Report points to benefits of diversity

A new report from Bankwest Curtin Economics Centre touts diversification of export products and trade relationships as a key part of ensuring the state’s continued economic success.

Growing South-East Asia could represent the next big export opportunity, while sectors like agriculture will benefit from the new China-Australia free trade agreement, the report said.

It highlighted that although Western Australia represents more than half of national exports, around 75 per cent of that was from the mining industry.

Bankwest Curtin Economics Centre director Alan Duncan said that although China was important to WA’s economic fortunes, it was by no means the state’s only destination, at a little more than half of the market.

“China will remain a strong market for WA’s primary resources, as will Japan, as one of our traditional trading partners,” Professor Duncan said.

It follows recent woes on the major Chinese bourse, the Shanghai Stock Exchange, which has come off more than 40 per cent since its June peak.

That has lead to speculation of a hard landing that could have a major impact on WA commodity exports.

“However, WA is extremely well positioned to capitalise on new trading opportunities beyond China and Japan, both in terms of the scale and composition of its trade with Asian partners.”

“The state’s trade and economic development strategies should certainly include a ‘focus on quality’ to capitalise on opportunities to sell to new markets for hi-tech or high-end products,” Professor Duncan said.

Such non-resources sectors have recently fallen victim to the strong currency, however.

“High exchange rates have certainly affected the competitiveness of WA manufacturing, agriculture, education and tourism, although recent falls in the Australian dollar may alleviate the currency pressures for the state’s businesses,” Professor Duncan said.

“There is a clear need for new investment in the state’s manufacturing industry so that the sector can continue to compete effectively and grow its international market share.”