Australia and China share a unique trading relationship which is rapidly growing and improving each country’s economy. The possibility of strengthening and improving this existing relationship is a major priority for both countries. Both governments are committed to sustaining and increasing the trade and investment flows that have been achieved in the past two decades. In 2013, the total trade between the two nations was $150.9 billion (AUD$) making China the biggest export partner of Australia and a vital part to the Australian economy.
Australia’s main export to China is Iron Ore equaling to 57% of total exports in 2011 with a worth of $43,960 million (AUD$). Australia also is a service exporter to China with education-related travel services equaling to 5.3%. In 2012 over one million trips were made between Australia and China with 624,500 Chinese visitors to Australia and 380,000 Australians travelling to China. The Australian tourism market is highly dependent upon Chinese tourist as they contribute significantly to the economies and tourism industry performance.
On the 18th of April 2005, Australia and China agreed to commence negotiations on a Free Trade Agreement after a feasibility study found that there would be significant economic benefits for both Australia and China. The negotiations are continuing but are complex and cover a large array of trade issues including: agricultural tariffs, quotas, manufactured goods, services, temporary entry of people and foreign investment. The associated benefits and interests of the potential agreement include the removal/reduction of tariff and non-tariff barriers which would significantly reduce transaction costs, removal of regulatory barriers to improve trade flows across goods and services and to implement measures to encourage more foreign investment between the two countries enhancing the future economic relationship.
Elle T. // Editor SMC