China and Australia signed a long-awaited free-trade agreement (FTA) on 17 June after a decade of negotiations, lifting most tariffs in both countries.
In terms of cargo trading, 85.4% of China and Australia’s exports will be tariff-free as soon as the agreement takes effects.
Upon full implementation of the wide-ranging agreement, 95% of Australian exports will be tariff-free, there will be fewer hurdles for Chinese businesses investing in Australia, and more visas will be granted for Chinese tourist.
Australia is the second-largest destination, after Hong Kong, for China’s overseas investment, according to a Chinese government statement. “It is expected the free-trade deal will facilitate the flow of capital, resources, and people, and benefit industries and consumers in both countries,” it said.
Australians will benefit from cheaper electronics and white goods, and their spending on these items is expected to boost the economy, Xu Yating, IHS economist told IHS Maritime. Chinese consumers, meanwhile, should have great access to Australian goods such as beef, dairy products, wine, and boutique whisky, which will be much more affordable once the tariffs are lifted, she added.
As Australia’s largest trading partner, China’s trade of goods and services with Australia has exceeded USD135 billion in 2014, almost a quarter of Australia’s total international trade.