Nt Cattle Exporters Gain Confidence From China

Decent Essays
Case Study

A suitable alternative title for the case could be: NT cattle exporters gain confidence from China.

A recent study (Department of foreign affair and trade, 2014, p.4.) shows that almost half of Australia’s exports came from minerals and fuels with 49.3% in 2013, especially iron and coal. Followed by service exports 17.3 percent and manufacturing exports 12.9 percent. In 2013, two-way trade grew by 3.7% to $647.4 billion. Comprising imports totaling $328.8 billion and exports $318.6 billion. Travel Service and petroleum made up 20.6 % of total imports in 2013. Australia’s top three imports in 2013 were personal travel excluding education services ($24.7 billion), crude petroleum ($20.2 billion) and passenger motor vehicles
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The federal government is believed to have all but signed a live export deal to sell one million Australian cattle to meet China’s growing demand for beef. In the meantime, it also brings a potential challenge of cattle production capability. NT Cattlemen Association CEO Tracey said that NT is not positioned currently to supply that amount of cattle in addition to the existing cattle NT got. In other words, NT beef industry is not able to meet the current demand of China market and need some improvements to be done.

The issue and concept addressed in the case study is trade theories such as competitive advantages and also the benefits and costs brought by international trade and its related government policies.

The theories that best attempt to explain the trade in the case study are comparative advantage theory and free trade theory. The beef deal between China and Australian can explain Competitive advantage theory. It refers to a country specialized in the production of those goods that it produces most efficiently and to buy the goods that it produce less efficiently from other countries, even if this means buying goods from other countries that it could produce more efficiently itself. The reason why China imports cattle from Australian is because Australia has competitive advantage in producing live cattle while China faces a growing gap between beef supply
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