In an era of Brexit uncertainty and threats of US trade wars, countries are increasingly being urged to trade with China.

But for the Irish farmers keen to tap into the east, there are lessons that can be learned from Australia’s mixed fortunes.

Asia, and particularly China, has long been touted as the great hope of Australian exporters.

The argument suggests the region’s growing middle class has an insatiable appetite for Australia’s much touted “clean and green” exports.

Some have even gone as far as to describe it as untapped rivers of gold.

This promoted dairy processors to start exporting fresh milk in the back of commercial planes to Chinese markets within hours of milking.

They charged a premium, in some cases almost €9/l, and hoped China’s culture of gift-giving would extend to include fresh Australian milk.

This came as processors increasingly produced milk powders for exports, while turning a blind eye to global stockpiles that continued to grow as supply outstripped demand.

In hindsight, the dairy crisis that has now engulfed the Australian industry for almost a year could have been avoided had companies not buried their heads in the sand and gambled everything on China.

The lesson, which farmers and processors have had to learn the hard way, is that there is nothing simple about trading with the east.

Importing through the front door

The so-called ‘‘grey channels’’ were for a long-time a mainstay of Australian imports to China.

Nuts, fruits, vegetables, seafood and meat would be exported to Hong Kong and Southeast Asian countries before being taken across the border into China.

But with China cracking down on grey channels, and thereby putting the trade at risk of being immediately shut down, industries have spent years securing agreements and protocols to this trade to enter, as they call it, through the front door.

The success of this theory has been shown in horticultural exports.

Fruit and nut exports jumped 154% in the last financial year, thanks largely to a decade-long effort to gain access.

The surging demand for fruit has led to China now taking 50% of the citrus Australia produces.

While the citrus industry has been successful, other fruits such as avocados have struggled, thanks largely to a lack of market access.

So while there might be consumers wanting to buy the product, bureaucratic delays are holding back the opportunity.

But the citrus industry will be closely watching exports of wool and dairy to learn the lessons of becoming too reliant on one market.

Australia rode to wealth on the back of merino sheep.

It has boomed and busted in the years since. But today, its survival lies almost entirely in demand from China.

Australia exports more than 75% of its wool to China each year.

The reliance on one country has the industry desperately trying to secure new markets, to buffer itself, should China cut its buying. For some that seems unlikely, but China’s recent history shows snap changes in policies mean industry are always at risk of being suddenly cut out of a lucrative market.

Regulation changes

The organic infant formula manufacturer Bellamy’s had for the two years been the darling of small business listed on the Australian stock exchange.

Its share price jumped by 133% and its profit rose by 322% in the last financial year.

But in recent months, it forced out its CEO, watched its share price shrink to a third of its heights and came under threat of a shareholder revolt eager to overhaul the board.

Its problems were two-fold. Sales in China were no longer booming like they had been in recent years. The company had also fallen victim to sudden regulatory changes in China.

Bellamy’s isn’t alone. Most of Australia’s dairy companies have had to revise profit forecasts amid slower than expected sales.

China has on multiple occasions in the last year suddenly imposed import suspensions and limited the companies that could supply its markets.

The crackdowns came amid propaganda campaigns to promote local production and a desire to increase reliance on domestic dairy rather than imported products.

These regulatory changes have not just been isolated to the dairy industry.

China in recent years has made snap decisions that have thrown into chaos exports of coal, wood chips, wool and horticultural exports.

The changes have come as products were on route across the ocean to China, forcing companies to re-route their commodities to new markets.

It hasn’t all been doom and gloom, as some of the horror cases suggest.

While Australian agricultural exports have only grown by 0.5% in the last year, a gain is a gain.

China is Australia’s largest market for agricultural exports and is today worth more than €7bn.

The companies that have had the greatest success have been those that have formed joint ventures with Chinese businesses.

These joint ventures have outperformed the companies that have just sent their product from Australia hoping it would find a customer upon arrival.

Undoubtedly there are billions of euros on offer for Irish companies that find their market in China.

Experts who have lived in the country say the secret is in understanding who the customer is that an exporter is trying to reach.

They say many fail to appreciate how diverse China is.

In the northeast, it has historically been an industrial region with a strong anti-Japanese sentiment.

Head further south and you’ll find a more temperate climate, with people with different social and cultural priorities than people in the north.

Head completely south and into the former Canton region and people here have a greater connection to the outside world. They feel less connected to Beijing than people to their north. This is just the tip of the iceberg, and showcases that what each of these consumers wants will vary.

There is no such thing as one Chinese customer, and success lies in companies finding their niche and client base within the country’s 1.3 billion people.

One thing everyone agrees on is getting access to the country is not just opening the door.

Stepping in and seizing the opportunity is a much more difficult and challenging prospect than many suggest it to be.

Brett Worthington is the national rural news editor with the Australian Broadcasting Corporation, specialising in agribusiness, politics and global trade.