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China and Australia Say, 'G'Day FTA'

Editor: Zhang Dan 丨CCTV.com

06-18-2015 17:16 BJT

By Tom McGregor, freelancer based in Beijing

China and Australia have signed a bilateral free trade agreement (FTA ) on Wednesday in Canberra. The deal would immediately eliminate 85.4 percent of tariffs on goods and services traded between both sides. Later on, 97 percent of all Australian exports to China will be tariff-free through a step-by-step process, which would include agricultural products such as beef, dairy and wine. Meanwhile all Chinese exports will eventually go free of tariffs.

According to Ecns.cn, the official English-language website of China News Service (CNS), China-Australia total trade has jumped from $US88.1 billion in 2010 to $US136.9 billion in 2014. Australia amassed a $US9.4 billion trade surplus. One-third of all Australian exports go to China. As the new free trade agreement goes into effect, Beijing and Canberra have simplified review procedures for investments and offering easier market access to the service sector. Australian mining corporations are expected to benefit big-time.

Aussie miners get cheaper Chinese machinery

The mining industry serves as the main driver of the Australian economy. While young people in the Asia-Pacific region study hard to pursue white-collar careers, the Australian youth dream of working in blue-collar jobs for its premium wages. Accordingly, the trade deal can create greater prosperity for miners, and Chinese excavation equipment companies could see a surge of more exports to Australia.

Four of the top five Australian exports to China are mining-related, such as iron ores & concentrates - $US44.3 billion; coal - $US7.2 billion; gold - $US6.3 billion and copper - $US1.63 billion. The richest Australian mining companies are BHP Billiton, Rio Tinto and Fortescue Metals. Australian miners have relied more on Chinese-made mining equipment. Rio Tinto CEO Sam Walsh told Mining.com in 2013 that his company increased its purchases of equipment from China praising its “higher-quality.”

Business travel & tourism to liftoff with more flights

The China-Australia FTA would likely spark a business boom with rising air passenger traffic flow between the two nations. Australian companies would seek to invest more in China, which would encourage more business travel abroad. The AustralianForum Website recently reported that Jetstar Airways will offer new direct flights from Wuhan, China to the Queensland’s Gold Coast starting this September.

Yet, business travel may play just a small role for Australia’s travel industry. As more Chinese are becoming affluent, Australia is attracting millions of Chinese families to visit the ‘Land Down Under’ to visit its beautiful beaches, scenic spots and idyllic cities. The Gold Coast appears to be the most popular destination, accounting for 60% of all Chinese tourists flocking to Australia in 2014.

“For the next two years, the Wuhan-Gold coast flight service has the potential to generate $US53 million in visitor expenditures to the local economy,” Queensland Premier Annastacia Pataszcuk told AustralianForum.

Giving cheers to Australian wine

The Chinese have shown a stronger fondness for Australian wine in recent years as more tourists, business travelers and students return home from their adventures in the kangaroo kingdom. They have discovered the joys of the country’s wine and are boosting exports for Australian wineries through word of mouth campaigns in China.

Accordingly, the biggest annual activity for ‘Wine Australia,’ a promoter, is its China Roadshow held every May. This year, ‘Wine Australia’ toured Xi’an, Dalian, Nanjing and Guangzhou exhibiting 300 wines from more than 20 regions, as reported by The Shout Website.

“The Roadshow brings Australian wineries together with decision-makers in the Chinese Trade so that we can create more opportunities for Australian wines and open more local markets in China,” said ‘Wine Australia’ general manager Will Yang.

China and Australia to bask in sunlight of FTA

China continues to rise to prominence by signing a number of bilateral free trade agreements with other nations. Two weeks ago, Beijing scored an FTA with South Korea and now Canberra has jumped on board. Australia may likely be the bigger winner, since the nation already enjoys a trade surplus with China. Nonetheless, China can benefit as well with cheaper imported goods and a more lucrative market for exporting its heavy-duty machinery & equipment to Australian mining giants. Hence, the sun appears to be shining brightly on free trade for both countries.

 

(The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 

Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

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