Trade ties with South Australia to increase

More premium products and services are expected to flow into the Chinese market, following the signing of several trade agreements between South Australia and Qingdao, a coastal city in Shandong province.

The agreements will spur exports of Australian wine and food products to China, said industry experts. Earlier this week a large trade mission from South Australia, led by Jay Weatherill, the premier of South Australia, and 250 businessmen and government officials visited Qingdao, and some other cities in Shandong.

China is already South Australia's largest export market, accounting for 28 percent of the state's two-way trade. On Wednesday, a number of agreements on cooperation in fields including science and technology, economy and trade, and culture, were inked between South Australia and Qingdao

"The China-Australia Free Trade Agreement - signed last year by Australian Prime Minister Tony Abbott and President Xi Jinping - will stimulate new opportunities," said Weatherill, while speaking at the South Australia-Qingdao Investment and Trade Promotion Seminar on Wednesday. He said South Australian businesses must take advantage of the massive opportunities in China or risk being left behind.

"We hope to expand cooperation with Qingdao in many sectors like premium food and wine, services, mining, agribusiness and infrastructure," said Weatherill.

In mining and energy, the state has nearly 70 percent of Australia's known copper resources, 80 percent of its uranium and almost 30 percent of its gold. "There are several investment opportunities in South Australia, especially to invest to develop graphite, kaolin, manganese, nickel, tin, silver, lead and zinc," said Weatherill.

Qingdao Cheers Wines Co recently acquired a stake in a large winery near Adelaide, the capital of South Australia, and acquired one of its brands. The company now imports wine from Australia to China.

In yet another sign of growing cooperation, the two sides also set up an Australia-China cross-border merchandise display (logistics) center in the Qingdao bonded zone.

Craig Katz, founder of Purus Group, an international trading business from South Australia, said his company is supplying products like Coopers beer, Bickfords soft drinks, Nippys juices, Beerenberg jams, Lucky Kangaroo wine and Kangaroo Paw olive oil, to the center.

"The channel will make it easier for us to launch high-end products for the middle-class Chinese customers. For the customers, safety is of paramount importance, but they are also driven by the desire to explore and experience new things," Katz said.

"More importantly, the channel will help introduce our products to Chinese customers in the lead up to the free trade agreement taking effect, following which they will see further product price reductions," Katz said.

AQUAessence, a renowned producer of premium quality bottled water from South Australia, is looking to partner with a Chinese firm that has access to overseas distribution. "We are offering up to 49 percent ownership of the business," said Tony Gasparini, the company's managing director.