When you are punting on this year’s Melbourne Cup, have a bit of sympathy for Australian export businesses that have to make their big bets on international markets in the Asian region.
Like a good punter, Australian exporters have to look at the horse, the jockey, the state of the track, and of course, the odds. And it is not just a flutter for them but a major business decision that will affect their livelihood as well as the wellbeing of those whom are dependent on their business as well.
To help the average racegoer understand the nuances of exporting, the following export ‘form guide’ has been produced.
Horse number one is Great Samurai, representing the Japanese market. It’s a longstanding champion, has been written off by some, but still very capable and strong and has helped others develop in the East Asian stable yards through outward investment. Maybe Abe-nomics will make a difference?
Secondly, there’s New Dynasty, representing China. This dynamic new colt has surprised seasoned punters with his ability to maintain a fast pace, year after year. But can it keep that pace up as it matures?
Thirdly, Passionate Tradition, representing Korea. This little known but powerful galloper with an industrious approach has revealed new appeal to punters in recent years.
Fourthly, there’s Fragrant Harbour, representing Hong Kong. Known for slipstreaming the colt from China but also an attractive performer in her own right.
Fifthly, there’s Little Dragon, representing Taiwan. She is occasionally overshadowed by her new high profile cousin, New Dynasty, but she’s a tidy performer who has rewarded loyal supporters well over many seasons.
Next is The ASEAN Emissary, representing Vietnam. This is the dark horse of the East Asian field that has put together a string of good seasons in recent years and seems set for even better days ahead.
Next is Taj Mahal, representing India, who is an up-and-comer twinned sometimes unfairly with New Dynasty, but is coming into his own thanks to ongoing reform of stable practices. But recent fiscal position may cause a scratching.
Finally there’s Archipelago, representing Indonesia. Had question marks a while ago, but can now start challenging the field and become an up-and-coming favourite amongst Aussie punters with high rates of return.
Racegoers should also consider a few newcomers amongst the emerging markets including Arabian Nights from Abu Dhabi in the United Arab Emirates, Samba Fever from Brazil and even a roughy like Genghis Khan from Mongolia, Burmese Days from Myanmar or Boratnomics from Kazakhstan might be good for a place.
So there you have it, your own export form guide for Asia.
Fortunately, back in the real world, exporting is clearly not all about luck as much as skill and strategy. It requires good research, innovation, flexibility and good knowledge of your prospective market. And most importantly, the evidence shows that it does pay off.
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According to economic research, exporters are, on average, faster growing, more profitable and more productive than non-exporters. Exporters also pay better wages; provide better employment conditions and higher quality jobs than non-exporters. In short, exporting is a good bet for both large and small players in the international trade game but you’ve got to be a stayer in the Asian Century.
Tim Harcourt is the JW Nevile Fellow in Economics at the Australian School of Business, UNSW and author of The Airport Economist: www.theairporteconomist.com