Australian businesses will have unprecedented access to the world`s second-largest economy. It significantly strengthens our competitive position in key areas such as agriculture, resources and energy, manufacturing exports, services and investment. ChAFTA offers considerable benefits for Australia`s energy resources and exports. Once effective, 93% of Australia`s current resource, energy and industrial exports will enter China duty-free and reach 99.9% if fully implemented. It is important that the recently introduced 3% coal coking tariff is immediately abolished and that the 6% tariff for thermal coal expires within two years. Despite the gradual economic slowdown, an exceptional rise in China`s middle class – which is expected to grow by 400 million people by 2022 – will continue to foster healthy growth in private consumption and boost Chinese demand for Australian exports. ChAFTA offers Australia significant preferential market access, with more than 85% of Australian exports to China (by value in 2013), which are now duty-free after entry into force and increase to 93% after four years and 95% after the full implementation of ChAFTA. With ChAFTA, China offered Australia its best service obligations to date in a free trade agreement (with the exception of China`s agreements with Hong Kong and Macau). According to the Australian Department of Foreign Affairs and Trade, in 2014, China was Australia`s largest export market for goods and services, accounting for almost a third of total exports, and a growing source of foreign investment. [6] China is also the main target for Australian services exports – with around $6.9 billion in 2013, China accounted for 12% of total services exports. This has been driven by the rapid growth of travel and education exports, which have grown by an average of 17% and 12% per year over the past decade (Chart 5).

The China-Australia Free Trade Agreement (ChAFTA), announced this week, will help Australia increase exports and provide new opportunities for SME exporters by providing unprecedented access to China`s nascent agricultural and services markets. Austrade can help Australian companies become familiar with local market conditions and help develop export opportunities through a number of merchant and Australian services. China is expected to reach nearly half of a 75% increase in global food demand between 2007 and 2050. While resource restrictions will limit Australia`s ability to become an “Asian Food Bowl,” there could be a competitive position for Australia as an “Asian delicatessen.” Australian companies are already earning niche sales in high-end markets by selling the clean, green image of the “Made in Australia” label. Indeed, Australia`s agricultural exports to China have nearly tripled over the past five years to a record $8.7 billion (Figure 4). China is now our main agricultural export market. The China-Australia Free Trade Agreement (ChAFTA) entered into force on 20 December 2015. This first Free Trade Agreement (FTA) gives Australia a considerable advantage in its trade relations with China, today the world`s largest economy. . . .

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