Australian Prime Minister Tony Abbott shakes hand with President Xi Jinping during the signing of a free trade agreement in Canberra in June. (Photo : www.wiley.com.au)
China and Australia are seen to gain benefits as the historic free trade agreement (FTA) between the countries officially entered into force on Sunday, Dec. 20, giving competitive advantages for exporters and investors from both ends, the Xinhua News Agency reported.
Australian Minister for Trade and Investment Andrew Robb hailed the China-Australia Free Trade Agreement (ChAFTA) as "historic" and "landmark," which he said will enable more than 86 percent of Australia's goods exports to China duty-free, worth more than 90 billion AU dollars ($65 billion).
Based on the agreement, at least 96 percent of Australian goods will enter China duty-free, while 100 percent of Chinese exports to Australia will enjoy zero-tariff treatment once the agreement is fully implemented.
"The signing of the ChAFTA will provide a better platform and an improved institutional guarantee for the two countries to complement each other with advantages and conduct close win-win cooperation," President Xi Jinping said in a message to then Australian Prime Minister Tony Abbott when the deal was signed in Canberra in June.
Chinese Commerce Minister Gao Hucheng said during the signing ceremony that the ChAFTA has "monumental significance" in bilateral relations and will "boost economic cooperation and provide strong impetus to the economic growth of the two countries."
Gao noted that among all other agreements entered by China, the ChAFTA contains "the highest level of overall trade and investment liberalization."
According to the report, China exports clothing, telecom equipment and parts, computers, furniture, toys and sporting goods to Australia, while the country's top five imports from Australia include iron ores and concentrates, copper, coal, gold and education-related travel services.
Chinese enterprises and consumers will have greater access to natural resources and finished products, while Australians will also benefit from cheaper garments and electronic gadgets manufactured in China.
Robb said the Australian government has reduced tariffs on Australian exports that include dairy, beef, lamb, wine, seafood, fruit and vegetables, processed foods, vitamins and health products. They have also eliminated the tariffs on coking coal (with exports worth $4.8 billion in 2014-15), while the phased elimination of tariffs on non-coking coal started on Dec 3.
"This historic agreement with our biggest trading partner will support future economic growth, job creation and higher living standards through increased goods and services trade, and investment," Robb said. "China, with its population of 1.3 billion people and rapidly rising middle class, presents enormous opportunities for Australian businesses well into the future."
"The government's determination to see ChAFTA's commencement before the end of this year will quickly produce a double benefit for our exporters, with another round of tariff cuts to follow on Jan. 1, 2016. This will significantly enhance our competitive position in the Chinese market," the minister added.
The trade minister said the ChAFTA also opened up a range of new opportunities for Australian service providers as they gained more and better market access for financial services companies, law firms, professional services suppliers, education services exporters, as well as health, aged care, hospitality, construction and manufacturing businesses.
Minister for Tourism and International Education Richard Colbeck said in a statement that the ChAFTA is a boost for tourism.
"Not only will ChAFTA strengthen Australia's inbound tourism industry but it will also create new opportunities for Australian tourism providers in China," Colbeck said.
According to Colbeck, some 927,700 Chinese nationals visited Australia in 2014-15, and spent almost AU$7 billion ($5 billion), more than any tourists from other countries. Tourism Research Australia predicted that by 2022-23, an estimated 1.5 million Chinese will visit Australia annually and spend over AU$10 billion ($7.2 billion).
Under the agreement, the Chinese Ministry of Education will promote 77 Australian private higher education institutions for students who want to study in Australia, which is expected to stimulate new levels of growth in the two-way investment, currently worth around AU$121 billion ($87 billion).
"ChAFTA will also help drive innovation as Australian businesses, big and small, increasingly exploit e-commerce and other emerging technologies to connect with Chinese consumers," Robb said. "For example, earlier this year, vitamin supplements manufacturer Blackmores and meat exporter Sanger Australia each signed agreements with JD.com to sell their products on China's largest online shopping website."
