Australia: Will the Asian Century be the Rebirth or Death of Australian Manufacturing?


(Chinese Proverb)

Australian manufacturing can survive and prosper in the Asian century but it won't be selling cars and washing machines to Asia's growing middle class. The real opportunities are less obvious and require cracking levels of innovation. Are our manufacturers up to the task?

In a press conference on 20 November 2012 in Phnom Penh, the Prime Minister called attention to Asia's rising middle class and the opportunities it presents, saying:-

"this region of the world will move from not only being the biggest productive region of the world but to the region of the world doing the most consumption; people buying things and services that they want and those middle class consumers in Asia will want the same kinds of things that Australians want for themselves."

Much has been made of Asia's escalating wealth and what this might offer Australia's manufacturing sector. According to the Prime Minister, Asia's middle class want to buy the same goods and services that Australian's want for themselves.

A look around an Australian home reveals Australians want LED and plasma TVs, computers and laptops, microwaves and ovens, refrigerators, washing machines, mobile phones, iPods, iPads, motorbikes and motor vehicles.

None of these products are produced in Australia except motor vehicles, which ironically would also have disappeared from our factories had it not been for successive government bail outs.

What Australians' want are products that are produced overseas and predominantly in Asia. No doubt Asia's middle class also want TVs, washing machines, cars and iPads and this will be a boost to those industries supplying those products – in Asia.

To be fair to the Prime Minister, she went on to say:-

".., so where are these job opportunities for us? Well clearly in agriculture, clearly in food processing, in tourism, in customised manufacturing, in high-end manufacturing, in manufacturing which comes with an imbedded services component, in our services industries, financial services, legal services, a continuation of international education, health services."

It's unclear what the Prime Minister had in mind by what she called customised and high-end manufactured products, and products with imbedded services components. What are these products? Can they be supplied by Australian manufacturers of a quality and at a price that is competitive?

While the likelihood of Australia producing goods for Asia's middle class seems remote, there is a global phenomenon emerging that could support Australian manufacturing into the future.

It's the move away from manufacturing products, end-to-end, in a single factory in one country in favour of "unbundling" manufacturing processes across borders.

Components are increasingly produced in whichever country is most competitive in making each 'bit'. The various components are then shipped to a third country to be assembled into the end product, which is then sold world-wide.

The benefit of "unbundling" is that each stage of the manufacturing process, including final assembly, is conducted in the country that has (theoretically) the comparative advantage for its particular part in the process.

An example of this is the production of the Boeing 787 Dreamliner aircraft. Major components and subsystems of the aircraft are produced in the USA, Japan, the United Kingdom, Korea, Italy, Canada and Sweden by a number of different companies, often in the same country. In Japan, Kawasaki has produced the fixed trailing edge for the wings, while Mitsubishi produced the wing itself.

Australia is participating in this global supply chain. Boeing Australia produces the movable trailing edge for the wings of the Dreamliner. The contract to produce this component is reportedly worth AU$4 billion over 20 years. The parts include new materials developed in collaboration with the Cooperative Research Centre for Advanced Composite Structures, the Australian Advanced Manufacturing Research Centre at Swinburne University and the CSIRO

Similarly, the double-deck, eight car Waratah passenger train being built for the NSW Government by Downer EDI Rail draws on sub-systems and components from around the world, including Germany, Finland, Japan and Australia, with initial assembly of each train being undertaken in China. The final stages of manufacture are performed at Downer EDI Rail's facility at Cardiff, NSW, with the installation, amongst other things, of the train's operating systems.

Countries in Asia, including China, are expanding their manufacturing capabilities beyond consumer products. China is manufacturing motor vehicles, passenger trains, including Maglev passenger trains, and aircraft. Delivery of the first passenger jet, the COMAC, is scheduled for 2014.

This expansion of manufacturing capabilities in Asia coupled with the "unbundling" of manufacturing processes globally offers Australian manufacturers the opportunity to become part of global supply chains by supplying technologically advanced, high value products into those supply chains.

Looking ahead, the opportunity for Australian manufacturing in the Asian century is not about supplying consumer products to Asia's middle class. The real opportunities are off the pages of catalogues. The opportunities for this country demand innovation, leadership and a global outlook, for which Australians are renowned. The government must continue to support R&D expenditure and trade laws that recognise the important role Australia can play in global supply chains.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.