and established global brands in the past five years. The assumption that Western products and brands would retain an enduring advantage<\/a> has become outdated. <\/p>\n

Australia, as a main beneficiary of China\u2019s growth, needs a strategy for what comes next.<\/p>\n

China\u2019s rapid transition<\/p>\n

A key driver of China\u2019s rapid transition is the mix of top-down long-term industrial policy and a highly competitive domestic market. <\/p>\n

Top-down policy from the Chinese government provides direction and certainty for companies and investors. <\/p>\n

They focus on new technologies to decarbonise the economy through renewables, or become a high-tech leader in artificial intelligence (AI), robotics or medicine. Innovation is driven by mostly private companies that make decisions quickly, compete aggressively and collaborate across sectors.<\/p>\n

The scale of this effort is considerable. China invested 61% more in research<\/a> and development in 2025 than it did five years earlier. In 2024, its research spending surpassed that of the United States<\/a>, adjusted for the purchasing power of different currencies.<\/p>\n

By 2025, China\u2019s research and development as a share of economic growth exceeded the average<\/a> of OECD nations. <\/p>\n

The new reality for coal and iron ore<\/p>\n

For Australia, which sends about 30% of its total exports to China, this transition is already showing in the numbers for our most important export sectors. <\/p>\n<\/p>\n

Iron ore is the clearest example. Australian iron ore exports to China, which account for around 15\u201320% of the nation\u2019s total global exports, have been falling<\/a> from a peak of A$127 billion in 2021 to A$104 billion in 2025.<\/p>\n

China\u2019s steel industry is transitioning to low-carbon iron and steel<\/a>, driven by tougher regulation and new sources of iron ore. <\/p>\n

The iron ore that Australian companies are currently shipping to China does not meet quality standards for low-carbon smelting technologies. To ensure long-term exports continue, Australia will need to invest billions in \u201cgreen\u201d iron capacity, mainly through renewable energy and processing facilities.<\/p>\n<\/p>\n

Coal faces a similar challenge. Australian coal exports to China have fallen even more \u2013 by as much as 50%<\/a> since the post-COVID peak in 2024.<\/p>\n

This drop has been driven by China adding massive amounts of new solar and wind \u2013 about 1,668 gigawatts of energy capacity<\/a> between 2015 and 2025. This has overtaken coal capacity and led to a decline of coal consumption in 2025.<\/p>\n

China will not stop using coal overnight. But Australian exporters must assume that Chinese coal demand will keep falling, even as its energy demand continues to rise.<\/p>\n

Student numbers are falling too<\/p>\n

Higher education faces a different version of the same problem. Students from mainland China comprised about 43%<\/a> of Australia\u2019s fee-paying overseas students in 2024. <\/p>\n

Yet arrivals of new higher-education students from mainland China fell by 18%<\/a> in 2025\u201326 due to an ageing Chinese population with fewer students, and, importantly, fewer benefits from studying in Australia.<\/p>\n

In the 2025 rankings of global research institutions published by Nature<\/a>, mainland Chinese institutions held nine of the top 10 positions, up from just one in 2020. On that ranking, Monash University, Australia\u2019s highest-ranked institution, placed 113th \u2013 trailing 55 Chinese institutions. <\/p>\n

For many Chinese students and families, the question is why study abroad if studying in China is deepening knowledge and local networks relevant for jobs, while Australia makes the pathway to residency more difficult? <\/p>\n

Australia\u2019s Group of Eight universities earn about one in every three dollars<\/a> from fee-paying overseas students. A sustained fall in Chinese enrolments is already hurting university finances.<\/p>\n

Read more:
\n Life just got tougher for international students under new visa rules. Why is this group being targeted?<\/a><\/p>\n

Complaining is not a strategy<\/p>\n

What are the options for Australia? The government may focus on raising its concerns about Chinese overcapacity, state support, and unequal competition \u2013 while hoping to continue exporting to China.<\/p>\n

Companies might also hope to find other, less demanding markets for their exports. <\/p>\n

However, neither complaint nor complacency is a worthy economic strategy.<\/p>\n

The better response starts with understanding what we can offer that complements China\u2019s long-term economic priorities such as green hydrogen, green steel, AI, medicine or education. <\/p>\n

Australia also needs to respond with greater ambition and policy focus at home. The federal government\u2019s Future Made in Australia<\/a> strategy introduced in 2024 was a useful start for a green and innovation-driven Australia. <\/p>\n

But capital investment depends on reliable policy signals. Federal and state governments have too easily reverted to support \u201ctried and tested\u201d projects, including new approvals<\/a> for coal and gas exploration and bailouts for ageing industries<\/a>. Queensland\u2019s decision to ditch proposed electric buses<\/a> to buy 630 new diesel buses is one example of this contradiction. It puts into question the claim for sustainable 2032 Olympics.<\/p>\n

Businesses have work to do as well. They need to invest more in innovation, training and education. They need to support decentralisation and entrepreneurship for faster decision-making. They need to focus more on future consumer demand, and less on pre-empting compliance requirements and meeting short-term investor expectations.<\/p>\n

More broadly, it also means strengthening collaboration between industries, universities and across international borders. That includes with Chinese partners, where it is in the national interest. <\/p>\n

Exports will remain essential to Australia\u2019s economy. But as China \u2013 our principal market \u2013 transforms into a more demanding and discerning buyer, it will drive growth only for the businesses that rise to meet it.<\/p>\n","protected":false},"excerpt":{"rendered":"For decades, China\u2019s market of 1.4 billion people and extraordinary economic growth gave Australian exporters seemingly endless opportunities.…\n","protected":false},"author":2,"featured_media":907887,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-907886","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/907886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=907886"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/907886\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/907887"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=907886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=907886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=907886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}