Free Trade Agreement Between Australia and China Essay

3586 Words Feb 24th, 2016 15 Pages
Executive Summary

Traditionally, Australia-China trade & economy was simple. Australia met the demand for raw material for China’s manufacturing & China exporting back to Australia its finished manufactured goods. Thus China-Australia became each other’s largest trading partners.

Now that China’s economy is affected, less spending on infrastructure the demand has shifted from raw materials & commodities to other specialized manufactured equipment, services like health, education, financial, engineering, agriculture etc. for which Australia has to change gears to gain distinctive advantage to its other competitors. However in Chinese economy there still exists substantial market for Australian commodities, such as wool, wines, wheat,
…show more content…
As a trading nation, trade and investment with China is vital to Australia’s economy.

Past few decades has seen China’s huge growth in manufacturing and Infrastructure, thus creating large demand for building material, energy for electricity and transport and the raw material for its manufacturing industry. Australia was ideal & well placed to cater to this demand; further, it was a ready market for China for the finished manufactured goods. Thus China-Australia became each other’s largest trading partners.

Now, with less spending on infrastructure, the demand has shifted from raw materials & commodities to other specialized manufactured equipment, services for which Australia shall not have distinctive advantage to its other competitors. However, with growth in Chinese economy there exists substantial market for Australian commodities, such as wool, wheat, minerals & iron ore, as Australia has advantage of nearness by sea for the shipping lines.
Australia also enjoys catering to the needs of Chinese for sophisticated medical goods & services in Health, Social Security, Human Resources, Banking, Education and Agriculture.

China’s economic woes & slowdown in addition to general economic slump has impacted Australia hard, specially the mining cum trading houses. This impact is not limited to just Australia but whole of Asia-Pacific, Latin America & Canada.

International

Related Documents