I ignored that bit about selling to Buddhists and Muslims...

I ignored that bit about selling to Buddhists and Muslims altogether. That statement is outright false because Buddhists would probably shun products from sheep just as much as they shun products from cows and pigs, and Muslins would only shun produce from pigs - they would have nothing against using bovine derived collagen. So it's completely false to suggest that these two groups collectively would flock to sheep derived collagen - pardon the pun.

However it's also false to make the assumption that China would shun Australian products at the expense of its own interests. An Australian collagen product in a Chinese cosmetic does not make the cosmetic product Australian. It will still be Chinese. In much the same way that steel products made from Australian sourced iron oar will still be stamped "made in China". It's one ingredient in a mix of many to make a cosmetic product that will still be a Chinese product when it is marketed. This is similar to the bread mix in Costanzo's low GI Bread. It's ultimately still a Costanzo's product, proudly made in the USA. That deal eventuated into orders, sales and products. If the market forces, such as supply and demand align this China deal could work too, but I'm more inclined to rationalise on a market pool of 1.4 billion people having access to the products than on specific minority groups in China.