How to navigate the uncertain future of the Australia-China trade relationship

In last week’s poll, we asked for your views on the sentiment of Australia and China’s bilateral trade relationship in the next 5 years.

The question was prompted because decision-makers are increasingly worried about the direction in which Australia’s trade relationship with China is heading. It’s an important question to ask ourselves, because as in the words of former foreign minister Gareth Evans “Australia’s future is going to be determined far more by our geography than our history.” So whether you run a business, a university or shape Australia’s public policy, the direction of our trade relationship with China will be a key to Australia’s future.

“Australia’s future is going to be determined far more by our geography than our history.”

So, what was the result of the poll – what are your views on how the Australia-China trade relationship will fare in the next 5 years?

As you can see below, there is a pretty even split with 42% of the respondents seeing the trade relationship improving, while 54% see it deteriorating. The remaining 4% believes that the sentiment of the trade relationship will remain the same over the next 5 years. 

The question we should ask ourselves is what do you do with this information?

As a leader tasked with setting your organisation’s strategy for the future, you are often presented with uncertain trends, yet these trends are highly impactful; whether they go up or down, left or right, or in this instance good or bad. This means you will have to formulate a response to it – how are your strategic plans dealing with this highly impactful uncertainty?

How are your strategic plans dealing with this highly impactful uncertainty?

We often see this when helping organisations with their strategic planning – the members of the leadership team will have a diversity of perspectives on the future. Oftentimes, it makes it hard to move forward – how do we deal with these divergent views in our strategic plans? And more importantly, how do we build a strategy around this that we’re all confident about and is actionable?

An important bilateral trade relationship is but one example of an impactful uncertainty. Organisations often face multiple kinds of ‘key uncertainties’, whether they are about trade relationships, technology, politics, climatic impacts or social developments – all are often uncertain, yet highly impactful.

We all know that no one can accurately predict the future. However, as scenario planners we can explore a range of relevant and plausible futures of an organisation’s operating environment. Doing so will allow you to create structure in uncertainty.

...As scenario planners we can explore a range of relevant and plausible futures of an organisation’s operating environment. Doing so will allow you to create structure in uncertainty.

By creating structure in uncertainty, it not only gets you ‘unstuck’; it gets you and your team more focussed, thereby significantly raising the productivity of your strategic planning process.

If you’d like to find out more on how we do this – please visit our website at sjsstrategy.com.au

Last week’s question was raised by our work with clients in the agricultural sector. Next week, we’ll look at another topic that is keeping Australian agribusinesses on their toes: the spectacular rise of lab-grown meat. What will that mean for the way that we produce and consume our food in Australia?

We look forward to exploring this with you next week.