North Korean soldiers march during a military parade in Pyongyang.
FOR a fleeting moment last month it appeared that Port Adelaide’s historic first game in China may be abandoned before the ball was bounced.
The reason? Two leaders with equally weird hairstyles on opposite sides on the globe were adding to unrest — one mostly via Twitter — that the world was on the brink.
Welcome to geopolitics as we now know it.
As North Korean leader Kim Jong-un talks tough around another nuclear test, further raising the ire of an already angry US president Donald Trump, South Australian companies with an interest in Asia are being urged to put contingency plans in place.
Nathan Gray, managing partner of Adelaide-based advisory firm AsiaAustralis, says North Korea is just one of the risks confronting Australian business.
Potential conflict flashpoints over the South China Sea are much more complicated than between the US and China, according to Dr Gray.
He cites issues around sovereignty and ownership of islands, sandbars, atolls and the natural resources surrounding those islands.
“There are also debates over who owns inhabited and uninhabited islands between China and Japan, and China and South Korea,” Dr Gray says.
He says that if warfare breaks out in East Asia, it would have an immediate and potentially catastrophic impact on the Australian economy.
RISKS: Asian expert Dr Nathan Gray is encouraging South Australian companies operating in Asia to have contingency plans in place. Picture: Matt Loxton.
“Everyone has something to lose — China, US, South Korea, and Japan all have much to lose from warfare in the region — but watch this space because the rise in nationalism can be more important to political leaders than export figures,” he says.
“This rising nationalism has the potential to cause real and tangible negative impacts on Australian businesses throughout Asia.
“Examples of these impacts include the rise of non-tariff barriers which raise the cost of doing business in a particular market through increased and changed regulations.
“China is one market that is undergoing regulatory reform, and what once was legal or allowable business practices, are now no longer the case.”
Dr Gray says it’s imperative that businesses looking to Asia assess all of the risks that may be confronted in short and long term.
“Market conditions constantly evolve, and it’s important to forecast potential changes ahead of their implementation,” he says.
Austrade advises companies to keep their risk management analysis clear and simple, and ensure it is understood by everyone in the company who is involved in exporting.