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Auditing Australian Construction Industry’s Dependency on China to Improve Construction Supply Chain Resilience

In: Proceedings of the 26th International Symposium on Advancement of Construction Management and Real Estate

Author

Listed:
  • Jinyun Liu

    (University of Melbourne)

  • Toong Khuan Chan

    (University of Melbourne)

  • Guilherme Luz Tortorella

    (University of Melbourne)

Abstract

Along with the global economic growth and the prevalence of global trade, uncertain and turbulent markets can lead to construction supply chain vulnerabilities and disruptions. The recent trade tensions have focused attention on Australia’s increased dependency on a wide range of essential products from China ranging from components for its mining and metal producing industries, to medical equipment and pharmaceutical goods. Since China’s accession to the World Trade Organization in 2001, its success at manufacturing has resulted in the decline of manufacturing capacity in many advanced economies including Australia. Over the last decade, Australia has increased its imports of construction materials and products from China especially for aluminum windows, glass, curtain walls, flooring, tiling and joineries. The aim of this audit is to identify all construction materials and products imported into Australia and assess its dependency on China. A measure of dependency is defined based on the proportion of imported products supplied by China, net import of the commodity into Australia, and China’s global market share of these products. The import audit was carried out on the United Nations Comtrade database at the 2-digit and 4-digit Harmonized System of goods and services. The audit indicates that the Australian construction industry is strategically dependent on China for numerous construction materials and products. The main goods that the Australian construction industry exhibits a strategic dependency on China are ceramic products, glass and glassware, and furniture. Adopting the Herfindahl-Hirschman measure of concentration, the import concentration was observed to be significantly higher than the export concentration globally indicating that the Australian construction sector has exhibited a significant preference for products from China over its competitors. The research will improve the resilience of the supply of construction materials into Australia and contribute to supply chain resilience theory.

Suggested Citation

  • Jinyun Liu & Toong Khuan Chan & Guilherme Luz Tortorella, 2022. "Auditing Australian Construction Industry’s Dependency on China to Improve Construction Supply Chain Resilience," Lecture Notes in Operations Research, in: Hongling Guo & Dongping Fang & Weisheng Lu & Yi Peng (ed.), Proceedings of the 26th International Symposium on Advancement of Construction Management and Real Estate, pages 1512-1523, Springer.
    • Handle: RePEc:spr:lnopch:978-981-19-5256-2_116
    DOI: 10.1007/978-981-19-5256-2_116
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