It’s a relationship that has established China as Australia’s largest customer – they now buy 80 per cent of our wool clip.
The successful wool trade between Australia and China now sees Australia export 271 million kilograms of the natural fibre to China, a sharp rise from pre-1980 when this figure stood at less than 10 million kilograms.
This year we are seeing a rise in the wool market that producers haven’t experienced in over two decades, so it is fitting that The Woolmark Company and Australian Wool Innovation’s (AWI) marketing team is celebrating more than half a century of a cross-cultural partnership between Australia and China.
Once predominately a manufacturing hub, China in recent years has fast become a large consumer of luxury apparel.
The Chinese textile and apparel market is worth $2.76 billion as part of China’s transformation into a global powerhouse following its decision to open up to the international economy.
With 1.4 billion people driving a new consumer culture and an economy growing at more than seven per cent per year, today it seems the only constant in China is change, but what endures is the country’s vast appetite and passion for Australian Merino wool and its committed relationship with Australian woolgrowers.
To mark the celebration, a commemorative book sharing personal stories from industry stalwarts and those shaping its future has been produced. It has a number of profile pieces with the movers and shakers of this industry over the last 50 years.
One of those industry stalwarts featured in the book is John Roberts, General Manager, Eastern Hemisphere, The Woolmark Company.
Mr Roberts has had a long affiliation with the Chinese wool market being based in Shanghai for a number of years as trade manager for Elders wool. But his experience with the wool industry spans nearly 30 years.
He said the Chinese consumer is now a serious player in the global market.
“They are very discerning, there is no longer this blind faith to a high-end brand, it’s more than that,” Mr Roberts said.
“The consumer in China now is a label turner. They actually want to know where it is from and is it natural. So all those stories that wool tells is becoming really attractive to the middle income Chinese consumer.
“They take a real interest in the whole providence story and where something is from.”
Mr Roberts, who had been dealing with the Australia/China wool trade since 1995, said he always thought China would become a major user of wool.
“China has a wonderful textile industry using luxury fibres, so I think it was always in their DNA to use a beautiful fibre like wool,” he said.
“I guess I was originally a bit concerned about their ability to process it as well as the Italians and who would caress it through the supply chain as they took a very industrial approach.
“But then came the time when they really transitioned from being just an industrial user of wool to a really discerning, high quality manufacturer of wool.
“China has a wonderful textile industry using luxury fibres, so I think it was always in their DNA to use a beautiful fibre like wool
“At one point they took over Italy as the biggest buyer of wool finer than 19.5 micron.
“I think that is when everyone started to take China seriously.”
“This is when they stood on their own two feet and people started to realise that his is not just about cheap labour and cheap conversion costs, it’s about a high quality market that is producing high quality goods.”
Mr Roberts said the Chinese have done a lot for the industry from a working capital perspective, with about 90pc of the buyers of wool in China all pay on a letter of credit before shipment.
“When China first started to dominate there was a lot of criticism from Europe, but China would pay before we had even shipped the wool,” he said.
“From a working capital perspective, if your a exporter or a trader, it’s fantastic business.
“A lot of people thought all our eggs were in one basket – that we were too dependant – but in reality they have done a hell of a lot for exporters’ working capital. It allows them to have more money when they are in the auction room.”
He said the the special thing about the relationship with the Chinese is once you have formed a friendship there it really means something.
“It’s a lot more than a signed contract,” Mr Roberts said.
“Trust is an amazing thing over there and it’s not something you buy, you try and earn it.”
In May delegation of Chinese media, industry and influencers visited Australia, to not only experience the origin of wool, but also celebrate the bond between the two countries.
"China continues to remain the single most important buyer of Australian wool," AWI CEO Stuart McCullough said.
"I first started travelling to China as a wool trader in the late-1980s and was convinced from an early stage that the Australian wool industry was going to significantly benefit from the processing capacity of China.
“What evolved across the next 30 years exceeded any expectation I had in those early days.
"The domestic consumption of our fibre is now being driven by the emergence of great affluence in China, which will continue to grow.
“Not only have we the perfect processing partner on our doorstep but we also have the perfect consumption partner."
With increased affluence and a tendency towards leading healthier lifestyles, discerning Chinese consumers are now favouring natural, long-lasting garments.
As a premium and luxurious natural fibre, Australian Merino wool is therefore one of the most coveted fibres in high fashion in China.