Since the China-Australia Free Trade Agreement was signed 15 months ago, benefits have begun to flow, however much potential remains to be tapped in areas such as infrastructure and technology and multi-lateral co-operation.
Since the arrangement came into force, more than 85% of Australian goods imported into China have entered the country Duty free or at preferential rates and the percentage will continue to rise within the coming year.
Last year trade between the two countries was worth 712.38 billion yuan ($134 billion), just 0.9% more than in the previous year.
China’s outbound direct investment into Australia rose 56% to $US3.68 billion($4.76 billion), exceeding the growth of the country’s overall ODI-outward direct investment
The investment flowed into sectors including real estate, leasing and commercial services.
While these has been increased economic integration between the two countries there are some areas that need improvement.
“With its expertise China could help Australia upgrade outdated infrastructure, while China could learn from Australia’s advanced technologies in transport, telemedicine and distance education,” said Han Feng, a researcher at the National Institute of International Strategy in the Chinese Academy of Social Sciences.
“The two countries also share broad common interests in multilateral regional economic mechanisms such as the Regional Comprehensive Economic Partnerships and can help each other in their own domestic projects such as China’s Belt and Road Initiative and Australia’s strategy to develop its North,” said Su Hao, a professor of Asia-Pacific Studies at China Foreign Affairs University in Beijing.
However, on home soil, Australian producers are frustrated that many non-tariff barriers still block exports to the Asian powerhouse.’
While Chinese consumers are already paying up to $200 per kilogram for Australian wagyu steak and $10 per litre for fresh milk, other food commodities are yet to see such gains.
Queensland vegetable grower, packer and processor Kalfresh plans to sell carrots to China, but is locked in a bureaucratic vortex of biosecurity protocols.
“It doesn’t matter how much work people at a bureaucratic level do,” Kalfresh chief executive Richard Gorman said.
“Nothing is going to happen until the people who run our country say ‘we think it’s really important for us to sell food to China’,” he said.
Overall, the China-Australia Free Trade Agreement (CHAFTA) has already seen increased trade and integration between the Chinese and Australian economies with a few areas missing out. With time, those areas such as some parts of agriculture will be incorporated.
Free-trade benefits flow smoothly by Mo Jingxi, China Watch