CRI听力:Australian Manufacturing Industry Targets China

The high Australian dollar and productivity slump have seen the country's manufacturing industry suffer.

In the last four years, the industry has shed over 100,000 jobs with the government predicting another 85,000 to go in the next five years.

Manufacturing contributes 8 percent to the GDP and makes up 29 per cent of Australia's export base, so when the industry hurts so does the economy.

Mark Dreyfus, the Parliamentary Secretary for the Department for Industry and Innovation says it's China which offers real food for thought.

"We are very conscious of the exploding middle class in China and the rising demand throughout Asia. Australia has recognized that we need to keep on investing in quality, consistency and innovations, so it's really building on those industries that use the highly-skilled workforce that we've got."

But this is easier said than done.

Peter Burn is the Director of Public Policy at the Australian Industry Group who co-wrote the report.

He says that in order to capitalize on the increasing demand coming from China's burgeoning middle class, it is vital for Australia to truly understand what the market wants.

"If we can tune into the growth in incomes in China and in other parts of Asia and if we can get to know better the direction of Asian development and Asian tastes then we can tap into it. At the moment though we probably aren't in Australia tapped into it as much as we should be or as thoroughly as we should be. Specific company's may be doing some great work and have some niche markets and opportunities that they are exploring, but we really need to spread that experience and across the broader manufacturing sector."

Australia's manufacturing industry is not big enough to compete with large European countries and the USA in exporting large manufactured goods, such as BMW cars and Boeing aircrafts, to China.

But Mark Dreyfus says Australia's competitive advantage lies in designing and building highly technical components that go into these larger goods that end up in the emerging power.

"It's to work with industry to identify global supply networks; it's to identify how Australian manufacturers can make parts, not necessarily the whole of the finished product often very highly technological or specialized parts that can go into other products. Government is giving funding and specialist advice to help them identify what opportunities there are going to be in China and we are going to cultivate strong links with China and the rest of the region through diplomatic channels and business channels and through government to government work.

The Australian government will provide an official response on how far it will go to implement the report's recommendations at the end of this year.

For CRI, this is Alexandra Blucher.